SWAZILAND BUSINESS YEAR BOOK 2002
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.
agricultural sector, which may be divided into the formal and informal,
or traditional sub-sectors, is the source of income for the majority of
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.
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
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
Mhlume Sugar Company
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.
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.
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.
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.
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.
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.
MAIZE AND CEREALS
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.
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 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
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.
Poultry and Eggs
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.
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 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.
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.
MACHINERY AND EQUIPMENT
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.