Development financier the Eastern Cape Development Corporation (ECDC) signed a cooperation agreement with Argentina-based consortium A&G International in July, which will lead to the production of 25 000 ha of soybeans and other grains for biofuels, human consumption and animal feed in the province by 2016.
The agreement will be followed by a 500 ha pilot project for the production of soybeans in the Ngcobo, Elundini and Mbashe local municipalities.
A five-member A&G International delegation, led by its lead partner, Paul Ureel, spent a week crisscrossing the province to identify an appropriate site and dermine the state of the soils and the farms.
The team also spent time assessing the surrounding industry’s ability to maintain equipment and the state of readiness of the local work force.
“The ECDC is currently consulting with public - and private-sector stakeholders to raise the required capital to ensure that a minimum of 5 000 ha of soybeans is planted in the 2015 season and a minimum of 25 000 ha is planted in the 2016 season,” says ECDC risk capital specialist Phakamisa George.
“The agreement follows an earlier visit in April by the ECDC to the Argentinian province of Cordoba, which was aimed at understanding the whole grain production chain from soybean to oil for human consumption, biofuels and animal feed,” notes George.
“It also included understanding methods employed in land preparation for planting, harvesting, storage and sale,” he adds.
George highlights that Argentina is widely acknowledged as the country with the most developed agriculture for the massive production of grains, with the most important being soybeans.
He says the pilot is being run in partnership with the Ncedisizwe Development Secondary Cooperative, in Ngcobo. The cooperative, which represents farmers, will provide the land required for the production of the soybeans.
Ureel says South Africa has the capacity to be an important player in grain production and distribution worldwide. Massive grain production in the Eastern Cape should increase the capacity of the East London and Port Elizabeth harbours, where new terminals would have to be built.
“This could have a multiplier effect and it is reasonable to think that, on a long-term basis, tens of thousands of jobs can be created. The next step would be to expand to other provinces.
“Already experimenting in the north-east of Pretoria is taking place and the market is there. South Africa is already importing 1.5-million tons of animal feed from Argentina a year,” says Ureel.
Planting for the pilot is expected to start in October or November, depending on the soil conditions of the farms, as well as climate conditions.
Last month, land preparation started with an Argentinian agronomic engineer and an agricultural technician preparing the soil in collaboration with several young local operators.
These young operators will form the nucleus of the future project under the supervision of two Argentinian producers, Ricardo Moroni and Raul Roggero.
George says the ECDC started the process of mobilising the required resources through the presentation of a preliminary business case, followed by a comprehensive business case for the establishment of the biofuels industry to the Eastern Cape provincial government.
Ureel says it is envisaged that an investment of $1000/ha will be required for the pilot. The local contribution will be through cooper-atives making land available for the project, while the ECDC will finance the project.
A&G International will provide the technol-ogy, which includes training the first operators and importing the first equipment. In the long term, if the pilot project is suc-cessful, a massive launch of grain production in the province and complementary activities will follow.
These activities include the development of a genuine local agroprocessing industry, manufacturing of local equipment as well as training a new generation of young operators specialising in no-till planting.
“By April 2015, we will be able to determine the success of the project, which will be evident by favourable soil and climatic conditions for the development of this project. “It should be much easier to convince pro-ducers and investors to actively invest in grain production in the province”, he adds. “
Argentina is the first exporter of soybean and the third-most important producer of soybeans after the US and Brazil. “It is one of the pioneers of direct planting, which entails planting the seed without moving or ploughing the soil.