In close proximity the town of Qonce (King William’s Town) The potatoes grown on Thulani Magida’s Farm Juta Agritech are expected to be harvested by May. All through the year, they plant squash, butternuts and cabbage that will be rotated with the green mealies (corn) during summer and the carrots and onions in the winter.
Right Thulani Magida, of Juta Agritech
“We’re extremely fortunate, as we’re right in the middle of Eastern Cape’s people,” he says, noting that there is a East London fresh produce market is a source of support for the town in the past, while Qonce’s local fresh produce market right on their doorstep is visited by local traders. Juta Agritech also sells its products directly to Spar stores in Qonce, Alice and Middeldrift.
Fast food chain Steers is the company that takes Sifra potato chips and Squirrels Takeaway known in Qonce for their best potato chips available, and rebrands their Mondial.
“We do not have any issues regarding market access. However, the ability to be competitive in those market is a problem,” Magida, an agricultural economist and MBA graduate, discusses. In his previous job at that was the Humansdorpse Kooperasie in the Langkloof the Netherlands, he witnessed firsthand the factors that make a farm tick and then decided to take the risk of starting a the business of his own.
Unwashed versus washed potatoes
The market in South Africa fresh produce municipal markets are only accepting washed potatoes. Potatoes that aren’t washed are rarely offered on the market in South Africa, despite the benefits of shelf life. Magida has a potential buyer who is interested in bringing his unwashed potatoes across the border into Botswana as well as Zimbabwe as an opportunity that he’s keen to investigate, as there is no the postharvest processing equipment needed for washing and the grading.
“We’d prefer to join the market for washed potatoes, but we’re paying more for washing manually than using machines. Our earnings isn’t enough to justify the amount we’re earning. Packline and washer will aid us greatly.”
The entire money goes to production and he’s poured every penny of his savings in the company, with little for the company to make a profit. “Seed potatoes purchased from WesGrow located in the North West Province cost us about R27,000 or 1,340 euros to transport for just three acres if there’s not a truck coming towards the Eastern Cape. We’ve established a great relations with Ettienne Groenewald of WesGrow and he assists us in times of a shipment going towards the Eastern Cape and we pay only a small portion of the price. Our goal is to increase our production up to 5 hectares, and are seeking to achieve 35 tonnes of soil per hectare (the average for the industry is 45 tonnes/ha) since our soils require some improvement.”
He adds: “For very good seed it’s best to look at the generations 1 to 4, and they can be harvested from these seeds but yield capacity is already affected. Generations following are only suitable to produce potatoes that can be eaten.”
Generic potatoes vs. brand-name potatoes
“One challenge we face is the fact that we use standard potato bags. Our potatoes are very attractive however, the food right next to them in a bag that is branded appears nicer. This makes it extremely difficult to stand out with fresh produce and creates a situation where our potatoes become the object for negotiating prices down regardless of the high quality.”
The hand-crafted method of grading is why the current system only covers three categories. Marketing potentials that could be exploited.
Packaging that is generic degrades the high quality of the potatoes they are served.
The idea of having their own bags for potatoes printed isn’t that costly, however at the cost of production, which is around 5470 euros/ha or R110,000 per the hectare] their budgets currently do not stretch to the highest levels of selling. (A significant benefit of the farm lies in its position just below the Cata Dam, receiving its water through gravity, not via a pump, which saves their electricity bills and guarding against the damaging effects that loadshedding can have upon South African vegetable production.)
The idea is to grow the area to five hectares. This will bring the benefits of scale by, for example taking in a potato planter loaned from 600 km away, like they currently do.
Consolidating offtakes could help, especially when dealing for cabbage that is water, as he says, which you’re transferring. “If I can obtain an offtake from a person who has a truck collecting 14,000 cabbages in one go this would reduce the need to go transportation to and from the market to fulfill small orders, and allows me up to concentrate on my manufacturing.”
The author continues: “In South Africa we’re having a difficult time commercialising the new farmers. One of the reasons, aside from the lack of funding insufficient knowledge about the best ways to operate at a commercial scale in which everything has to be handled correctly every day. The change in attitude.”
For further information:
Thulani Magida
Juta Agritech
Tel: +27 82 877 4699
Email: info@jutaagritech.co.za