AGRICULTURE
SWAZILAND BUSINESS YEAR BOOK 2002


Swaziland's diverse agricultural activities include sugar, citrus fruit, maize and other crops, cotton, forestry and livestock. The sector is a major export earner and contributed 10.4% of the GDP in 1999/2000. It is also a key supplier to many of the country's manufacturing industries, particularly operations which utilise sugar and wood.

Self-sufficiency in basic foodstuff production continues to be a national objective which is encouraged and pursued by government with due consideration to conservation and the development of water and soil resources.

Swaziland's agricultural sector, which may be divided into the formal and informal, or traditional sub-sectors, is the source of income for the majority of people.
Overall output increased by 2.2% following a decline of 3.5% the previous year.

Traditional Farming
Swazi Nation Land (SNL) is acquired in terms of traditional law and custom, and agricultural activities in these areas are often carried out by subsistence farmers although sustained efforts are in hand to encourage SNL farmers to perform on a more commercial basis. Small cane growers, for example, produce commercially on SNL with the Swaziland Sugar Association and the major sugar estates playing a fundamental role in assisting them. Small farmers provide a certain proportion of maize, the staple food, and production increased by 10.7% during the year.
The livestock sub-sector is also becoming more commercial, receiving assistance and advice from Swaziland Meat Industries and government.

These farmers rely heavily on rainfall as access to irrigation is limited, although the Ministry of Agriculture is involved in developing water resources for small scale irrigation. The Maguga Dam project in northern Swaziland, which is due for completion in 2006, will benefit about 20,000 people through sugar cane production on 7,400 ha. of irrigated land. Through another development, the Usutu River basin project in southern Swaziland, it is hoped to develop 25,000 ha. of land for exclusive use by small farmers.

The slow but steady move away from more traditional methods continues although environmental damage from over-grazing remains cause for concern. Better animal husbandry, health and feeding practices are enabling this sector to develop and expand.

Formal Agriculture
This category includes the large sugar and citrus estates, forestry and other undertakings on individual tenure farms (ITFs) which generate foreign exchange earnings. Swaziland Meat Industries exports beef to EU countries under a quota arrangement and to other markets, while Swazican exports most of the pineapples and citrus it processes. Formal agriculture also covers meat and poultry production, dairy farming, and fruit and vegetable growing for mostly local consumption.
During the year overall output increased by 6.3% against a previous decline of 1.5%.

SUGAR

The total annual production of sugar is about 530,000 tonnes, which forms more than half the country's agricultural output. This is derived from the cultivation of some 43,500 ha of sugarcane which is milled at the country's three sugar mills in Big Bend, Mhlume and Simunye. Established in 1958, the sugar industry now contributes 18% of national output, 16% of private sector wage employment and 11% of national wage employment. Total sugar sales over the period 2000/1 were 552,387 tonnes and the total molasses sales amounted to 160,769 tonnes. Increased sugar production is anticipated following the completion of the Maguga Dam which was expected to start operating at the end of 2001.

Because Swaziland has a small, open economy, it is highly susceptible to developments elsewhere in the world, which have direct and indirect implications for the sugar industry. South Africa is Swaziland's largest trading partner, which makes her economic growth dependent on trends in that country. The acceleration of South Africa's growth over the last two years has been positive for the local sugar industry as it has resulted in the expansion of the SACU market.

Following the launch of the Euro in January 1999, the contracts for the EU-ACP Sugar Protocol and Special Preferential Sugar (SPS) were converted into Euro. When it weakened slightly against the Rand later that year, Swaziland experienced a reduction in sugar export earnings in Emalangeni terms. Another threat to the industry is the introduction by the EU of the 'everything but arms' initiative, under which, among other thing, sugar from least developed countries will enter the EU market duty-free from 2007. From 2001/2, an interim duty-free sugar quota for such countries will be introduced, starting with 74,184 tonnes and rising by 15% annually. This implies SPS losses for Swaziland and other ACP countries.

The SADC Sugar Cooperation Agreement was concluded in July 2000 and has been annexed to the SADC Protocol on Trade. The agreement has two components - market access and areas of cooperation. The long-term objective of this agreement is the reciprocal full liberalisation of the SADC sugar sector, where there will be no barriers of any kind.

The Swaziland Sugar Association
The SSA was formed in 1964 as an institution responsible for performing the services necessary for the general development of the industry and the marketing of Swaziland's sugar in particular. This was with a view to ensuring optimum returns on investment for existing and future producers. The local sugar industry derives its structure from the Sugar Act of 19967. Millers and growers belong to the Sugar Millers Association and the Cane Growers Association which are of equal status and represented as such on the Council of the Sugar Association, which is the highest policy making body in the sugar industry.

