Overview & Performance
Agriculture is traditionally the background of Swaziland’s economy and a major source of employment for rural households with over 70% of the population relying on this sector for their incomes. The diverse agricultural activities that take place in the country include sugar cane production, citrus fruit, maize and other cereal crops, cotton, forestry and livestock. The sector expanded by 2.0% in 2007/8 and its share of GDP was 12.7%. However, a far greater proportion is indirectly related agriculture as a significant part of the manufacturing sector is value-added through the processing of products, such as sugar and timber. The main threats to agriculture are the impact of HIV/AIDS and globalisation, which implies the removal or reduction of tariffs. Other challenges faced including global warming, erratic rainfall and trans-border animal diseases. Swaziland’s agricultural sector is divided into the two sub-sectors of formal and informal/traditional.
Traditional Agriculture
Swazi Nation Land (SNL) is acquired in terms of traditional law and custom, and while agricultural activities in these areas may be carried out for subsistence only, ongoing efforts are being made to encourage SNL farmers to perform commercially. Assisted by the large estates and the Sugar Association, the number of small cane growers who produce commercially on SNL continues to increase. Small farmers also provide a certain proportion of maize, the staple food with cotton and tobacco also produced by this sector. Real GDP in this category was reported to be up by 27% in contrast with a previous decline. The Maguga Dam project in northern Swaziland is benefiting about 25,000 people through sugar cane production on 7,400 ha. of irrigated land. The Usutu Smallholder Development Project is another project that will benefit the people and by the end of the first phase (2002/10) will provide irrigation on 6,500 ha. of land. HIV/AIDS is inevitably having an adverse impact on vulnerable SNL farmers, both in terms of time off and by the strain on resources, which are diverted from inputs to care of the sick. Formal
Agriculture
This category embraces the large sugar and citrus estates, forestry and other undertakings on individual tenure farms (ITFs) which generate foreign exchange earnings. Swazican exports most of the pineapples and citrus it processes while sugar produced at the large mills and wood pulp from SAPPI Usuthu are also major export products. Formal agriculture also covers meat and poultry production, dairy farming, and fruit and vegetable growing for mostly local consumption but with an everincreasing export market, particularly of baby vegetables, sales for which were reported to be up by 40%.
Dalcrue Agricultural Holdings
DAH is a multi-enterprise firm engaged in agro-business at Malkerns, located along Pondo Road to Tinkhukhu farm. DAH undertakes various agricultural activities including sugarcane production, maize milling, dairy production, cattle ranching, forestry as well as leasing of land for commercial agriculture. These activities are mainly in the Manzini, Lubombo and Shiselweni regions, while leasing of land is also in the Hhohho region. The DAH maize milling operation has established the ‘Lijaha Sisu Maize Meal’ food brand. This is a special sifted maize product that has been in the market since 1995. Locally grown white rice and legumes are also distributed. Most common is the ‘Sihlabane Sugar Beans’ brand that was launched in 2007. The DAH dairy breeds a Friesian herd on 520ha and has two milking parlours. Milk products are available at wholesale prices on the farm, including raw fresh milk, pasteurized fresh milk and Emasi. The farm was recently revamped to facilitate maximum harvest from the pastures for high milk yields. The bulk of the daily raw milk harvest is supplied to local milk processors. In 2007, Dalcrue’s pasteurized milk and emasi under the ‘Ingula Yesive’ brand was launched and a good consumer base had been established since. DAH’s sugarcane production is part of the Simunye group of the Swaziland Cane Growers Association. DAH harvests about 30,000 tonnes of sugarcane a year and this is delivered for milling at the Royal Swaziland Sugar Corporation’s Simunye mill. Within the group, DAH benefits from synergies in cutting and hauling contracting, enabling cost containment through outsourcing some aspects of management. DAH ranching was intensified in 2002 to include the breeding of the Drakensberger type yearlings for feedlots. DAH also owns an 800ha forest plantation, consisting of gum and wattle at Shiselweni. DAH has grown to be the Kingdom’s largest multi-agricultural food company and is driven by the need for affordable quality food items in the country. The company strives for food reliability by establishing relations with local farmers in various initiatives including land availability and distribution of farm produce. International alliances are also being established.
