Sunday, 17 June 2007

Chapter 9: Limpopo

THE LIMPOPO PROVINCE

“On the road that leaves Pretoria on its way north to Kipling’s ‘great, grey-green, greasy Limpopo River’, to the land of baobab trees, to Zimbabwe and the enigmatic heart of central Africa, the traveler is confronted by an extraordinary scene – a vast plain, covered in thorn trees, with deep, reddish soil and only the merest hint of a mountain 100 kilometres away on the northern horizon”- “The Vanishing Landscape” from the “Reader’s Digest Guide to Southern Africa”, published by Reader’s Digest Association. South Africa (Pty) Ltd., Cape Town.

Two years ago, South Africa was shocked to learn about the spectacular citrus and semi-tropical fruit farm failures in Limpopo province.

The Zebediela Citrus Estate

From 1918 to 1926, more than 565 000 citrus trees were planted on 2 260 ha of this estate’s land. For the twenty five years before the estate was sold to the South African government in 1974, it showed a profit of millions of rands every year. After the sale, Zebediela grew to become “the diamond of agricultural projects”. It was of such great national pride that the Reader’s Digest Illustrated Guide to Southern Africa wrote in 1978 that “nearly 400 million oranges are harvested each year from the groves of Zebediela, the world’s biggest citrus estate. The output is sufficient to provide one orange for every eight people on earth.

“At the height of the season, about 15 000 cases of oranges leave Zebediela every day. The fruit comes from more than 565 000 trees irrigated by enough water to supply a city. The whole estate is highly mechanized and many of the most advanced handling techniques in world citrus production have originated from Zebediela. “The first fruit was picked in 1926 after W.H. Gilfillan and Isidore Schlesinger divided the two original farms into 1 200 plots of 2 hectares. A handsome brochure was produced at the time offering the plots at 67 pounds each, to be farmed as a profit-sharing operation.

“The scheme proved particularly attractive to retired army officers and by 1921 most plots had been sold. In 1928, a branch railway to Naboomspruit was opened to carry the ever-growing harvest on the first stage of its journey to all parts of the world. In 1974, the South African government bought the Zebediela Estate.” After the ANC government came to power in 1994, the administration of Zebediela came under the control of the newly-formed Agricultural and Rural Development Corporation (ARDC), a government parastatal whose administration eventually ruined not only Zebediela but scores of other agricultural projects in the area. Before this takeover, Zebediela’s harvest was worth R30 million a year.

It didn’t take long for the corruption, theft and maladministration to set in. By 2001, the estate was in ruins. The original 2 260 hectares planted had been reduced to 800 hectares. Because no fertilizers and pesticides were used, more than half the trees died as a result of the Department of Agriculture’s failure to grant funds for the survival of the project. Only ten per cent of yields could be marketed.

A loss of R35 million in 2001 followed a loss of R30 million in 2000. According to press reports, the estate was “beyond recovery”.(1) Hundreds of thousands of cartons of oranges and lemons were not harvested, and workers were not paid. A lemon yield worth R8 million was left to rot because there was no money to pay staff. The fruit was in any event of inferior quality because it had not been properly looked after. Many of the fleet of 50 tractors collapsed into disrepair. Hundreds of employees were then retrenched.

Managers with in some cases forty years experience were replaced with people who had no experience of farming. One new “manager” was previously a sewing instructor while another was until the previous year a student. The press was informed that not one of the new directors appointed to the Zebediela and its sister Lisbon estate could read a financial statement.(2)

The death throes of the estate peaked at the end of March 2001 when ABSA bank stopped all credit and bounced a pension cheque of R56 million. Other estates in the area met with the same fate.

The Lisbon Citrus and Mango Estate, the largest producer of mangoes in Africa, was liquidated. While there was no money for pesticides and fertilizers to save thousands of mango trees, a consultant appointed by the province to conduct a “viability study” was paid R300 000, and then told everybody what they already knew.

A typical productive citrus farm – formerly a common sight in the Limpopo province, now in decline as the land claims increase.

Lisbon Estate boasted an annual turnover of R24 million. It produced 1,2 million cartons of mangoes and 800 000 cartons of oranges annually. It was South Africa’s largest exporter of mangoes. Representatives of the Department of Agriculture did not even attend a Lisbon Estate creditors’ meeting. The telephones were cut because the estate owed Telkom R23 000.

