Misgund East Small Farmers’ Trust, Misgund

The Misgund East Small Farmers’ Trust project was established in 1996. It is one of the oldest equity farming schemes of its kind in South African and has truly come of age. Jenniville Uithaler is the production manager at Musgund East Small Farmers Trust is also a trustee of the trust. He has been at the helm of production and development of the trust since 2002 and his fellow trustees Booi Jacobs, chairman of the Trust and Jan Uithaler, vice chairman of the Trust are proud of the trust’s track record and are positive about the trusts’ future prospects.

The Misgund East Small Farmers’ Trust was established under the guidance of Mr Hendrik Kritzinger, an established farmer in the area and the employer of all the beneficiaries at the time. The 134 beneficiaties of the trust received a grant through the Department of Land Affairs LRAD grant scheme to buy Misgund Landgoed, a 95ha farm and at the time it had 35ha of apple and pear orchards. In 2002 the trust bought Laurita, a 65ha topfruit farm also in the Misgund area. In 2005 Hendrik Kritzinger sold his farming operation in the area to the DuToit Group and since then DuToit Agri, a division of the Du Toit Group, took over mentorship of the trust and this mentorship relationship is still in place.

Farming in the Langkloof has not been easy as over the years the farms have suffered flood damage, frequent hail damage and during 2016 and 2017 the severe drought in the area has a major impact on their the farm’s productions. Jenniville explained that at Laurita they were forced to remove 12ha of older orchards sooner that planned in order to save water. They also had to implement a picking strategy to pick the best fruit and in some cases sacrifice the rest. This fruit was mostly sent for juicing which generally returns a much lower price than fresh fruit. During November 2017 and January 2018 the area received good rains so the water security is considerably better for the season ahead. However, with the rains they also had some hail damage.

“We have hail in most years and in the past we usually had hail in summer but this has changed as we are now even get hail in winter,” explains Jenniville. “On 14 January is rained 60mm in 10 minutes and on the same day there were two hailstorms. We have just under 2ha of plums and these were badly damaged by the hail. The damage is estimated at 65% on the Laetitias and 25% on the Songolds. Fortunately we do have crop insurance so we will receive some compensation for this.”

Under these circumstances, it is clear that the Jobs Fund funding really arrived at a good time. “This has really been a blessing as our productions were badly affected due to the drought,” says Jenniville. “Hortgro contacted us and told us about the funds that were potentially available through the jobs fund project. We qualified to access the funding as we are a 100% empowerment project. As part of the application process the financial security of our business was investigated. The application process was quite comprehensive and required the completion of in-depth business plans. This process took place in 2016 and was the first year of the four year process. We completed a long wish list and we are extremely grateful for what we have received. During 2018 we will also expecting to receive a tractor and chemical spraycart from the Jobs Fund.”

“The 5ha of trees that they received from the Hortgro Tree project at Misgund East in 2012 have grown well and are thriving. However, the 5ha of Rosy Glo trees that were bought by Laurita (these been ordered as part of the Hortgro Tree project but then not funded) in 2013 did not grow well due to problems with the plant material and these have all been removed.”

“Since we removed 12ha of trees during the drought and lost the 5ha of trees at Laurita, our total area under orchards is now only 57ha. We have started with a re-establishment plan in 2017 and this will run to 2019. This has been made possible with the trees that we are receiving from the Jobs Fund. We planted 2.7ha of Panorama Goldens in 2017 and we plan to plant 3ha of Panorama Goldens again this year. In 2019 we will be planting a further 2.5ha of apples so in total we will be planting 8.2ha over three years.”

It has been 10 years since the Misgund East Small Farmers’ Trust acquired the 35% ownership of Koukamma Fruit Packers, a large packing and cold storage facility in Joubertina. The majority 65% shareholding in the Facility is held by the DuToit Group and the facility is also managed by the DuToit Group. Jenniville says that this has proved to be a very good investment as each year the packhouse shows a profit and this helps the trust to pay out our dividends. Three of the Misgund East Small Farmers’ Trust trustees serve on the directorship of Koukamma Fruit Packers.

“Johan Kotze and Pieter de Kock of DuToit Agri have been mentoring us for many years and this has been invaluable to us. We are also privileged to benefit from the DuToit Group’s purchasing scale of quantities benefit and this cost savings applies to all or inputs. The skills assistance and cost saving benefit we receive on an ongoing basis contribute enormously to the success of our farming operations.”

The close relationship with the DuToit Group is further strengthened by the fact that a number of the beneficiaries of the Misgund East Small Farmers’ Trust work on DuToit Group production units in the area. Booi Jacobs, the Trust’s chairman, is the assistant manager at the Du Toit Group’s Klipdrift farm and Jan Uithaler, the Trust’s vice-chairman is a supervisor at the Du Toit Group Damplaas. They have both held their positions on the Trust’s board for six years.

“The Misgund East Small Farmers’ Trust still has 134 beneficiaries and of these only five work on the Trust’s farms,” explains Booi Jacobs. “Holding the position of chairman is not always easy as it is sometimes necessary to make unpopular decisions, particularly regarding dividend payments. From the shareholders perspective, it is difficult for them when we have to cut back on paying dividends. The Jobs Fund funding has therefore arrived at a crucial time and is changing our fortunes looking forward.”

“Our ultimate dream would be to buy more land,” says the trust’s vice-chairman Jan Uithaler. “Currently we have less than 1 hectare per shareholder and this is not really sustainable in the longterm.”