Soya boom in Gúruè has produced few bigger farmers – so far
10 September 2012

By Joseph Hanlon and Teresa Smart

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...The first and largest land holder in soya is Hoyo Hoyo in Ruace, Gúruè, which is owned by Quifel which is controlled by Miguel Pais do Amaral, a Portuguese aristocrat and racing car driver. Quifel also owns LeYa which in turn owns two of the most important publishers in Mozambique, Texto Editores and Ndjira. In December 2009 the Council of Ministers granted Quifel 10,000 ha of the former Lioma state farm.

The project was controversial from the first. Proposals issued in 2009 made exaggerated claims about land held and potential profits. Standing on the farm on 21 August 2012, Rui Laurentino, CEO of Quifel Natural Resources, shrugs, waves his hands, and says the profit forecast "was never real. Investors will always discount it." And he admitted that they claimed more land than they actually had. Antonio Botelho, general manager in Mozambique, added: "the original plan was paper – unrealistic."

Perhaps because of this, the project did not attract sufficient investment funds and so little was done in the first two years – the period in which Mozambican law demands substantial progress on the plan on which the land concession is based. The law also requires that a formal demarcation of the land, with marker posts, be done within a year – in this case by December 2010 – but Laurentino admits it still has not been completed.

The area had been badly affected by the 1982-92 war; the state farm was abandoned due to Renamo attacks in 1986 and most people fled. By the end of the war the state farm was heavily overgrown, but people returned and began to clear the land. By 2008 many had occupied the area in good faith for over a decade, which under Mozambican law gives them squatters' rights. Clusa supported an association of 8 soya producers on 40 ha in a corner of the old state farm. Quifel was given the land by the Council of Ministers despite the rights of the occupants, but did nothing. For the 2010/11 season, Clusa had ploughed 300 ha on the old state farm, in part with funding from the Bill & Melinda Gates Foundation. Suddenly in December Quifel rushed to clear at least some land, re-ploughing 100 ha already ploughed by Clusa and destroying soya plants that were already sprouting. Very little was actually planted by Quifel, however.

Laurentino explained: "We started closest to the road. The people had also started closest to the road, but we were not going to open a road to the interior of our concession," so they used the same land. He knew it was cleared land, "but we did not come here to clear virgin land".
Tension with the community has increased. But Laurentino stressed: "We don't meet with the community. Let us be clear – we meet with the government." He continues: "I am here to be a farmer. ... We don't go to Ruace and have a gathering of people. We interact with government".

This year Hoyo Hoyo has hired and trained local workers, and is constructing its initial building using local material. However, government is increasing the pressure on Hoyo Hoyo to do the demarcation, resolve resettlement, and start production. Hoyo Hoyo says it wants to plant 3500 ha in the coming season, but still has only 7 tractors. Botolho says they will work three shifts, 24 hours a day.

But the real crisis is over resettlement. The community has always claimed that much of the state farm is being used by local people – their houses are outside the old farm but their plots are inside. Initially some people were simply forced off the land, and resistance and discontent increased. People said they were prepared to move, but only if new land is ploughed for their first season. Hoyo Hoyo agreed, and nearby land was allocated for resettlement, but it must be cleared of trees and no land preparation was done.

Hoyo Hoyo was finally forced in July to do a full survey with the community and GPS mapping of the 3500 ha the company says it wants to use in the coming season. The survey identified 836 farmers with 1945 ha. Clearing the resettlement land of trees has only just started. The district administrator has backed the community, and at a public meeting two months ago said that no one had to move until they were given an alternative plot where the land had been prepared.

It seems highly unlikely that Hoyo Hoyo can move a significant number of people and clear a large tract of its own land before the mid-December planting deadline.

4 other large companies

Three other large companies are active in soya in Gúruè district, and unlike Hoyo Hoyo, have built a good reputation with local communities. A fourth company is just starting.