SSA also provides technical services to assist the industry raise operational efficiencies, especially at the field level. This includes assisting smallholder can growers working on Swaziland national 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 9001/2000. This is a quality management system designed to place operations at a systematic and consistent level.

The Sugar Estates
Sugar projects in Swaziland comprise several hundred small farmers as well as the large estates. The major estates are Mhlume, Simunye, and Ubombo Sugar which also operate the country's three mills. These and a number of other key operations, such as Tambankulu, Crookes and Big Bend, produce most of Swaziland's sugar under irrigated conditions in the lowveld. The large estates, as well as the Sugar Association, are instrumental in assisting smallholder farmers with advice and expertise.

Mhlume Sugar Company
The estate and mill, founded in 1958, are jointly owned by CDC Group plc and Tibiyo Taka Ngwane, the latter in trust for the Swazi nation. Discussions which began in 1999 to merge Mhlume with the Royal Swaziland Sugar Corporation had almost been concluded at time of writing. It is envisaged that there will be substantial benefits from the merger through reduced capital expenditure and optimal utilisation of the capacities of both factories when additional cane from the Maguga Dam development materialises over the next few years.

The Mhlume mill was commissioned in 1960 with a crushing capacity of 90 tonnes cane per hour (tch), since when there have been four expansion programmes, the last of which is currently in progress. The third expansion involved E81 million for the construction of the 20-tonnes per hour (tph), 90,000 tonne capacity refinery during 1995/6, which was officially opened by His Majesty King Mswati III in August 1999. This is of major strategic importance to the industry, enabling it to double refined sugar production and thus meet the objective of reducing world market sales and increasing its share of local and regional market demand for value-added sugar.
Three separate but associated projects were developed at the same time: a 100 tonne p/h steam boiler able to handle the extra steam power needs of refining, a sugar conditioning tower and a bagged warehouse of 14,000 sq.m under one roof, which is one of the largest in Swaziland.

The takeover of IYSIS in 1994 expanded Mhlume's growing area to over 9,000 ha, making it the country's second largest sugar cane grower. The company's estates supply two-thirds of the cane which feeds the mill, with the balance coming from several medium sized and some 320 small holder out-growers.

A business development plan initiated in 1998 will take Mhlume six years into the new millennium. This comprises a phased factory programme of routine replacement and expansion which will ultimately increase nominal capacity from the current 300 tch to 480 tch. This will enable the factory to handle the expected increase of up to 60% cane tonnage from developments downstream of the Maguga Dam. Completed projects under this program include a power station and related items; an ash dam and a boiler feedwater station. Together they represent investment of almost E54 million. The other component of the plan is to reinforce company support for out-grower developments to ensure greater cane supply and maintain quality.

well-established safety, health and environmental policy aims to provide safe and healthy working conditions, safeguard all those affected by the operation and ensure the maintenance of a clean and healthy environment.

hlume means "Good Growth" in siSwati and the company lives up to its name by always looking to improve operations and maintain competitiveness, while being conscious of its obligation to help surrounding communities grow with it. Mhlume has played a major role in the development of several small farmer projects in the area totalling 140 ha. and the successful Nykatfo pilot project (200 ha), which has demonstrated the viability of agricultural developments downstream of the Maguga Dam.

Environmental preservation forms part of Mhlume's philosophy and E12.7 million, including the ash dam, has been invested in a programme to reduce smoke emissions from the factory. All the new developments conform with Swaziland Environmental Authority standards.

The majority of senior positions at Mhlume are held by Swazi nationals and of the 2,000 people employed only 22 were expatriates at September 2001, which includes eight educational and two health care staff.

Employee benefits comprise a high standard of housing; subsidised health care at a small hospital run by two doctors and qualified nursing staff. There is a wide range of recreational facilities, and sponsorship of cultural and sporting activities. This includes a substantial package, now in its fifth year, for the Mhlume United football club. First class subsidised education is provided at three primary schools and a high school managed by the company. Mhlume is also founder member and a major stakeholder of Mananga College, a private high school which opened in January 1999. In 2000 the company made a contribution of E0.25 million to the University of Swaziland towards the expansion of the Institute of Distance Education, to bring university education within the reach of more students.

