Money makes the world go round – African Farming

Trading off the back of his bakkie in the former homeland of Ciskei taught Aviwe Gxotiwe to respect the work ethic and business skills of immigrant Somali and Pakistani businesspeople. Today he applies the same principles in his own business – the 2 300ha lucerne and sheep farm Soutvleij in the Somerset East district of the Eastern Cape.

Access to money: that’s what makes the world go round. It was a lesson a young Aviwe Gxotiwe learnt on his lonely trips through former Ciskei in 2008, hawking farm produces off the back of his bakkie. If one couldn’t access money, you simply could not grow, no matter whether you were a poor communal farmer in the former homelands or, like him, the son of a farmer who did own land.

Aviwe’s father, Harry, had been farming the 160ha Tyhume citrus farm near Alice in former Ciskei since the late 1980s. Here Aviwe grew up and developed his love of farming before attending junior school at St Andrew’s Preparatory School in Grahamstown and finishing high school at Queen’s College in Queenstown.

The Gxotiwe’s family farm used to belong to the Ciskei parastatal Ulimocor, where Harry started work as a packhouse manager in 1989. When Ciskei was reintegrated into the Republic, Harry negotiated the purchase of the property, but never received the title deed due to debt owed by the farm’s previous owners. That left Harry with an asset he’d never be able to leverage as collateral to raise money.

It was a reality that would have a profound impact on the direction his son Aviwe’s farming career would take. Cash starved, Harry was forced in 2010 to start phasing out the potentially lucrative citrus orchards and start experimenting with less lucrative options like vegetables and livestock. With the help of John Schenk, owner of a local timber business, Harry bought some indigenous goats and Nguni cattle, but his small farm, wedged between sprawling communal areas, was limited in what it could produce.

By the time Aviwe returned to the farm in 2008, after studying law at the university of the Free State, father and son soon discovered the sums just didn’t add up. The farm wasn’t large enough for them both, so they decided Aviwe would generate an extra income until more land could be found. So Aviwe started trading in the surrounding towns, villages and rural lalis of the former homelands.

TRADING LESSONS

For the next three years Aviwe criss-crossed the former Ciskei, selling firewood, vegetables and milk he sourced from a dairy in the Hogsback area from the back of his farm bakkie. It was a tough but rewarding experience that helped him cut his teeth as an entrepreneur.

The hardworking immigrant traders made a big impression on him during that time. “Being a trader myself, I knew how hard it was for Somali and Pakistani traders to turn a profit,” he explains. One of the important lessons. Aviwe learnt was how demanding poor customers could be. “Poor people must make every cent count. They can’t afford to buy poor-quality goods.”

In 2012 the breakthrough the Gxotiwes had been hoping for, came. The 2 300ha farm Soutvleij in Somerset East became available for lease, complete with irrigation rights out of the Fish River. Previously earmarked for a sugarbeet biofuel project under the Eastern Cape Rural Development Agency that never got off the ground, and Harry realised this was the opportunity he had been waiting for.

The farm was officially awarded to the Gxotiwes in 2013 under a 30-year lease agreement through the state’s Proactive Land Acquisition Strategy (PLAS) land-reform programme. The new farm didn’t come without its problems, however. There was no fencing, the centre-pivot irrigation system had been damaged, and the home and outbuildings had been stripped of all taps and fittings.

There also was an outstanding Eskom bill of R200 000. Fortunately, Harry managed to secure R700 000 emergency funding from the department of agriculture to cover most of the outstanding bills and wages, and to maintain whatever crops were standing on the lands.

Aviwe then briefly returned to the University of the Free State to help with a racial-integration programme he had helped initiate during his studies. That’s where he met Leanne, whom he married the following year, before they moved to Soutvleij so Aviwe could help develop the farm.

Continuing to trade in the communal areas around Alice to support his young family, Aviwe eventually started sub-leasing Soutvleij farm from Harry, who then returned to their land in Alice, where he still lives and farms.