Sugar
Sugar production has been at the epicenter of the Swazi economy since the mid-1950s, and production has grown significantly. While the annual production was 165, 000 tonnes at Independence in 1968, the industry currently produces about 630, 000 tonnes each year. The sugar industry comprises three mills and over 400 farmers (including farmers’ associations with membership of several hundred), and remains the backbone of the modern day Swazi economy. The industry contributes about 12% to national output, 35% to private sector wage employment and 11% to national wage employment. Despite a slight decline in area cultivated and harvested, total cane production increased by 2.9% in 2007/08 to reach 5.1 million tonnes from 4.9 million tonnes the previous year, due to increased productivity on the farms. Sugar production also increased by 1.3% to reach 631,236 the same year, mainly due to a 3.3% increase in cane yields which rose from 97.8 tonnes to 101.02 tonnes/hectare. During the same period, the sucrose content declined marginally from 14.4% to 14.3%. While the quantity of sugar sales declined by 1.8% in 2007/08, total revenue generated increased by 25.1% to reach E2.53 billion from E2.02 billion the year before. This good performance was a result of shifts in the quantity of sales out of the three lowerpriced segments of SACU, US and World into the highest priced EU market. Given the export-orientation of the sugar industry, there are a number of international agreements that impact on sugar sales by the Swaziland Sugar Association (SSA). These are the SADC Sugar Cooperation Agreement (under which non-SACU/SADC sugar producers are allowed duty free quota access into the SACU market – SSA’s domestic market); ACP-EU Sugar Protocol (under which Swaziland sells a certain amount of sugar duty-free into the EU market – soon to be replaced by Economic Partnership Agreements); US Sugar Programme (under which Swaziland has a tariff rate quota); and COMESA derogation (under which Swaziland receives a reduction on sugar import duties levied by non-SADC COMESA countries).
An Interim Economic Partnership Agreement (IEPA) was initiated in 2007 to safeguard market access for Swazi sugar into Europe, while negotiations for a comprehensive EPA was due for conclusion by 31 December 2008. The conclusion of this new trade regime will provide a more sustainable (and WTO-compatible) framework for the marketing of Swazi sugar, as sales into the EU market remain an important route for industry profitability. The Swaziland Sugar Association The SSA was established in 1967 with responsibility to provide the services necessary for the general development of the industry and the marketing of Swaziland’s sugar in particular. This is to ensure optimum returns on investment for sbyb 2009
existing and future producers and SSA has continued to grow rapidly as it seeks to expand the destination markets for Swazi sugar. The local industry derives its structure from the Sugar Act of 1967. Millers and growers belong to the Sugar Millers Association and the Cane Growers Association respectively. They are of equal status and are represented as such on the Council of the Sugar Association, the highest policy making body in the industry. SSA also provides technical services to assist the industry raise operational efficiency, especially at field level. This includes assisting smallholder cane growers working on Swazi Nation Land through training, extension services and irrigation advice. In July 2001, SSA was audited by the British Standards Institute and recommended for certification under the ISO 0991:200, a quality management system designed to place operations at a systematic, consistent level. Certification was received in September 2001.