Ubombo Sugar
Previously known as Ubombo Ranches, this company changed its name and adopted a new corporate image during 1999 following the purchase of the Lonrho shares by the South African Illovo Sugar Group. With this change of ownership, Ubombo became a member of one of the largest cane growing and milling groups in the region.

Sugar was first produced in the Big Bend area in 1958, marking the beginning of the country's industry. Initially processed at a small mill on the north bank of the Usutu River, production has taken place at the present Ubombo mill site since 1960.
The various expansions have resulted in the development of 1,193 ha. of land under 19 centre pivots. The current mill capacity is 400 tonnes of cane crushed per hour. The mill process some 2 million tonnes of cane, of which 950,000 tonnes is from Ubombo's own estate and the balance from other growers. In the 2000/01 season, 204,348 tonnes of sugar was produced of which 84,540 was refined.

 

As well as managing its own estates, Ubombo Sugar is committed to assisting and encouraging small growers, and employs two senior staff members at Maphobeni and other adjoining Swazi nation land specifically to support their development. The company has also developed and manages some 2,360 hectares of irrigated sugar cane on behalf of the nation through Tibiyo Taka Ngwane. Of this land, 483 ha. is under eight centre pivots.

Traditionally, Ubombo is a people-oriented organisation and offers attractive employment conditions, including a high standard of medical care. It was the first company in Swaziland to implement a specific AIDS policy and a comprehensive system of primary health care is in place throughout the estate. A modern 40 bed hospital serves employees and the Big Bend community.
The company also runs a 400 hectare game park and has joined other land owners in setting up a conservancy in the area as a contribution to the preservation of the country's natural and cultural heritage.

Ubombo has invested in two pre-schools, a primary school and a high school which operate from the estate and has an outreach programme for adult education.
Ubombo Sugar also assists employees through a home ownership scheme and operates Business Improvement and Business Understanding Programmes. In its bid to empower Swazis, the company has sold a portion of its land, known as Poortzicht Farm, to develop and encourage middle scale cane farmers. The farms range from 30 to 36 ha in size and early indications are that they are doing well.

CITRUS FRUIT

Citrus fruit, which is produced on seven large estates located mainly in the eastern lowveld, is one of Swaziland's main export commodities. The major buyers are European countries, Japan and South Africa. Despite a slight increase in the area under cultivation, production during the year was down from 109,186 tonnes (revised figure) to 100,977 tonnes due to climatic factors. Although
export volumes were down by 2.4%, from 51,526 tonnes to 50,287 tonnes export receipts were up by 11.6% from E81.1 million to E90.5 million. As international prices were depressed, this can be attributed to the depreciation of the local currency.


Domestic sales, mostly fruit for processing at Swazican, were up by 9% from 55,341 tonnes to 60,316 tonnes.
The Swaziland Citrus Board takes care of the growers' interests and is the channel through which the fruit is exported to the various markets.

PINEAPPLES

The great majority of the pineapples grown in the country are processed at Swazican for export markets with a small amount consumed locally. There was an increase in demand for pineapples and a strategy has been adopted to cultivate an additional 120 hectares each year. Swazican provides assistance to small growers with the objective of meeting a target of 25,000 tonnes a year.

MAIZE AND CEREALS

The National Maize Corporation
The Corporation was established in 1985 with the objectives of guaranteeing a market to maize farmers at competitive prices and of providing high quality, reasonably priced maize meal to the people. The Corporation is wholly owned by Government under the Ministry of Agriculture and is involved only with the purchase, storage and marketing of maize.

Local purchases by the National Maize Corporation increased from 8,200 tonnes in 1985 to as high as 28,500 tonnes in 1991 and 20,000 tonnes in 1996. It was only during the drought year of 1992 that purchases dropped to an all time low of 4,000 tonnes. However, it is clear that in years of good rain, Swaziland's farmers are capable of supplying the bulk of NMC's maize. In an effort to further encourage maize growing, the NMC set aside E2 million, which is managed by the Enterprise Trust Fund, to assist growers and towards the end of 2001, 150 farmers had benefitted from the investment.

The corporation actively stimulates and promotes commercial maize production by improving the domestic marketing system and infrastructure. It is a buyer of last resort and will always purchase the crop if farmers fail to sell to other outlets. The decentralisation of the purchasing function and rehabilitation of the regional silos has reduced growers' marketing and transport costs and two bins installed at Matsapha during 2000 have increased the overall silo capacity to 23,500 tonnes. Maize dryers at KaLanga, Madulini and Ntfonjeni eliminate the need to take high-moisture maize to Matsapha.

