Retailing group Massmart launched its agriculture focused supplier development programme in Limpopo this week in what could turn around perception around the takeover of the local group by US giant Walmart.
The takeover of Massmart by Walmart last year was met with wide spread resistance at the back of concerns that it will come to destroy local jobs. The move was challenged by government and the trade unions. Walmart has in turn promised to ensure that local suppliers would not be marginalized.
The group show cased to the media its supplier development initiative called Ezemvelo Direct Farm Programme which is rolled out in partnership with the department of agriculture. The event was marked as a celebration of the first harvest on farms participating in the programme. This was the first of several to be rolled out throughout South Africa.
The launch was attended by agriculture minister Tina Joemat-Pettersson who was singing praises of the Walmart initiative thereby suggesting that the feud between government and the group was a thing of the past. “We thank Walmart for this initiative and encourage other retailing to follow,” said Joemat-Pettersson.
“The participation of the Department of Agriculture, Forestry and Fisheries in the Ezemvelo initiative should be viewed in light of our commitment to food security and the empowerment of smallholder farmers. Currently the drought in the United States of America has sent the whole world into panic, and South Africa has not been spared. The full impact of rising food costs is felt by the poorest among us, and to circumvent this situation, we have to start producing our own food. We are very inspired by the initiative and have decided to enter into an MOU with Massmart to cement our commitment to empowering our small holder farmers through assisting them with the necessary skills, providing them with markets and generally assisting with finance,” said Joemat-Pettersson.
Massmart’s executive responsible for the programme, Mncane Mthunzi, said: “The project in Limpopo Province is a significant milestone marking the launch of Massmart’s Ezemvelo Direct Farm Programme for South Africa. The farms in the Ofcolaco district will be the first to deliver fresh produce to our stores, including butternut and green beans that have been specifically grown for Massmart. It is encouraging to know that we are creating a demand pull that is incentivising participating smallholder farmers to place more land under production and to grow high demand fresh produce.”
Massmart said it hopes to attract over 1,500 black farmers to its supply chain in the next five years. The company will train, mentor and technically assist farmers, while helping them establish essential links to finance and retail. There are also plans to invest in a pack-house to aggregate fresh produce from all of the smallholder farms that will supply the group.
“Our Ezemvelo Direct Farm Programme will be rolled out on a national scale, intersecting with those areas of the country where there are concentrations of smallholder farmers who have the potential to grow fresh produce and to be integrated into commercial markets. Limpopo was a ready fit for the launch of the programme. Farmers in Limpopo were already well structured to fit into an aggregating model. Very importantly the climate here gives them an opportunity to farm vegetables even in the colder winter months,” said Mthunzi.
The initiative forms part of a R15 million three-year supplier development deal between Massmart and TechnoServe SA, an NGO involved with entrepreneurship and agricultural development. The deal came as a result of the creation of a R100-million supplier development fund aimed at improving the competitiveness of South African manufacturers and producers as part of the Massmart-Walmart transaction. While the fund itself is under review by the Competition Appeal Court, the initiative will go on regardless, in accordance with Massmart’s plans to create jobs and enhance food security.