The Royal Swaziland Sugar Coporation
RSSC, located in the north-eastern lowveld is one of the largest companies in Swaziland, employing in excess of 3,000 people (including seasonal staff) and producing two-thirds of the country’s sugar. Listed on the Swaziland Stock Exchange, RSSC is owned by several hundred shareholders, the majority being Tibiyo Taka Ngwane with 53.1%, followed by Tsb Sugar International with 26.2%. Other shareholders include the Swaziland Government, the Nigerian Government, Coca-Cola and Booker Tate. RSSC manages some 15,607 hectares of irrigated sugar cane on two estates leased from the Swazi Nation and manages a further 5,011 hectares on behalf of third parties, delivering approximately 2.3 million tonnes of cane per season to the Group’s two sugar mills. These currently crush cane at a combined throughput of 700 tonnes per hour, producing about 430,000 tonnes of sugar each season. RSSC also operates a sugar refinery at the Mhlume mill, which produces 150,000 tonnes of refined sugar, and a 32 million litre capacity ethanol plant adjacent to the Simunye mill. RSSC plays a significant role in the development of rural Swaziland with over 2,500 families involved in cane production as small-scale farmers who deliver to the mills. From a land area of 11,356 hectares, they produce 1.2 million tonnes of sugar cane and supply 52.0% of the Mhlume mill’s and 25.0% of the Simunye mill’s totals. By March 2008 over 3,095 hectares of cane had been developed by these farmers in the Komati Basin under the Swaziland Water and Agricultural Development Enterprise (SWADE)
RSSC provides and manages housing and all related infrastructure for its employees and their dependants at estates’ various towns and villages. Apart from the Group’s direct employees, a further 20,000 people live on these estates. The group provides health care at two site based clinics, managed by a Medical Services Manager, with emphasis on primary health care and disease prevention. First class primary education is provided at the private English medium school Thembelisha Preparatory School and the group is a founder member and a major stakeholder in Mananga College, a private high school established to improve the availability of first class education facilities in the lowveld. There are also four primary and three government-owned high schools on the estate, to which the Group provides substantial support. A wide range of recreational facilities are provided through two RSSC-owned country clubs, as well as through other facilities at strategic areas on each estate. The Group also provides sponsorship for cultural and sporting activities, including the RSSC Football Club. A well established Safety, Health and Environmental Policy aims to provide ideal working conditions, safeguarding all those affected by the operations and ensuring the maintenance of a clean and healthy environment. RSSC recognises HIV/AIDS as a strategic business issue and is managing it at the highest level through the HIV/AIDS Tripartite Committee in which Management, the Union and the Staff Association are represented. The Committee is chaired by the Managing Director. An HIV/AIDS Program Coordinator facilitates all HIV/ AIDS programs and related issues. The two Voluntary Counselling and Testing (VCT) centres which were established jointly with the National Emergency Response Council on HIV/AIDS (NERCHA) in 2003 at the estates continue to operate successfully. Free Anti Retroviral Treatment (ART) was made available to employees in 2004 through NERCHA from the Global Fund and remains accessible.
Ubombo Sugar
Previously known as Ubombo Ranches Limited, the company was the first to produce sugar in Swaziland in 1958. It was initially processed in a small factory on the bank of the Great Usuthu River, where the company-supported Sisekelo High School stands today. In 1960 a new and larger factory was commissioned at the present site. The business was a joint venture between Lonrho and Tibiyo TakaNgwane until 1998, when Illovo Sugar bought Lonrho’s 60% shareholding. The name Ubombo Sugar and a new corporate image were then adopted. The current mill capacity is 405 MT of cane crushed per hour. During the 2004/5 season, the factory processed 1,769,727 MT of cane, of which 715,831 was grown in Ubombo’s fields. As well as managing its own estate, Ubombo is committed to assisting emerging growers and employs two staff members to provide extension services to producers that are current and prospective suppliers of cane to the factory. The company sold some of its land, known as Poortzicht to create and empower new medium scale sugarcane farmers. The farms range from 30 to 50 hectares and initial indications are that the project is successful and improving the standard of living of the beneficiaries. The company has also developed and manages some 2,360 hectares of irrigated sugar cane on behalf of Tibiyo Taka Ngwane, a company that holds resources in trust for the nation. Of this land, 483 ha. is under a modern centre pivot irrigation system. Historically, Ubombo is a people-oriented company that offers attractive employment conditions, including high standard medical care for employees and their dependents. It was the first company to implement an HIV/ AIDS policy and a comprehensive system of primary health care. The company owns and manages a 40-bed hospital to serve employees and the Big Bend community. The Illovo Group runs a management trainee program and new recruits go through a structured development program, during which incumbents are equipped with skills in their disciplines of choice with senior managers as their mentors, prior to being placed in positions within the group. Quality, safety, health and environmental obligations are strictly observed and both the milling and agricultural divisions are accredited to ISO 9001:2000 and NOSA. These international systems are maintained though rigorous training with clear procedures and work instructions. The company owns and manages a 400- hectare game park and is a major partner in setting up a conservancy in the area. It is also the key supporter of a primary school and two high schools that are run by Swaziland Educational Project with subvention from the company. There is an employee home ownership scheme and a township has been declared in the area where some of the company houses will be sold with priority given to employees. This will empower them through ownership of immovable assets.