AFRICAN CENTURY AGRICULTURE (ACA, FORMERLY GETT). Set up to supply soya as feed for King Frango, one of the largest poultry producers in Nampula, the company (then called GETT) was bought last year by African Century, an investment company registered in Mauritius and based in London. African Century Agriculture (ACA) is the largest contract farming company in Gúruè, and is initially supported by Swiss aid through InovAgro, in a three year contract. Half of the machinery is owned by InovAgro and half by ACA. In the first year, the Swiss pay 70% of running costs, 50% in the second year, and 30% the third year, with the rest covered by ACA. 2011/12 was the first year, and they had 844 contract farmers on 1250 ha. They did mechanical preparation of 350 ha. They argued that because soya planting is very shallow, it is not necessary to plough, so they only used a disk harrow, and then mechanical planters. Zimbabwean seed was imported and inoculants used. Those who did not have mechanical land preparation were given seed and inoculant, and opened land by hand. Half had credit from a microfinance bank backed by the Swiss, and half had ACA credit. ACA had intended to provide threshing, but their machinery arrived late and many farmers threshed manually and sold to other buyers. About 60% of the credit has been repaid. Only 17% of farmers have repaid their loans in full; 38% paid under a quarter, including some paying nothing at all.

ACA accepts some of the responsibility for the side-selling and non-repayment because of the late arrival of threshers, and has offered that all farmers can continue in the 2012/13 season, as long as they sign a letter accepted that they have a debt to ACA. Mechanical land preparation and seeding will be limited to farms of over 2.5 ha, with just seed and innoculant provided to small farmers, but an attempt will is being made to arrange credit to cover ganho ganho costs. They hope to do 1500 ha in the coming season. ACA has 1000 ha of its own, but does not expect to farm it until the 2013/14 season. "We will always focus on outgrowers," explains ACA head Rachel Grobbelaar, "but our own land gives us a guaranteed crop."

Production averaged 1.5t/ha, with a few farmers reaching 2 t/ha, in the 2011/12 season. Costs to ACA mechanised farmers were about 7300 Mt/ha, plus ganho ganho payments for weeding and harvesting, pushing the total cost to 8,500-10,000 Mt/ha, giving an average profit of 14,000 Mt/ha ($500).

REI DO AGRO. A US investment company whose only other experience is in the Ukraine, it has hired Zimbabwean management for a project that mixes own production and outgrowers. On the edge of Gúruè district, it has 2,500 ha of dense bush which has been little used since the war and must be cleared. Like Hoyo Hoyo, it initially failed to attract sufficient investors so started slowly, although it has now invested $5 million. But it moved to clear land and produce as quickly as possible. 2011/12 was the second season and it grew soya on 160 ha. It hopes to plant 600-1000 ha in the coming season, and now has enough machinery.

The long term plan is that most soya will come from their own production, and the rest from outgrowers. Chishamiso Mawoyo of Rei de Agro says "we have to move away from the old model having your own farm which is large and exclusive, to move to smaller farms that are inclusive of the community." 2011/12 was their first outgrower season with 30 farmers on 180 ha; they had come from Clusa, had 4 to 8 ha, and were known to be good farmers. Seed and land preparation was done by Rei do Agro on credit; 90% has been repaid. They aim for 50 outgrowers on 300 ha in 201/13, and hope to expand to at least 500 ha of outgrower farms. Mawoyo explains: "we are being selective about outgrowers. We want a small number of commercial farmers with yields and areas increasing."

When President Armando Guebuza visited Lioma on 24 April 2012, he visited Rei do Agro but not Hoyo Hoyo.

ALIF QUIMICA. A Mozambican company which recently re-asserted control of company land abandoned during the war. The land was occupied by farmers after the end of the war in 1992. Rather than contest that occupation, it has set up a contract farming system with the people on its former land, providing ploughing and seed for both soya and sunflower. In addition, it is reported to have allowed some other farmers to enter the land on a sharecropping basis. In the 2011/12 season it had 155 farmers on 300 ha.

AGROMOZ – AGRIBUSINESS DE MOÇAMBIQUE. The newest entrant was only formally announced on 6 September 2012, Agromoz is owned by Grupos Américo Amorin of Portugual (which owns Banco Unico in Mozambique), Pinesso (a major Brazilian soya producer), and Intelec Holdings (a Mozambican company part owned by President Armando Guebuza). It is believed to have been given part of the former state farm in Lioma to grow soya, but no details are available.

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