Government urged to prevent KZN tea estate from collapsing
A presentation to a recent agriculture portfolio committee meeting held at Tugela Ferry painted a bleak picture of the project, which has already been in the news for all the wrong reasons.
According to the report, the entity, which was founded in 1987, had been operating at a loss and has not generated any income for the past three years, despite investment of more than R150million.
Opposition parties have blamed the Department of Agriculture and Rural Development for its alleged failure of the people of Nkandla.
Ithala Development Finance Corporation initiated the project at the request of the provincial economic planning committee to facilitate socio-economic development in Nkandla.
“The operations of the estate collapsed to the extent that for the last three years tea was not harvested and no income was generated. Furthermore, the estate manager resigned, which left the facility without leadership and management to provide direction and to ensure that it was operational,” the presentation read.
“The current funding model is not sustainable - the cost of producing tea is far higher than the price offered by agents. The payment model for farm and seasonal workers need (sic) to be reviewed.”
A Cabinet resolution saw Ithala’s 32% share in the estate being transferred to the department on April1 this year, giving it 100% ownership. And according to the report, the department appointed the Agribusiness Development Agency to provide management support services and strategic leadership.
A budget of R7.5million was available for estate operations for the 2019/20 financial year.
Chris Pappas, a DA portfolio committee member, said a public-private partnership entered into through a fair tendering process could save the estate.
“This partnership must aim to make the entity sustainable and not reliant on government funding. The partnership must draw on the expertise of the private sector, while also developing emerging farmers. The partnership must protect workers from exploitation,” Pappas said.
The Estate consists of about 400 hectares of clonal tea and could produce high quality black and green tea with a packing/processing factory and about 600 permanent and seasonal workers. Pappas said the department should support farmers to grow their own tea to sell to the Ntingwe tea processing factory.
AgriSA deputy executive director, Christo van der Rheede, said farming was challenging.
“You can’t take just anybody and expect them to be good farmers overnight. People now make decisions based on political agendas, hence even projects with potential end up failing,” he said.
IFP portfolio committee member, Nhlanhla Msimango, said the estate was the main source of employment for the community.
“The problem is that the project has no market and the only way to survive is to sell its produce at a very low price. The department is to blame for this because it doesn’t market the product,” Msimango said.
Departmental spokesperson Mack Makhathini said a turnaround strategy for the project had been finalised for the 2019/20 financial year. He said the strategy involved the socio-economic development of surrounding areas.