The minimum producer price remained at E750/tonne for the 2001/02 marketing year and producer prices fluctuate in response to market forces. However, buyers may offer a higher rate than the gazetted price.
The corporation encourages maize growing by farmers with events such as Maize Open Days where they can come together and share experiences.
At time of writing, the NMC had applied for a licence to invest in a milling plant in partnership with farmers and this is to be considered following the formulation by government of a maize marketing policy.

Cereal Production
Because maize is the staple food of the Swazi people, it is the most important crop on nation land and is often grown by small subsistence farmers who have no access to irrigation. Thus production fluctuates steeply depending on climatic conditions. Maize growing by local farmers is actively encouraged with promotions such as the National Maize Competition.

During recent years production has been negatively affected by the crop's dependence on rainfall. However, the Maguga Dam and later the Lower Usutu Basin development should solve this problem.

During 2000/1 the National Maize Corporation imported 34,500 tonnes of maize, an increase of 39.2% over the previous year's 24,793 tonnes. Local production was 72,500 tonnes, about 35% less than anticipated.

Despite being an ideal crop for the drier areas of the country, sorghum production has been declining and the area under cultivation is a negligible 150 ha. The decline is attributed to the fact that most Swazis prefer other cereals, despite efforts to cultivate and consume it as an alternative food source.

Rice production was insignificant, despite earlier efforts to encourage farmers to grow this crop, and financial and technical support from Chinese Technical Mission has been withdrawn.

Although wheat is not widely grown in the country, the Malkerns Research Station and Ngwane Mills have established its viability as a rotational crop on irrigated land during the dry season but while there is potential for small scale commercial growing, farmers are reluctant to produce this crop.
The country's total cereal requirement for 2001/2 is 219,500 tonnes and as domestic availability is only 85,500 tonnes, about 134,100 tonnes will have to be imported to make good the shortfall.

MILK PRODUCTION

Swaziland Dairy Board
the Swaziland Dairy Board, a public enterprise owned by Government, was established in 1971 under the Dairy Act No. 28 of 1968. Following the completion of the restructuring of its activities in 1999, the primary function of the Board became developmental and regulatory with no involvement in commercial activities.

The Board relocated to Manzini city in rented offices at Liqhaga House and began operating in August 1999 as the Swaziland Dairy Development Board (SDDB), marking the beginning of the restructured organisation. SDDB is mandated to provide developmental and regulatory services to the dairy industry in a supportive socio-economic environment and from a neutral position.

The word 'development' is included in the name of the organisation to emphasise the shift from its former commercial activities to the development function, which was not given the importance and attention it merited under the previous Board.

The development of the dairy industry is aimed at promoting local milk production, processing and distribution, especially by small holder dairy farmers; investment in all phases of the industry; free market access, and general improvement of the sub-sector's commercial climate for the benefit of consumers.

The Board also encourages investment in order to achieve a sustainable level of self-reliance in the supply of dairy products, and to foster competition and free market access by regulating the level of import and export of dairy products based on the principle of supply and demand.

The SDDB is also expected to coordinate, harmonise and, where necessary, regulate the activities of all stakeholders in the cost-effective manner and to ensure efficiency in milk production, processing and the distribution of dairy products in the local market. It further controls the statutory activities of producers, processors and distributors. The overall objective is to achieve and maintain food security in dairy products.

The SDDB protects the interests of consumers by enforcing minimum public health and quality standards, and ensuring the products are correctly labelled for accurate information. The Board also looks after producers through loan schemes and various support services, such as advice to farmers, the provision of credit, project appraisal, milk collection centres and other infrastructure.

During 1999/2000 the effective demand for dairy products was 63.9 million litres in liquid milk equivalents (LME), while milk production from the local dairy herd was about 11.54 million litres. The deficit of 52.36 million litres was covered by imports of dairy products and milk form other local sources. Future prospects for local milk production are good following the deregulation of dairy product prices, which is expected to be an incentive to local farmers and other key players in the industry.

LIVESTOCK & POULTRY

Beef
Cattle comprise the largest component of Swaziland's livestock population. The traditional belief that they represent wealth has hampered beef production and caused serious problems of overgrazing and soil erosion, necessitating a government policy to commercialise the national herd, supported by Swaziland Meat Industries who run the EU standard abattoir. Thus more farmers are selling their animals at the ideal age instead of keeping them long after they have lost their commercial value.
During 2000/01 the cattle population increased slightly from an estimated 601,593 to 610,595 head of cattle, of which about 80% are owned by SNL farmers.

