How We Made It in Africa | 13 February 2011
A group of South African farmers is getting ready to go up to the Republic of the Congo and start with commercial agriculture in the central African state.
The process started in 2009 when the Congo extended a formal invitation to South African farmers to investigate the possibility of farming in the Congo. The country’s agriculture sector has been described as very underdeveloped.
An organisation called Congo Agriculture has been established. Congo Agriculture, which is affiliated to South African farmers union Agri SA, will facilitate and drive the process of setting up farmers in the Congo.
Pioneers in commercial agriculture
Gert Rall, CEO of Congo Agriculture, said the first farmers are set to travel to the Congo in March to pick their farms and register local companies. The group has been asked to start operations on a farm of around 80,000 hectares, although according to Rall, the area of land available is so vast that one cannot put an exact size on it. “Practically half of the country is available for the development of agriculture,” he said.
The farmers will initially focus on maize, all of which will be produced for local consumption as it is expected that no crops will be exported within the first five years.
One of the largest challenges the farmers will face is the Congo’s lack of infrastructure. “One big problem is there is hardly any infrastructure, so . . . whatever we want, we need to put it there,” Rall said.
The Congo’s favourable climate and incentives offered by the government should, however, make up for some of the difficulties. The region has a rainfall of between 1,500mm and 2,000mm a year. In addition the farmers will receive a five-year tax holiday and can bring in their equipment duty-free.
Rall said they will also receive much better prices for their maize than currently in South Africa. “There is a formula to calculate the price, but I can tell you the price we are negotiating at this stage is much, much higher than the South African maize price,” he said. Production costs in the Congo are also expected to be much lower than in South Africa.
Congo Agriculture is ideally looking for farmers to run their operations in the Congo as an extension of their businesses in South Africa. “It would be very difficult for a guy to go up on his own there, without capital or without the necessary back-up support from home,” Rall noted.
Steering clear of past mistakes
Africa’s agriculture sector is currently receiving a lot of interest from all over the world, but setting up operations on the continent does involve a degree of risk. Some of the Zimbabwean farmers who in 2004 were invited to start with commercial agriculture in Kwara State, Nigeria had to wait many years for promises of electricity and irrigation. They are also facing challenges to get financing from the banks.
“Irrigation is key to our project but there have been many delays in this area. The promise of a constant electricity supply has not yet materialised, although there are many electrical poles and wires on our farm. Finance is also still a problem. We battle to get the financial institutions to understand the concept of short-, medium- and long-term loans and the real need to have finance before the rainy season starts,” one of the farmers told How we made it in Africa in an interview last year.
Rall is, however, determined to take a cautious approach and not make the same mistakes as other South African farmers that ventured into the rest of the continent. “There are too many disasters that happened in the past in Africa where farmers lost everything, they had to come back home with nothing,” he said.
“It is very important . . . that whatever we do, we take small steps. We cannot afford to repeat the mistakes in the past that happened all over Africa,” Rall added.
A number of trade and investment protection agreements signed between the two countries’ respective governments, Agri SA and the farmers should offer some security. “We have five agreements, which have been ratified by both countries’ parliaments. If something goes wrong there, you can come and open a case in Pretoria to protect your property up there,” Rall explained.