The famous Gillemberg Citrus and Cattle Farm Project was in the same boat as the other estates. It once boasted its own cheque account with no overdraft. The annual harvest was worth R14 million. The ARDC bled this farm dry, using the estate’s profits to fund crèches and pre-schools. It sold livestock from the farm to finance ARDC personnel and electricity bills. In two years, R10,3 million of the farm’s resources was purloined by the ARDC. Since its collapse, the Minister of Land Affairs gave the 25 000 hectare estate to 724 black families. Although some offers were made for the project, the matter became bogged down in legal wrangling.

The Saringwa Citrus and Mango Estate which produced citrus worth R5 million six years ago, has died. The accumulated loss at the once “highly profitable and productive showcase project” was R17 million over a period of four years, including R5 million of the 2001 yield of which not one orange was sold due to disease. There was no money for pesticides. More than half of the 63 000 trees died due to lack of care. Thirty families lost income as a result of the collapse.

Under experienced management, the estate produced 500 000 tons of citrus of which 60% was exported. The takeover by the ARDC after the ANC government came to power saw an annual decline of 25% which ultimately ended in chaos in 2001.The Glendale, Allandale, Berlyn and Mariyeni Estates, each equipped with top grade facilities for packing citrus for local and export markets, were shut down in 2001. The Berlyn farm supported 30 000 citrus trees, while at the Glendale Estate, production came to a complete standstill.(3)

The ARDC

Blame for this agricultural mayhem must lie at the door of the now defunct Agricultural and Rural Development Corporation (ARDC) which took over the running of these estates under the new government. It was established on 1 April 1996 “to promote sustainable development” but many of its goals were unattainable. Since 1996 to 2000, more than R216 million was transferred to the ARDC. Due to poor management, most of the ARDC’s projects collapsed.(4)

In a 2000 audited report, it was revealed that eighty percent of the current R516 million budget was spent on personnel. “This led to the downscaling of veterinary inspections which negatively affected disease control. Ninety four percent of the veterinary budget of R45,7 million for the 1998/9 financial year was taken up by personnel, leaving only 5,9 percent for operational costs.”(5)

Many one-hectare plots were allocated to people but were not economically viable as they were not close to markets. Many plot owners were not interested in farming and considered their newly-acquired property “only as a form of retirement security”.(6) Of the 77 community garden projects established by the ARDC, 15 had been abandoned by the year 2000 because there was insufficient water. Inadequate feasibility studies were performed regarding the availability of water resources for these garden projects.(7) As in the case with the Venda homeland projects, schemes introduced before the new government came to power in 1994 were crippled after their takeover because of the cribbing of budgets. Where incomes had been generated from coffee, citrus, mango and banana farms, new budget cuts prevented maintenance and repairs on equipment. By the year 2000, only 20% of the tractor fleet was still running, while irrigation equipment was in a poor state. Disease spraying programs had been severely cut, and weed control was minimal.

In all, the ARDC was responsible for 285 collapsed projects which, provincial officials said, would eventually be “restructured”. An amount of R23,9 million was paid in respect of wages at ARDC sisal projects, while the income at these projects amounted to less than R1 million.(8) (The Agriculture MEC at the time of these ARDC collapses, Dr. Tshenuwani Farisani, was transferred to the Public Transport department. He was replaced by Dr. Aaron Motsoaledi)

Taxpayer funds granted for drought relief were used to pay the ARDC’s large salaries. The corporation employed more officials and workers than the total number of employees within the provincial Departments of Agriculture of Mpumalanga, the Free State and North West. A newspaper article in March 2000 said a performance audit revealed that one of ARDC’s projects established at a cost of nearly R100 million “had deteriorated into ruin”.(9)

ABSA started to bounce the corporation’s cheques, and it eventually closed down in ignominy. These estates were destroyed under the ARDC’s gross mismanagement – its personnel were incompetent and corrupt. Where was central government when all of this was happening? Was Pretoria too far away to concern itself with taxpayers’ interests? The ARDC ruined the 285 projects which have shown a loss since they were taken over by this corporation. These included coffee, citrus, mango and banana farms. Only 20% of the tractor fleets were running, while irrigation equipment deteriorated. At some projects, there was no money for diesel while at others, electricity accounts were not paid. Weed control was minimal, and other projects were vandalized. What has happened to these projects?