CITRUS FRUIT
Yields increased for the second year, improving by 21% to record 85,265 tonnes. Low rainfall helped to control diseases in the fruit and there were not losses through hail storms. However, the area under citrus declined slightly by .9% to 1,887 ha. Export earnings were up by 9.8% to reach E114.2 million due both to higher international prices and to the depreciated local currency. However, high oil prices added to transport costs. Although domestic sales were down by 14.4% 35,915 tonnes, receipts increased substantially. Domestic sales to Swazican for processing amounted to 41,951 MT. Prospect for 2008/9 are not encouraging due to prevailing weather conditions.
PINEAPPLES
This fruit is extensively grown in Swaziland with the bulk of production purchased and processed by Swazican for export markets. Ongoing increased demand for pineapples has resulted in a strategy to cultivate additional land to expand production.
MAIZE AND CEREALS
Production
Maize is the staple food of the Swazi people, and therefore the most important crop grown on nation land. It is often produced by small subsistence-farmers with little or no access to irrigation and production fluctuates depending on climatic conditions. In order to maximise self-sufficiency in food, maize production by local farmers is actively encouraged through events such as the National Maize Competition. While the Maguga Dam and the Lower Usutu Basin developments are expected to resolve the drought problem in the long term, the present situation continues remains one of shortages with imported maize used to supplement the locally grown crop. During the period under review, production increased by 24% to 83,090 tonnes with the area planted rising by 7.8%. However, production fell short of demand by 29.6% and the shortfall of 35.910 tonnes was imported mainly from South Africa. Further declines were expected and 2008 was marked by shortages of cereals, resulting in huge price increases at retail level. The wheat and maize price increased almost twofold, resulting in almost doubled bread, flour and mealie meal costs and placing severe strain on the less affluent sector of the population. A shortfall of at least 86,000 tonnes of maize is anticipated for the current period, placing further stress on an already beleaguered population. Some predictions indicate a much higher shortfall. The price of animal feed again rose sharply, creating a knock-on effect on overall food prices.
Sorghum production is encouraged as an alternative food source but output is low because most Swazis prefer other cereals. Rice production has been insignificant but it was announced that the Taiwanese Technical Mission is to inject E5 million into this sector in an effort to rehabilitate local production and reduce the 20,000 tonnes that are imported each year.
MILK PRODUCTION
All milk and dairy products in Swaziland are controlled by the Swaziland Dairy Board, which is a statutory body. The latest published figures indicated that annual demand for dairy products in terms of liquid milk equivalent is in excess of 56 million litres from and that commercial milk production from the national herd is about 8.4 million litres with shortfall of 48.2 million litres. The number of dairy farmers in the country has increased by 7.6% and the total herd increased by 6.7%. The shortfall is met by imports of raw, long-life and powdered milk. In the effort to achieve self-reliance in the long-term, The Swaziland Dairy Board trains and provides technical services and advice to dairy farmers and future prospects for the dairy industry are generally encouraging.
LIVESTOCK & POULTRY
Under the Livestock Development Policy, the commercialisation of cattle, poultry and pigs in particular, as well as of goats is being promoted in order to create employment in the rural areas. This initiative includes encouraging farmers to extend beyond rearing livestock and move on to the meat processing level.
