A dream comes true for timber farmer
Themba has extensive experience in forestry with both Sappi and Mondi, and over the past 10 years or so has been involved in the development of three community forestry projects in the Umzimkhulu area with his partner in Rural Forest Management cc, Peter Nixon.
|Themba Radebe on his timber farm, keeping an eye on harvesting operations.||Themba Radebe (centre) with workers Elvis Bhungane (left) and Solly Manqele.|
In 2007 Themba joined forces with eight members of his family to purchase a 260 ha timber farm from Sappi, who agreed to the sale in support of government's land redistribution programme.
The Radebe family members raised R740 000 through a LRAD grant from the Department of Land Affairs, and put in R80 000 of their own money. The balance of the funding required was provided by the Industrial Development Corporation (IDC) under a subordinated loan facility of R2.8 million.
Because of the age classes of the trees growing on the farm, it was anticipated that there would be very little income off the farm for the first two years, so IDC structured the loan to take this into consideration. Thus IDC approved a capital repayment moratorium for the first two years and interest was capitalised for the first year. The loan will be repaid over a 15 year period with a bullet repayment to be made in the final year to achieve IDC's required after tax return of 2.5% on the investment.
Themba entered into a mentorship agreement with Rural Forest Management whereby they provide technical, management and business support. Sappi also provided an offtake agreement for the timber.
The farm is 260 ha in extent, with 140 ha planted to Eucalyptus grandis. The Radebe's harvested 21 hectares last year (yield 4 225 tons), and have just completed harvesting 13.5 ha this year with an expected yield of 3 056 tons.
All the work on the farm is done by members of the local community, some of whom are living on the farm. The Radebe's employ two harvesting teams (total 32 people) to do all the felling, stripping, cross-cutting (2,4 m lengths) and stacking by hand. The team is reduced to 10 people after harvesting to do silviculture work.
"Unfortunately, we can't provide employment for all of them the whole year round, but at least there is seasonal work for them here, whereas there was none before," said Themba.
Talks with Sappi are under way in an effort to secure contracting work to provide permanent employment for the staff and to utilise the spare capacity of the harvesting equipment.
Themba's brother, Frederick, has been pulled out of his job with the SA National Defence Force to manage the family farm full-time. Frederick had no previous forestry experience, but is being assisted by Themba, and has attended a forestry management course presented by Sappi.
The timber harvested on the farm is sold to the Sappi-Saicor mill, which is about 110 kms from the farm. The Radebe's use their own tractor and trailer to haul the timber from the field to a depot on the farm, from where Anderson Transport loads it up for the long haul to the mill.
The timber supply agreement with Sappi allows the Radebes to market a portion of the timber themselves. They sell transmission poles to Harding Treated Timbers (HTT), which fetches a higher price than pulp timber. The trees earmarked for transmission poles, which have to be long and straight, are selected and marked before harvesting begins. They are felled, stripped and stacked at roadside in 11,7 m lengths, from where they are collected by HTT's truck.
The Radebe's have earmarked a compartment which will be dedicated to growing timber for transmission poles, which need to grow for 12–14 years to reach the required size. This compartment will be thinned more aggressively to provide the space for the trees to grow, Themba explained.
They plan to introduce a bit of Eucalyptus dunnii on the farm this year, which Themba says is slightly less prone to snow damage compared to E. grandis.
During his years in forestry, Themba has learnt the value of being certified by FSC, and so he is busy preparing his farm for certification. FSC certified timber earns a R12 per ton bonus, and it is usually the non-certified timber that is cut back first by the mills during periods of low demand, as has been the case recently as a consequence of the current economic recession.
The family also plan to run a herd of cattle on the farm, which will help to reduce the fuel load and provide an additional source of income. Fire is an ever-present danger, and eight employees have received training in firefighting and are on standby throughout the fire season. They have two bakkie sakkies and a tractor-driven water tanker at their disposal for emergencies.
Themba was eager to express his appreciation to both Sappi and the IDC for their roles in the purchase of the timber farm.
"By agreeing to sell the farm to my family, Sappi has made it possible for us to realise our dream of owning our own commercial farm, and by so doing they have made a big contribution to black economic empowerment. The IDC also played a crucial role by agreeing to finance the purchase, and by structuring the loan in a way that would be affordable for us," he said.
Unfortunately, Themba cannot spend all his time working on the family farm as during the week he is busy managing the three community projects in Umzimkhulu. These projects were established from scratch with assistance from Rural Forest Management on behalf of communities that had no prior forestry experience. Harvesting on the three projects has begun and they are now in rotation. These community projects are self-sustaining and are excellent examples of how forestry can provide development opportunities and serve as a catalyst for local economic development among rural communities.
Published in July/August 2009