The Eastern Cape Rural Development Agency (ECRDA) has set aside R11 million in the 2021/22 financial year which is aimed at transforming its four grain-producing Rural Enterprise Development (Red) Hubs into aggregation centres.
This means the Red Hubs located in Mqanduli, Ncora, Emalahleni and Mbizana will diversify their operations to include other crops such as potatoes, sweet potatoes, amadumbe and poultry to support the sale of eggs. A total of R231,4 million has been spent on the development of the Red Hubs since their establishment in 2013 benefitting a total of 2,135 beneficiaries.
The Red Hubs are made of 46 primary co-operatives who have a total of 2,135 members. The co-operatives are made up of individual landowners who contribute their land parcels for the production of grain products. In turn, they sell their products to the milling plants at the Red Hubs which secure a market for their produce at market related prices. They also receive mechanisation, planting, mentorship and market access support from various public and private sector partners at the hubs.
“The Red Hubs are currently focussed on the production of grains primarily white maize. This essentially benefits those farmers who produce maize while it creates a barrier to entry for those farmers who produce other crops. The aggregation centres are meant to break down this barrier to broaden participation to farmers and primary co-operatives who produce alternative crops so that they can join and benefit from the Red Hubs facilities. This means they will also benefit from selling their harvests to the milling plants at market related prices thereby gaining access to markets. This should drive a strong co-operatives movement in the rural Eastern Cape.
“The ECRDA expects that this transformation process into aggregation centres should be completed in the next three years. The Red Hubs are already assessing applications from co-operatives in the region who produce these alternative crops,” says ECRDA chief executive officer Nhlanganiso Dladla.
For example, the Mbizana Red Hub plans to reengineer one of its sheds at its milling plant to install a potato washer and sorter in order to sell washed potatoes to the market and to retailers once producers of alternative crops are introduced into the hub. The Red Hub also provides storage facilities for harvests. Currently, the Red Hub has a milling plant with a 1,1 tons per hour processing capacity in Mbizana. It is also in the process of buying a samp polisher. The hub was previously not selling samp. The processing capacity of the milling plant can be improved to 4,4 tons an hour when a samp polisher is introduced. In addition, the two silos at the hub have a 2,000 ton carrying capacity.
“In Mbizana the national Department of Rural Development and Land Reform (DRDLR) has donated R1 million worth of fertilisers for white maize production in the area this year. This year the Mbizana Red Hub will expand its planting area to 800 hectares of white maize. In addition, one of the largest field crop seed producers and suppliers in Africa, Pannar, has donated 200 bags of seeds worth R800 000 toward the cultivation of maize in the hub. Pannar also trains the 21 primary co-operatives which operate within the Red Hub on commercial crop production and planting methods in partnership with the ECRDA. This is done every year before the start of each planting season,” says Dladla.
He says the co-operatives will also receive mechanisation support from the Department of Rural Development and Agrarian Reform (DRDAR) in the form of discing, planting, top dressing as well as pre and post spraying. The Mbizana Red Hub has eight tractors which provide ploughing services to the co-operatives.
“The Red Hub also has a weather station which does forecasts and analyses rainfall trends year-to-year. This is helpful in ensuring that planting takes place at the right time. It also informs the type of maize that should be planted.
The Red Hub sells 10kg, 12,5kg and 25kg bags of mealie meal as well as 30kg bags of feed under a generic brand. The hub will soon launch its own brand called Isivuno. An off-take agreement is being concluded with Bargain Wholesalers in order to for them to buy products from the Red Hub. Off-take agreements with Qumbu Spar and Hello Choice are already in place,” Dladla adds.
He says the Red Hub is also exploring the informal market at various social grant paypoints to drive brand recognition. The hub collects significant revenues from these paypoints.
For more information:
Eastern Cape Rural Development Agency
C. 082 462 2714