The government must take a decisive investment bet on Macadamia, particularly in the Eastern Cape, which is struggling to create jobs
Macadamia fields in Ncera village near East London. Picture MICHAEL PINYANA
Having seen the huge potential of macadamias as a lucrative agricultural commodity, a group of Eastern Cape-based emerging commercial farmers and a rural community got together 15 years ago to establish the Ncera macadamia project. This venture, along with the Amajingqi project in Willowvale, has enabled the Eastern Cape to join Limpopo, Mpumalanga, the Western Cape and KwaZulu-Natal as macadamia-producing provinces.
In a province afflicted with high unemployment and an exodus of citizens to other provinces, Ncera has demonstrated that land occupied by traditional leaders and their communities can be turned into productive assets that unlock investment, jobs and procurement opportunities for local suppliers. Yet there is a strong case for lenders to rethink their approach to financing macadamia production in the Eastern Cape. For starters, the projects are de-risked through emphasising land access for farmers, who are locked into long-term rental leases that provide certainty to both farmers and communities. Second, macadamia is a highly profitable high-end commodity export, generating a net profit of between R200,000 and R300,000 per hectare from mature plantations of 12 years and older.
The government needs to take a decisive investment bet on Macadamia, particularly in the Eastern Cape where the province’s economy is in a poor state and struggling to create jobs. In addition to providing infrastructure for plantations, government can come in as a guarantor of loans to reduce the risk for commercial lenders.
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