In his Department of Agriculture budget speech of 5 June 2003, Limpopo MEC for Agriculture Dr. Aaron Motsoaledi affirmed that the history of the “big five” estates – Zebediela, Gillemberg, Lisbon, Mutale and Mununzwu – was well known and that he acknowledged that there had been “serious management ineptitude on the side of the ARDC.” He said they had been forced to retrench ARDC management “and commence with our restructuring plans”. He claimed they had “turned the corner” at Zebediela, although the estate was under a land claim. He said the province had sought help with “strategic partners”.

He further advised that his province had distributed 26 000 ha of land within the past financial year, and that some land had been donated by the private sector. In Mopani, 225 farms had been gazetted with more than 200 farms gazetted in Levubu under land claims. He confirmed his government was working with the Land Claims Commissioner to facilitate the transfer of these farms to their new owners but in such a way that they still remain very much commercially viable because they are highly developed commercial farms. (Italics ours). He also said 171 irrigation schemes were in the process of being “rehabilitated” and he believed this process would take six years “if we are lucky”. Dr. Motsoaledi gave the impression that he has taken the bull by the horns as far as the rehabilitation and further development of agriculture in Limpopo is concerned.

He would need to do this – the destruction of some of the world’s best citrus estates has left a bitter taste in the mouths of many, especially those who were intimately involved in the development and successful running of these estates. The press supported Dr. Motsoaledi’s speech. The local newspaper AgriReview said in July 2003 that “Lisbon and other ARDC projects (are) on road to recovery”. It was essentially a report on the May budget speech. Another account said “Citrus Estates Back on Track” (10) Zebediela was “back on its feet”, it claimed. In November 2003, an agricultural magazine declared that there was “Sweet success for Zebediela handover”(11) and maintained “the Land Claim’s Commission’s return of the Zebediela Citrus Estate to the Bjatladi community involves an effective partnership between government, commercial and developing farmers, and is a good example of sustainable restitution.”

Zebediela is being run on a fifteen-year management contract by the Boyes family. John Boyes, manager of the Zebediela operating company, is quoted as being confident that next year’s citrus crop will produce a full harvest and yield 1,2 million cartons of fruit. (12) In October 2003, an Afrikaans newspaper sang the praises of the reborn estate. The paper said Zebediela was “op die wenpad”. (On a winning streak).(13)

We endeavoured to assess the true position of these estates. From what we garnered from people who were intimately involved in the management of Zebediela, the following facts became apparent. As in most things in life, all is not what it seems! Until 1980, the citrus trees at Zebediela were regularly replaced. During that period, Zebediela exported three million cartons of oranges per annum. As we mentioned, there were originally approximately 600 000 trees in production. Now, less than 200 000 trees are in production. The rest died, and were cut up for firewood.

Further, the original area under plantation was 2260 ha. Now less than 800 ha are under production. So the estate is being run at a third of its total potential. This season, 300 000 cartons were exported, exactly 10% of the estate’s original export quota. (Mr. Boyes predictions that this year’s harvest will be 800 000 and next year’s 1,2 million cartons is extravagant, say farmers in the area.) In 1980, Zebediela produced between 1 700 and 1 800 export cartons per hectare. Some private farmers today are producing up to 3 000 export cartons per hectare. Zebediela is now producing only 375 export cartons per hectare. There has been no replanting since 1987. There are today 350 permanent workers and, in season, another 600 are taken on. Before Zebediela collapsed, 1 200 permanent labourers were on the payroll, with a further 900 taken on in the season. As it is now, the government is paying the permanent workers, while before, the estate carried this cost.

These facts somewhat belie the euphoria about Zebeliela “regaining its former glory”. Observers tell us it will never attain this goal. The company managing the estate can hardly be expected to re-capitalize the plantation. If equipment breaks down, we are told that it is cannibalized from other estates which are moribund. Although the Boyes group put R28 million into the business, the production costs per annum are higher than this figure. The electrical distribution system is in a “state of collapse” according to someone who knows the estate. The inspectors don’t want to even go into the sub-stations because it is dangerous. There is no investment in the maintenance of the irrigation distribution system.