Beef
Preliminary figures indicate that the cattle population has decreased by 2.8% to 639,718 animals. This is due to weather conditions and poor rangeland management. SNL farmers own about 80% of the national herd and the traditional belief that cattle represent wealth had previously hampered beef production, as well as caused serious problems of overgrazing and soil erosion. The government policy of commercialising the national herd, supported by Swaziland Meat Industries, who operate the country’s largest abattoir, has improved the situation. Farmers are increasingly selling their animals at the ideal age instead of keeping them long after they have lost their commercial value. The E20 million commercial feed lot at Mafutseni Ranch near Manzini, which can accommodate 9,000 head of cattle, together with an SMI partnership project involving communities, has had a positive impact. This entails SNL farmers selling their animals at the optimum age to feedlotters for fattening and for sale on to the abattoir. However, substantially increased animal feed prices have had a negative impact and the number of small feedlotters was reduced. Swaziland has a quota of 3,363 tonnes of boneless beef to the EU and of total production of 8,116 tonnes of beef in 2007/ 8, 834 tonnes with a value of E26.41 million went to this export market. Sales to the domestic market were valued at E7.3 million. The outlook for the EU market is positive.
Pork
The pork abattoir and processing plant at Simunye is owned by SMI and, together with other smaller producers, supplies the bulk of Swaziland’s pork requirements. Like beef, pork production is actively encouraged and, in conjunction with Simunye Pork, government has established small holder pig production schemes. Farmers are educated and assisted in all aspects of pig farming, including the ideal breeding stock to purchase, and the abattoir will purchase pigs for slaughter from these producers. The national pig breeding centre at Mphisi is addressing the shortages created by high demand for pork. Both fresh and processed pork products (such as bacon and sausages) are widely available in the country from local and imported sources. As with beef production, soaring feed prices is having a negative impact.
Poultry and Eggs
With encouragement from government and commercial operations, poultry production is one of the fastest growing agricultural subsectors, providing many income-generating opportunities. There are about 800 producers in the country, from small farmers working in cooperative groups to large concerns supplying around 20,000 chickens a week. Between them they grow 25,000 to 30,000 chickens a day to supply to the processors. The largest abattoir and processor supplies about 60% of the local requirement. Swaziland has become almost entirely self-sufficient in chickens. Legislation protects producers from imported competition and poultry import permits are granted only in special circumstances. This also prevents the dumping of surplus stock from South Africa. However, the majority of eggs for chick production are imported from South Africa, as are day-old chicks if local stocks become depleted. Egg production also continues to grow and local farmers of all sizes are producing quality eggs at competitive prices. The Swaziland Poultry Producers Association looks after the interests of this sector. Feed prices have increased quite considerably due to the shortage of maize caused by the drought and this has impacted on the retail prices of poultry and eggs.
COTTON
Despite government intensifying its campaign to promote it, cotton, which was previously a major crop in the country, has not performed well in recent years. Drought, lack of finance and low cotton prices, plus the absence of a ginnery (whereas there were previously two in the country), have all contributed to this. 2006/7 was the worse year ever with production falling to an all time low of 67,100 tonnes. However, the following year showed some improvement with the area under cotton increasing from 47 to 51 ha and production rising to 83,100 tonnes. It was also reported that Government was to buy back into a cotton ginnery and make it operational again. In addition, farmers are now receiving higher prices for their cotton: E4.00/ kg in 2008 and expected to rise to E4.50/kg in 2009. The expansion of the textile sector to include a weaving factory is likely to boost local production and world prices are expected to improve.
