32 years ago, Gordon Gekko a disgraced Wall Street tycoon stepped up to the podium and shook the world out of its comfort seat and said “Greed, for lack of a better word, is good.”
Greed has enveloped a Jobs Fund programme meant to assist Eastern Cape communal livestock farmers with markets. Valued at R100 million, the Eastern Cape Beef Feed Fund was meant to assist 188 black smallholder livestock farmers.
According to EC Beef Fund General Manager for Operations, Vusi Buthelezi, the sole purpose is to provide operating capital, technical support, training, mentorship and management support, access to markets, and related services to black smallholder farmers.
“All these services we provide free of charge to participating black smallholder farmers” he said. This was disputed by the local cooperative in Peddie who said the scheme was a form of contract farming.
The scheme was an insult to farmers according to organised local cooperatives group. “Komaga Beef is just a front for Claremont Farming which is white owned. Berlin Beef abattoir is a subsidiary of Claremont Farming which coincidentally is the supposed market where communal livestock will be supplied too” said an anonymous source.
According to the Jobs Fund website, Claremont Farming was granted R12 million to conduct training, mentorship and support for 10 black farms in pork production but changed track to focus on livestock. This is where the project name changed from AgriBEE Agro Processing Linkage to EC Beef Fund.
“These guys used Komaga Beef (which is black owned) to source funding of R72 million from the Eastern Cape Department of Agrarian and Rural Development (DRDAR) to match the Jobs Fund investment” said the source.
However, the modus operandi used by Claremont Farming and Komaga Beef left a bitter taste and anger in farmers.
“The money from Jobs Fund and DRDAR through EC Beef Fund is used to buy weaners at 180kg and placed on black smallholder farms. The Fund, unknowingly to farmers, provides feed and vaccines on a surcharge. As soon as these weaners weigh 230-240 kg and ready to be sold, the fund deducts its input costs from the sales” said the source.
Buthelezi did not deny this at all and said that all the farmers in the programme were told beforehand when they joined. “Yes, these input costs are deducted from the revenue generated by the farmer, and the profit paid out to the farmer at the end of a 4-6-month cycle” he said.
After total deductions by the Fund, farmers would be left with a measly R700 from a weaner that could have easily fetched R2500 and above in the market.
“The operating costs of any business are part of the business’s deductible expenses. There is no business that just takes revenue and not pay its operating costs” added Buthelezi.
It was clear that the scheme was a pure business venture using contract farming. In the contract documents we have seen, the fund ridiculously charges project management fees for reasons unknown and reverts back these fees as loans to farmers.
The fiasco has caused serious fracture and divisions at DRDAR as those opposing the modus operandi of the Fund have been viciously side-lined. It was discovered by some DRDAR officials that when farmers were unable to ‘payback the loans’ or produce the quantities expected as per the contract, the Fund attached farmers machinery sponsored by the state and auctioned it off.
The Eastern Cape Rural Development Agency (ECRDA) took the black farmers contracts on review which temporarily suspended the illegal operations of the Fund.
“The EC Beef Fund, is defending the matter by stating its side of the story, the process is still on-going. The second phase of the project, which is to supply good quality beef breeding heifers to participating Black smallholder farmers is currently being rolled out, albeit at a slower pace due to the ECRDA challenge” said Buthelezi.
Jobs Fund, DRDAR and ECRDA at the time of going to print were unavailable to comment. It was concerning that such methods of pillaging the state went unchecked. Mzansi Agriculture Talk is also investigating similar alleged conduct by Tongaat Hullet contract grower scheme in which Jobs Fund has invested R150 million.
The fight against collusion and corruption was a sobering relief. More local co-operatives were replacing black farming unions who according to these cooperatives have seemingly ignored the cries of its farmers.
“Around Eastern Cape, strong farming cooperatives per commodity are mushrooming similar to Ikhepu model to precisely stand guard against any exploitation. Our black unions have failed to take farmers concerns to higher echelons. If it was Transvaal Agricultural Union (TAU) and Agri SA members affected, there would have been such drastic noise about the matter” said the source.
In Amathole, the cooperative managed to wade off the EC Beef Feed Fund advances to unsuspecting farmers and the fight to block the Fund is permeating throughout all Eastern Cape districts.
“We are not fighting Jobs Fund or the Department but the rampant greed and corruption which has become normalised in our province at the expense of farmers” said the source.