Water utilization is poor. Zebediela’s lifeline is water, and it is essential that proper irrigation be practiced. During the last five years the dams filled up twice. There is good catchment water.

Prior to 1974, the trees were watered with flood irrigation. Now drip irrigation is used. When the original 2260 ha were under production, the water lasted three years with flood irrigation. Now with less than 800 ha in production, the dams are emptied in one year. Thus, the use of water is not optimal, and in a country like South Africa, this is crucial.

The results of the claim by Mr. John Boyes that next year’s citrus crop will yield 1,2 million cartons of fruit will be awaited. Everybody in South Africa hopes Zebediela will regain its strength, but it is incumbent upon the management and the provincial government to enlighten taxpayers of the true situation at the estate and its future under non-owner management with eventual handover to land claim recipients. These recipients, the Bjatladi community, took over the Zebediela Estate on 28 September 2003. The Boyes group Henley Farm Properties will pay them R1 million a year to lease the estate. They also hold 35% of the shares of the estate’s operating company.

The crowded pattern of Limpopo province land claims (each square represents a restitution demand) shows clearly where the most highly-developed areas of the province lie.

The Lisbon Estate

Lisbon is “chugging along” according to farmers in the area. It was South Africa’s top mango exporter. At its peak, it exported 1,2 million cartons of citrus and mangoes per annum and employed 1 000 people. In 1996, the crop was destroyed by a severe hailstorm, and the crop loss amounted to R14 million. However, those managing the estate sought financial assistance because they could revive it. They wanted to take a bond on the property, but the new people in control “could not take a decision and the estate never recovered”.

After 2000, most experienced and competent workers were dismissed and a loss of R20 million was incurred. A new management company was brought in and ran the estate for a year. They were making progress when they were summarily removed and the Boyes group was brought in. This group thus picked the harvest fruit planted by Bruboer (Pty) Ltd., the first management team appointed. It is believed the Boyes group is on a one-year management contract at Lisbon. Now there is a land claim on the farm. If Lisbon is to be run by a management company on short term contracts, there will be little capitalization of the project, planting of new trees or the purchase of new equipment. This does not bode well for the long-term future of what once was South Africa’s top mango producer.

Gillemberg Estate

This is today being run by the Bruboer Group and we have learned it is progressing well. Despite the fact that Gillemberg has bigger water problems than Zebediela, and poorer soil, and is only farming on 420 ha, the new managers exported 600 000 cartons of fruit last year, double that of Zebediela which is farming on double the size of Gillemberg’s land.

Other Land Transfers

The 3000 ha farm “La Boheme” near Tzaneen was handed over to land claimants in 1996/7. It was a thriving mango and citrus farm. It is now a squatter camp. The Inyaka/Waterval/Zoeknog coffee estates were started from scratch in the old Lebowa homeland. These three projects occupied approximately 1 000 ha. More than R6 million was put into the projects at the time and the estates’ turnover was R3,2 million a year, with a profit margin of 20%.

Extensive plans were made to expand these projects as they had not reached their full potential. However, the new 1994 administration gradually crimped the budget. There was no development capital available, and eventually no money for electricity and the telephone. The efficient management structure was replaced by the new administration’s political appointees. Nothing was planted and the development plans came to a halt. Today these former coffee plantations have been invaded by squatters and their cattle. The fields were burnt out three times. Everything has been stripped – the whole pump station – its roof, the pump, the electrical cable motors: everything that could be stolen has been stolen.

Roodevaal Farm

R11 million was paid for this 3 600 ha Oerlemans brothers property which was given to the Makotopong Community at a handing over ceremony in March 2002. Thousands were at the party, according to an observer. In September 2002, the Oerlemans brothers harvested their last crop of tobacco, onions and some fruit. Since then, theft has been chronic. Equipment broke down and was not repaired. The community had no experience, say the Oerlemans, and they had no operating capital. “We offered to sell them all the implements and machinery on the farm, but they did not have money to buy them”, say the brothers. The new owners did not plant. There were no crops to harvest because the grapes and peaches were dying.

The electricity supply to the irrigation systems and the pumps was cut off, so the new owners sold one of the irrigation systems, it is believed, to pay the electricity. They say they want to bring people on to plots on the land but there is nowhere for people to live.

