GRM has been managing the European Commission (EC) funded Smallholder Irrigation Project (SHIP) in Swaziland’s sugar belt, in the eastern low veldt area of the country, since 2009. The project helps develop land for irrigation and then assists smallholders, who pool their land, to become effective farming companies. This collective approach is transforming the way farmers operate in this part of the country. The pooling of land ensures an effective farm size and appropriate technology, thus establishing a viable business that a myriad of smallholders would not be able to achieve. SHIP’s critical role is guiding the business development process through training and continual mentoring. The initiative has been so successful that an extension was signed in late 2012 to continue the project until November of 2013. This extension empahsises the success of the EC's funding in Swaziland and the effective development delivered by the SHIP team. The Swazi sugarcane industry is fast becoming a beacon in southern Africa.
In December 2012 the SHIP project held an annual conference bringing together representatives of the farmer companies (FCs), SHIP employees, government representatives and the EU Ambassador in Swaziland Hans Duynhouwer. This unprecedented event provided a space for smallholders to articulate their vision for the future of the industry and share experiences and best practise. It also provided a clear endorsement of SHIP’s work and recognition of the continued need for development in this industry.
The event attracted one hundred FCs and the attention of the Swazi media. The Swaziland Times reported Bertram Stewart’s (Principle Secretary in the Ministry of Economic Development and Planning) words of praise for the project and its impact of the wider economy: “...these smallholder farmer companies are a model for the development of the country, not just the sugar industry”. Indeed, the EC’s commitment to supporting smallholders in the sugarcane industry in Swaziland has been instrumental in fortifying the economy against fluctuating global trade.SHIP is now a flagship project for the EC in the region and the extension will fund the continued empowerment of Swaziland's sugarcane farmers.
- SHIP consists of two elements: an irrigation unit overseeing land development and training in irrigation management; and a Business Development Unit teaching the newly formed FCs business skills that ensure their competitiveness.
- The development of smallholder sugar farms in Swaziland is unique - the land is not owned by the FCs. It is common land held in trust by the King for the people of Swaziland. Chiefs grant the right of usufruct to individuals. The members of the FC surrender their usufruct rights back to the chief, who reissues the land to the single entity, the FC.
- This is a huge move from household semi-subsistence to sharing responsibility in a limited company that is responsible for handling bank loans for crop finance and processing harvest contracts.
- Despite issues of corruption and nepotism within companies, SHIP’s commitment over the last three years is beginning to pay dividends. There are now a significant number of successful and well managed FCs.
- SHIP is part of the EU’s overall assistance to the sugar sector. The aim is “to enhance the profitability of smallholder sugar cane growers”.
- Successful FCs will now be used as mentors to encourage best practise for new companies within the sugar industry.
- Team Leader, Peter Oldham and Finance Officer, Kenneth Maziya, are taking the next step in empowering these Community Based Farmer Companies. This is to introduce the idea of raising capital through issuing shares and lessening dependence on banks (currently charging 15% interest per annum).
FEATURE EU Development PolicY
- As the world's largest donor of official development assistance, the EU has, in the last years been strongly committed to improve aid effectiveness. The adoption of an ambitious Paris Declaration on Aid Effectiveness in 2005 was due, in no small measure, to the strong input provided by the EU.