A FULLY-FLEDGED FARM

Today Soutvleij sports 150ha under irrigation and employs a full-time staff of 12. The 100ha of irrigated lucerne is baled and sold to local dairy farmers, whereas some is retained for Aviwe’s own flock of 2 000 merino wool sheep. Fifty hectares of lucerne pastures are also kept aside for grazing.

Aviwe sells his lambs to OVK, and BKB handles his wool. Always on the lookout for an opportunity, Aviwe planted chicory in 2017, when cheap imports were hurting the industry and many growers were closing shop. He applied for a loan, and planted and harvested a bumper crop that won him the Chicory Farmer of Year award for 2018. The following year he went back to planting lucerne to feed his growing flock of sheep. Like most farmers, Aviwe battled to securefinancing.

By late 2014, he had managed to secure a R250 000 loan from the Humansdorp Co-op and Land Bank, and another R240 000 from the Eastern Cape Department of Rural Development and Agrarian Reform (DRDAR). This allowed him to plant 30ha maize, achieving a yield of 5t/h. The crop was used in the province’s food-security programme.

In 2016 he again secured a R400 000 loan from the Humansdorp Co-op and Land Bank, this time to establish 30ha lucerne under irrigation, and another R160 000 from the DRDAR to plant 20ha maize, which also went

to the state’s food-security programme. It was his relationship with the Humansdorp Co-op, especially, along with his inability to access the state’s recapitalisation funds, that would prove significant for the young farmer.
The Humansdorp Co-op is very involved in various projects with black farmers across the province – from the citrus industry to the communal areas – and Aviwe started talking to them about a possible investment.

Up until then, the repeated loans the Humansdorp Coop had granted him were simply paid back from the profits of every year’s harvests – but bringing the agribusiness on board as a 50% joint-venture partner would give him access to the implements, seed and animal-health products he needed to grow.

BUSINESS FOCUS

Once the partnership with the Humansdorp Co-op was concluded, Aviwe had access to the best advice and technology. The decision was made to focus on mutton, wool, and lucerne to supply the many dairy farmers along the Fish River. The 55-year-old Bertus van Vuuren from the Free State was hired as farm manager to help free up Aviwe.

“I found that for us to grow, I needed to work a lot more on the business than in it,” Aviwe points out. This approach seems to be paying off: currently Aviwe is busy with an environmental impact study to develop another 150ha of irrigation for either lucerne or pecan nuts.
Bertus says the change has been exciting.

“We’re like a big family here on Soutvleij. The age difference between Aviwe and myself is not important. What’s important is that we respect each other. When there are disagreements, we handle them in an adult way. It’s important to communicate and look at the pros and cons of everyone’s opinion

We then make a decision that’s in the best interests of Soutvleij farming.” Harry, who remains involved in the farm in an advisory capacity, is proud of his son. “Aviwe has changed a lot in a short space of time,” he explains.

“He understands that it is a business and that he has a responsibility to create employment and to reinvest in the farm continually.” Like any father-son relationship, some friction is inevitable. “We do bump heads,” Harry laughs. “Often it’s not because he’s stubborn, but because I’m a little old-school!”

RECIPE FOR SUCCESS

Aviwe credits his success to three generations of Gxotiwes making sound and, at times, difficult decisions. “My grandfather was a farm labourer but wanted a better future for his children,” he says. “He made the huge sacrifice of spending his savings on sending his children to the very best schools he could afford. My father did the same.”

This investment in the next generation is behind everything these men do. “I want to leave behind a family that will still farm for generations,” Harry adds. Now Aviwe hopes to plough some of his success into the rural communities of the old Ciskei and Transkei, where he still trades. His wants to launch a financial-services company offering loans through traditional stokvels.

“If poor people can buy clothes on credit, why not farm supplies?” he asks. Such a stokvel would offer far lower interest rates than microlenders. “This way we can turn subsistence farmers into small-scale farmers, and small-scale farmers into something bigger. I’ll buy their produce every step of the way.”

And so, Aviwe hopes, more Gxotiwes will follow in time, who would also be farming commercially along the Fish River one day.