Commercial slaughters were up by 25.3% to 47,716 and the number of cattle processed by SMI rose by 16.6% to 30,769. This indicates that vigorous marketing strategies are having a positive effect. Exports to the EU therefore increased by over 50% to 665 tonnes while total exports were up from 1,191 tonnes to 1,247 tonnes. Exports receipts were E19.1 million compared with E17.3 million the previous year.
An outbreak of foot and mouth disease during 2001 had an adverse affect on the sector's performance and figures for 2001/2 are expected to show a decline.

Pork
The pork abattoir and processing plant at Simunye is owned by SMI and supplies the bulk of Swaziland's pork requirements, together with a number of smaller producers. Like beef, pork production is actively encouraged and significant steps have been taken by government, in conjunction with Simunye Pork, to help with the establishment of small holder pig production schemes. The E1 million investment in a piggery at Mpisi Government Farm is an example of this. 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. Both fresh and processed pork products are widely available.

Poultry and Eggs
Until a decade ago, the poultry market was almost completely dominated by South Africa. Today, with encouragement from government and commercial operations, it is one of the fastest growing agricultural sub-sectors, providing many income-generating opportunities. There are about 800 producers in the country, including small farmers working in cooperative groups to large concerns supplying around 20,000 chickens a week. The largest abattoir and processor supplies about 80,000 chickens a week - about 60% of the local requirement and in just four years up to 2000, Swaziland became self-sufficient in chickens.

Legislation provides producers with protection from imported competition and import permits are granted only in special circumstances. This also prevents the dumping of surplus stock from South Africa.

Egg production is also growing and local farmers are increasingly producing quality eggs at competitive prices.
The interests of the industry are looked after by the Swaziland Poultry Producers Association.

COTTON

Following the trend of the last few years where the area of land under cotton was increasing, unfavourable weather conditions caused a reversal of this and during the year under review the area reduced by 18% to 28,279 ha, while the number of farmers was down from 10,000 to 6,000. Production significantly decreased by 50% to 7,502 tonnes from 14,918 with serious losses sustained through pests. Other negative trends involved finance as farmers were unable to service their debts to the Cotton Board and the ginnery.

Cotton is another crop which is likely to benefit from the Lower Usutu basin project and the restructured SwaziBank will also be a source of relief for farmers.
The monopoly implications of having only one ginnery in the country are negated as cotton prices are dictated by external influences.

FORESTRY

Many species of non-indigenous trees, particularly various conifers and, to a lesser degree gum, are successfully grown in different parts of Swaziland for use in commercial ventures. About 36% of the country's area is under indigenous or man-made forests and this sector accounts for about 17% of formal employment (8,000 jobs) and 15% of the GDP (E650 million per annum). Forestry provides raw materials for many value added products which between them account for a significant proportion of Swaziland's export commodities.

The pine growing Usutu Forest is one of the largest man-made forests in the world covering 66,000 hectares. These fast-growing trees are used to make unbleached kraft pulp (UBK) and mature when they are between 15 and 20 years old, compared with 40 years in the Northern hemisphere.
While UBK comprises the bulk of forestry-related export earnings, 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 and 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 which produces mining timber and eucalyptus oil for export.
The Forest Policy and Legislation Project, a two-phase government funded development which ran from 1998 to 2001, resulted in the formulation of a Forest Policy and a National Forestry Action Program which are designed to achieve sustainable forest management. Other elements include awareness building, communications, training and education.

OTHER AGRICULTURE

Further agricultural activities in Swaziland include fruit such as avocados, bananas, grenadillas, guavas, mangoes and litchis, much of which are exported. Vegetables are grown for local consumption although large quantities have to be imported from South Africa.
Tobacco is grown although production has steadily dropped - a result of doubts about its long-term marketability due to intensified anti-smoking campaigns.
Other agricultural activities with high potential include fisheries, ostrich farming, bee keeping, mushroom production and Macadamia nuts.
A new project in the pipeline was the possible acquisition by Government of a fruit and vegetable drying plant for the Malkerns Research Station.

PROMOTING AGRICULTURE

All agricultural activities are actively encouraged in an effort to create job openings and to reduce dependence on imported foods. Many of these development projects, such as those for dairy, beef, pig and sugar cane farmers are outlined in the appropriate sub-sections of this chapter. An ongoing project to help young people become involved in agriculture through the school curriculum provides for hands-on agricultural training covering many disciplines.
Government employs field and extension staff who are based in rural areas to assist farmers with practical advice. 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.

INPUTS, 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.
See also Feedmaster page 59.