FORESTRY
Indications are that Swaziland’s forestry sector and related processing operations comprise around 20% of the country’s GDP and directly employ about 8,000 people. It also provides business opportunities for concerns that supply services such as forest management, fire fighting, transport, harvesting and other non-core activities. During 2007, devastating fires swept through many of the areas under trees, damaging about 80% of Peak Timbers forests in northern Wood pulp Swaziland and 7.5% of Sappi Usutu’s pine trees. Losses to Sappi alone are estimated at E24 million. Several species of non-indigenous trees, particularly various conifers and, to a lesser degree gum, are successfully grown in different parts of Swaziland and about 36% of the country’s area is under indigenous or man-made forests. Forestry provides raw materials for many value-added products, which between them account for a significant proportion of Swaziland’s export earnings. The Usutu Forest, which is under pine, is one of the largest man-made forests in the world, covering 66,000 hectares. These fastgrowing trees mature when they are between 15 and 20 years old, compared with 40 years in the Northern Hemisphere, and are used to produce unbleached kraft pulp (UBK) at Sappi Usutu. Despite the fire damage, UKP production at Sappi was up by 6% to 170,400 tonnes, with export volumes rising by 8.9% to 173,573 tonnes. Export earnings increased by 61.5% to E684.1 million due to world demand and the depreciated local currency. However, production is expected to decline in 2008 due to the impact of the forest fires. UBK comprises the bulk of forestry-related export earnings, although a number of estates grow trees from which different products are made for both local and export markets. These include mining and construction timber, doors, pallets, and coffins. Wooden furniture and shelving units are also manufactured, much of which is exported in “DIY” kit form. Other major forests in Swaziland are Peak Timbers and Swaziland Plantations in Northern Swaziland and Shiselweni Forestry in the southern highveld near Nhlangano that produce mining timber and eucalyptus oil for export. Wattle is also grown commercially. The Forest Policy and Legislation Project has resulted in the formulation of a Forest Policy and a National Forestry Action Program. They are designed to achieve sustainable forest management and other elements include awareness building, communications, training and education.
OTHER AGRICULTURE
Other agricultural activities undertaken in Swaziland include fruit such as avocados, bananas, grenadillas, guavas, mangoes and litchis, much of which are exported. Vegetables are grown for local consumption and baby vegetables continue to gain an increasingly significant share of the export market. Additional agricultural activities with potential for alleviating poverty in rural areas include fisheries, ostrich farming, goats, bee keeping and honey, mushroom production, popcorn, garlic and Macadamia nuts. These are either being developed or have been identified as viable. Bee producers suffered a serious setback due to the extensive forest fires that occurred during 2007. Tobacco production has become virtually negligible because of its poor marketability as a result of anti-smoking campaigns.
PROMOTING AGRICULTURE
All agricultural activities are actively encouraged in an effort to create job openings and to reduce dependence on imported foods. Some of these development projects, such as those for dairy, beef, pig and sugar cane farmers are outlined in the relevant sub-sections of this chapter. An ongoing project, which encourages young people to become involved in agriculture through the school curriculum, provides hands-on agricultural training covering many disciplines. Government employs field and extension staff based in rural areas to assist farmers with practical advice and the Malkerns Research Station operates a training centre at Luyengo near the university’s agricultural faculty and is also involved in agricultural research and development.
SERVICES, SUPPLIES, MACHINERY AND EQUIPMENT
Local outlets supply known brand inputs of international standard and are staffed by qualified personnel able to provide farmers with proper advice on what products to utilise and their correct application. These cover both crop and veterinary requirements. Agricultural machinery and implements of all types, including tractors and irrigation equipment are widely available although highly specialised plant and equipment has to be imported. Some specialised suppliers, such as seed companies and those involved in mechanised farming offer training facilities and also hold open days to assist and educate farmers. Feeds for livestock and poultry are produced in Swaziland as complete meal or, where farmers generate ingredients as by-products, in partial feed form, to be made up by the customer. Producers of animal feed sell their products in Swaziland and throughout Southern Africa.
LandMark Store
The new local LandMark store, conveniently
located at Matsapha Industrial Area, is a
one-stop shop for farmers offering everything
they need. The shelves of this modern outlet
carry the widest range of agricultural,
hardware and building requirements.
Although focusing largely on the needs of
farmers, anyone is welcome to shop at
LandMark, which stocks a wide range of
exciting products for camping and outdoor
activities, paints, tools, electrical fittings and
irrigation needs. Borehole and submersible
pumps are also available.
LandMark is an official distributer of
Arrowfeeds products, a locally processed
comprehensive range of animal feeds which
include chicken, pig and cattle feed of the
highest quality for optimum health.
Customers are encouraged to become
ClubCard members, whereby all purchases
are recorded and members are rewarded
with special gifts once they achieve 10,000
points. They also receive a 2% discount on
all purchases.
The dedicated and pro-active LandMark
team assists farmers to build successful
farming ventures with the wide range of
available products.