Bartlo Oerlemans told the local Land Claims Commissioner Mr. Mashile Mokono that the people had no operating capital, to which Mokono replied that the people must go somewhere else and find operating capital. He is reported to have repeated this statement on television.

The community complained to Oerlemans that the government promised they would carry them for the first six months, but no money appeared. For example, they received a new tractor but they had no money for diesel.

The turnover of this farm under the Oerlemans was between R2,5 to R4 million per annum, depending on the crops and the weather. They paid taxes of more than R200 000 per year. They employed 120 workers, 80 of whom are now unemployed. (The Oerlemans took forty of their workers to their new, small farm). Today there is no farming on Roodevaal. Four or five people are reputed to be there but the vast bulk of the 200 and more claimants don’t want to move to the farm because there are no prospects for them there. Where will they get the money to build a house? How will they live if there is no capital?

Bartlo Oerlemans offered to help the community with his experience and his advice. They said they wanted money, and at last count, the community was demanding R4 million from the government to replace transformers, cables and water pumps. Much of the equipment is in a state of disrepair, and the community members are arguing and fighting amongst themselves.

The Soekmekaar Farm

In May 2001, the Sowetan ran a piece entitled “Land redistribution ‘will bring success.’” (14) In this article, Limpopo MEC for Agriculture Dr. Aaron Motsoaledi’s tone was somewhat different to that reflected in the mainstream press. The good doctor said that “a culture of dependency had developed in the former homelands of Lebowa, Venda and Gazankulu that had destroyed the people’s will to achieve success and prosperity”. (The three former homelands amalgamated to form the Northern Province, now known as Limpopo province, under the new government).

Motsoaledi affirmed that it was the government’s most important strategy “to change the mindset of people who had been welfare beneficiaries and to instill a sense of independence and ownership (in them)”.

The MEC then cited a citrus project at Soekmekaar where 137 workers had each applied for a R16 000 subsidy from the government and, in addition, had obtained R350 000 from the Land Bank. In 2000, they purchased the farm for R2,1 million. Dr. Motsoaledi claimed the provincial government would “support all agricultural projects”. The farm workers on the newly-transferred Soekmekaar property “are now independent and enjoy ownership of the farm”, he said. The (Limpopo) provincial government was trying to redress “the mess” created by the former homeland administrations, he averred, and he then accused previous white managers of homelands projects of mismanagement. (Our findings are completely to the contrary. Every homeland project which was handed over to the present government was efficient and productive. Some were on their way to further potential, but in all examples, if there was failure, it was drought or some other natural disaster. There was little, if any, mismanagement and ineptitude). What happened to the Soekmekaar farm?

The farm’s previous owner was asked to stay on for five years to help the new owners. He managed a few years, then left in disgust. He said it was nothing but meeting after meeting, and no decisions were made, while everyone argued about salaries. The farm produced tangerines, oranges and other citrus, plus avocados and granadilla. It was a beautiful farm, say people from the area. After the old owner left, the farm collapsed. The granadilla plantation disappeared. The other fruit was unmarketable – it was too small because it had not been fertilized. No spraying had been undertaken. And the boreholes were not functioning.

The community didn’t pay their electricity. The sprinkler system was then sold, as were the cold rooms. Everything went for a veritable song – the packing equipment, the belting, all loose assets, everything removable was removed. A farmer nearby saw what was happening and told the community to at least plant mealies. He offered to buy the seeds and plant for them, and they would split the profit. But the community started arguing about who within their group would get what profit, and the farmer gave up.

Creditors moved in and took certain machinery and equipment which was apparently leased.

At present, there are two or three people on the farm, according to local observers. They survive by fishing and grazing their cattle, sometimes on neighboring farms because their fencing is broken. It would appear Dr. Motsoaledi has not come back to see what happened to the people who’s “will had been destroyed because of their dependency on former homeland developments”. A comment would not go amiss here. This is a perfect example of how the public is misled by grandiose statements at handing-over ceremonies, suitably reported on and sometimes embellished by the press. In fact, the results of the outlay of taxpayers’ money are kept hidden, never mind the loss of production and the loss of taxation to the country’s fiscus. This and hundreds of other cases throughout the country are examples of criminal neglect by the government and provincial authorities who should be monitoring what happens to taxpayers’ money and to the hapless people who are left to “farm” virtually on their own.

