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Opinion; Hubs aim to bring growth to rural enterprise

By Mlibo Qoboshiyane - Dec 15, 2014
Opinion; Hubs aim to bring growth to rural enterprise

Like other mining labour contributing provinces, the Eastern Cape still deals with underdevelopment, poverty and low rural economic activity which affects jobs and hurts efforts to ensure sustainable livelihoods.

It is inherent in such a situation to have people flocking to big cities to search for jobs while others are hard hit by poverty in their homes, sending them to work as domestic workers and gardeners just to provide for their families.

Noting this hardship, the National Development Plan (NDP) says a sustainable increase in employment will require a faster-growing economy and the removal of structural impediments, such as poor quality education or spatial settlement patterns that exclude the majority. Calling on business, labour, communities and government to work together to achieve faster economic growth, the NDP says this is essential to achieve higher rates of investment, competitiveness, expanding production and exports.

In this regard and pursuant to the African National Congress’s rural development policies and programme, we started four Rural Enterprise Development (RED) hubs in our province to address these challenges.

The programme is the government’s key rural development approach driven by the Eastern Cape Rural Development Agency. It supports local secondary co-operatives with access to finance, inputs, technical support, mechanisation, storage to produce, process, package and sell commodities to retail markets for the benefit of all member co-operatives.

Ncorha, Mqanduli and Mbizana are the only RED hubs that are operational, with Lady Frere to start next year.

Our funding model sees the government, through the agency, invest the full costs of the hub in the first year. In the second, co-operatives contribute 25%, with the government putting in the remaining 75% as a loan for crop production. In the third year the government and the co-operative each puts in 50%, with the government’s contribution dropping to 25% in the fourth year ahead of disengagement in the fifth year.

In their first phase, RED hubs will focus on primary grain production on 1,000ha. Our premise is that rural communities must be organised into co-operatives and make use of their land and livestock to contribute to the RED hubs.

State support ensures capacity to all the co-operatives involved so that they run primary and secondary co-operatives profitably. Each member has a responsibility to safeguard its assets, from mealie fields to milling plants and the implements the government buys.

The aim is to grow the programme to cover at least 11 areas. The big plan is that the hubs will diversify their production to include other commodities such as red meat, poultry and dairy.

We have the resources to help our people. We appeal to each community wanting to join this programme to be united behind its success and not to fight each other. We must use our energy to fight poverty and create jobs and sustainable business opportunities for local small businesses.

Each hub will have a store selling all the products processed from the hub to the local market. We can also supply mainstream outlets with our products but also supply other brands with maize, super maize meal, samp and mealie rice for them to package.

This does not close an opportunity for entrepreneurs who might want to start their own brands using stock from the hubs. They could do most of the production and sell finished quality products to entrepreneurs ready for the market.

The hubs are not just government-funded projects. We would like to discourage that mentality. These are state-and cooperative-funded commercial business ventures with communities playing a major role in the entire value chain. We don’t just give funds to cooperatives; we work with them for five years, giving support until they are self-sustainable.

Given our historic love for agriculture, we will use the hubs to create thriving rural industries, create jobs, business opportunities to end poverty, underdevelopment and hunger in rural areas.

We want to work with all those interested. Real economic development doesn’t happen only on the JSE or international markets. It starts on the mealie fields and RED hubs in rural areas. They are as important as any other workplace. We must use the land, livestock and other resources to transform our society.

Photo caption: Eastern Cape Rural Development and Agrarian Reform MEC, Mlibo Qoboshiyane.