THE BLOG
18/12/2017 21:47 SAST | Updated 18/12/2017 21:47 SAST

Pineapples Offer Huge Opportunity In Eastern Cape

Pineapple production is a huge business opportunity in the area, given its ideal climatic conditions and suitability for cultivation.

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Unemployment is rife in Eastern Cape, currently estimated at 28 percent. However, there are a number of opportunities that could counter this depressing reality, given that the province has large tracts of underutilised land which could potentially be used productively.

Some local residents are troubled by increasing unemployment and poverty, as this poses a great threat to the province in terms of crime. One way of addressing this would be to channel energy into growing the province's agricultural sector, thereby creating job opportunities.

Growing up in Eastern Cape, I was always interested to see how people from different villages viewed agriculture. Notwithstanding the potential certain areas in the region presented, many prioritised subsistence farming despite the vast opportunities to expand their operations to a commercial scale.

Peddie in Eastern Cape is one area with a potential growth node for agriculture as yet untapped. Its potential for expanded agricultural production is the result of many industrious communities already mobilised through government-supported farming programmes and investments in the area.

One project currently doing well is the Bhingqala Pineapple Cooperative.

Pineapple production is a huge agribusiness opportunity thanks to the region's ideal climatic conditions and suitability for cultivation. Pineapples were introduced to Eastern Cape in 1865 at Bathurst, a town just 70km away from Peddie.

South African pineapples flower within 14 to 20 months of planting, with summer and winter fruits taking five and seven months, respectively, to mature. However, the first crops are usually harvested after 18 to 24 months, and the two crop cycles can take up to four years.

During the apartheid era, this enterprise provided huge employment opportunities for locals through the Ciskei Agricultural Corporation (Ulimcor) Farms. However, the collapse of these farms in the late 1990s was followed by an uptick in unemployment, which escalated both poverty and crime rates.

The situation resulted in youth migration in search for greater opportunities. On the other hand, such challenges presented opportunities for some of the residents.

South Africa's top five pineapple export destinations include Botswana -- which has amassed 18 percent of the total exports in the last five years...

A local village took a stand to organise themselves into a cooperative, and Bhingqala was born. To date, the project has made great strides to curb unemployment in Peddie. The farm is 583 hectares in extent, but only has 65ha currently under production.

In the 2014/15 production season, the project received funds to a tune of R400,000 from the Eastern Cape Department of Rural Development and Agrarian Reform, to expand its farming operations by 15ha.

Despite the challenges faced by the project, 300 tons of pineapples were harvested in the 2014/15 season -- with a return on investment of R2,500/t, they amounted to R750,000 in financial turnover. In 2016, the project harvested 750 tons, amounting to a value of R1,8-million. They expect to harvest 970 tons in 2017, with a value of R2,4-million.

The project has an off-take agreement with distributor Summer Pride -- which markets 20 percent of its produce locally and 80 percent abroad, and currently employs 32 permanent workers and 12 seasonal workers. It is affiliated to the Pineapple Growers Association of South Africa.

South Africa's top five pineapple export destinations include Botswana -- which has bought 18 percent of our total exports in the past five years –– Saudi Arabia (18 percent), UAE (10 percent), Namibia (9 percent) and the Netherlands (16).

Chart: Top five South African pineapple export destinations in the last five years

Source: ITC, 2017

10ha of the farm's 583ha total are prioritised for maize production as a form of diversification. In the long run, the project aims to focus on agroprocessing by producing pineapple juice, tinned fruit and jam.

This enterprise presents the province with an opportunity to develop a large agroindustrial hub and significantly reorder spatial forms of economic action and growth, by encouraging a value-adding agroprocessing industry, allied industries and services, and developing new settlements of technical and professional employees in this region.

This project also presents an ideal opportunity for government to reach the goals set in the New Growth Paths policy.

The New Growth Paths (NGP) policy identifies agriculture as one of the key job-creating sectors, with the potential to create job opportunities for 300,000 households in agriculture smallholder schemes and 145-000 jobs in agroprocessing by 2020.

The Bhingqala Pineapple Cooperative is also in line with the success measures of the Revitalisation of the Agricultural and the Agro-processing Value Chain (RAAVC) and the Agricultural Policy Action Plan.

According to the Department of Agriculture, Forestry and Fisheries' 2017/18 Annual Performance Plan, these policies will measure their success in terms of food security, job creation and the gross domestic product. The project ticks all these boxes.