The Khajadira Farm

In this case, the press was vigilant, but nothing was done to correct the situation. “At least 613 farm-worker families in the Northern Province (now Limpopo) face eviction or have already lost their land after local land affairs officials bungled land redistribution projects,” said a local newspaper.(15)

This was an October 2001 report about “disasters which included flagship redistribution projects such as the R3,1 million Khajadira farm which was supposed to provide a new start for 230 families”.(16) Land Affairs officials had neglected to tell the families they had won ownership of the 299 ha citrus farm, giving a community leader and his deputy the chance to secretly use all 230 title deeds as collateral in hotel and bottle store deals.(17) Attorneys then sold the farm for R600 000 after the leader and his deputy faulted on payments for a Leydsdorp hotel and a Lenyenye bottle store.

Declared an official of the NGO National Land Committee (NLC): “This kind of shoddy follow through and after-care service by Land Affairs is shattering people’s lives and their trust in the system. What is the use of giving people land if you simply abandon them without the skills or resources to manage it? The real tragedy is that this is not an isolated incident”. (18)

This particular newspaper article mentions two other incidents involving farms costing R2,1 million and R 2,2 million, and involving 383 families. Said the NLC: “Some beneficiaries simply want new houses but are then expected to run entire farms”. If this is the case, and there is no reason to believe it isn’t, then the Department of Land Affairs is not choosing land beneficiaries well. If a land claim is granted, and taxpayers fund it, then the farm must carry on producing. If it doesn’t, then this is fraudulent.

There are many more questions to be asked about agriculture in Limpopo province.

A figure of R3,5 million was reported as having been paid to consultants and advisers in the province in 2001. In many instances, these consultants were involved in what was called the “revitalization” of irrigation schemes and the “commercialization” of projects of the discredited ARDC.(19) In May 2002, Dr. Motsoaledi declared that multi-million rand programmes aimed at poverty eradication collapsed in his province “because beneficiaries did not know what to do with the money”. Tabling a budget of R721 million in the provincial legislature, Motsoaledi said that of an amount of more than R1 billion spent in one year, no significant outcome could be noticed.(20)

Dr. Motsoaledi receives mixed reviews from the people to whom we have spoken. There is no doubt he was landed with an agricultural calamity when he took over, and he is trying to resuscitate the many failed citrus estates in the province. We should wait and see what happens to the projects which he says are being reconstructed. They are on the mend because of consultants who have been called in on contract. By definition, this is a temporary solution to the catastrophe which struck one of South Africa’s most fertile provinces. The future will tell, but the omens are not good. If nobody follows through on land redistribution transfers, then the policy is an abject and expensive failure. It must be discontinued because the province cannot afford any more fiascoes.

The MEC appears to be trying to prevent further collapses through his new policy of lease-back. According to a report in the Letaba Herald (September 2003), another 225 farms totaling some 31 000 ha in the Mooketsi and Duiwelskloof areas of the Letaba district have been gazetted and are the subject of Land Claims Court hearings. The report says that government policy “is also to offer owners whose properties have been declared legitimately claimable, the option of doing lease-back and other joint deals with the tribal communities concerned”.

Some farmers say they would be prepared to enter into such a deal, while others ask the question: who will re-capitalize the project as time goes by? The lessee will not own the property so will not be prepared to put money into it, and those who own it may be short of capital.

This is a real problem. Lease-backs mean someone has to be the boss, and arguments could arise regarding management policy that could be a sticking point for further development. The joint venture proposal is also a problem for the same reason. The Polokwane Land Claims Commission told us that they are aware of the failures of the past, and that they do not want to repeat them. They want every land claimant to enter into a contract or a partnership with white farmers.

“Most of the farms will collapse if we do not have joint ventures”, said the LCC’s representative. “We cannot just hand over these farms to unskilled people, otherwise the whole industry will suffer. We now ask claimants if they want to become involved in farming.” The Limpopo LCC set out this policy in a structured document, and it remains to be seen whether it will work in practice. At least the LCC is trying in this province. Agriculture is of vital importance to employment in the province. According to the October 2001 census, agriculture was responsible for the employment of 10% of the working population throughout South Africa, but reached a high of 17,8% in Limpopo. This is exceptionally important when it is remembered that 34% of the population of 20 years or more has had no schooling.

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