Matlala says South Africa with its agricultural potential see biofuels as a commercial opportunity for farmers who are faced with low rainfall, high input costs and an unfavourable market at times flooded by cheap agricultural imports.
Other barriers facing emerging farmers includes access to irrigation water, poor organisation at farmers’ level, production finance, having marginal and small fields that are not viable.

“As the country is engaged in exploring commercial biofuels production and policy development, this opportunity, if properly packaged and implemented can address unemployment, increase emerging farmers’ economic participation in the agricultural sector,” he says.

Addressing delegates attending a Biofuels Conference in Johannesburg recently, Matlala says there is an estimated 12,2 million hectares of land mostly in the former homelands which can be brought into production through organising emerging farmers into working as cooperative.

 “These cooperatives will negotiate good input prices, deliver to plants as a group and jointly own the processing facilities by bringing their capital into a pool,” Matlala says.

The NAFU boss says a large number of good farmers have been farming on farm sizes that are too small to afford own machinery.

“Biofuels companies must facilitate access to machinery and must be placed within the farmers’ reach for the realisation of potential harvests, build farming enterprises, expand operations, operate profitable and sustainable,” he says.
Matlala calls upon big businesses to partner these cooperative, through the provision of equity or angel finance, technology that will enable quality products development as it is difficult for small under resourced farmers to keep their capital long enough in the plant to get to the high return stage. He says small emerging farmers will have the majority share holding through their related delivered produce

“Quality training must be made available by being brought close to the farmers for it to be made more accessible,” he says.

Last year in December, the government approved the Draft Biofuels Industrial Strategy, which calls emerging farmers to form the nucleus of biofuels development.

Biofuels are liquid fuels produced from oily or starchy energy crops such as sugar cane, maize, soya beans, sunflower seeds and jatropha trees.

Using the country’s feedstock and technology, bioethanol can be produced at R2,50 a litre, while the basic local fuel price is more than R5 per litre.

The country has a scope to produce 1,1 billion litres of bioethanol a year.

The development has a direct and spin off effects that includes the creation of an estimated 55 000 jobs, add 0,12% to GDP, save R3,7 billion annually on the balance of payments and achieve greenhouse gas savings of R100 million annually.

In support of Matlala, Madi Ramsamy, Siyanda Bio-Diesel CEO says his company’s joint venture with Sasol and Central Energy Fund (CEF) will see the formation of geographically located Soyabean Outgrowers Associations (SOA) meant to accommodate different categories of emerging farmers who will supply the biodiesel plant with soya beans.

Ramsamy says each member of these SOA will be expected to have a minimum of 500 hectares of soya bean production per year.

“Some of these farmers are already structured within existing agricultural projects and irrigation schemes usually on small individual land holdings of less than five hectares. It is our view that any emerging farmer, with more than 300 hectares of arable land be treated as any other commercial farmer with respect to the supply of soya bean to the biodiesel processing plant,” he says.

Last year CEF and Sasol chose Siyanda Biodiesel largely a ladies only company as their black economic empowerment partner in a proposed 100 000 tons per year biodiesel production plant. The proposed plant which its site is still to be decided will require 600 000 tons of soya beans to produce 460 000 ton per year of oilcake a high protein ingredient in animal feed.

Also concluded is Ethanol Africa’s equity with a broad based BEE consortium led by Valli Moosa’s Lereko Holdings.
The consortium known as Ethanol Africa BEE Consortium (Pty) Ltd comprises Lereko Investments, Mvelaphanda Holdings, a Free State broad-based black economic empowerment grouping and women’s groupings.

Ethanol Africa has already started working on its R700 million bio-ethanol plant in Bothaniville in the Free State.
Ethanol Africa CEO, Johan Hoffman says the plant is expected to consume 1 150 tons of maize per day, converting it into 473 000 litres of alcohol ethanol and 63 000 litres of biodiesel.

Hoffman says they expect to start their operation this year with an annual processing capacity of between 370 000 tons. This will also see 400 000 tons of maize producing 155 million litres of ethanol.

About 400 maize farmers and Grain SA members have also grouped themselves under Grain Alcohol Investments are set to contribute between 160 000 tons and 200 000 tons per year of maize to pay for their shareholding in Ethanol Africa.

“The company’s Emerging Farmer Project will contribute significantly to the economic stabilisation of the Free State rural areas. We are to support them under the company’s maize procurement division through our comprehensive agronomic services, crop management and co-operative sourcing,” he says.

Hoffman says his company’s Emerging Farmer Project assures that small-scale farming is viable and sustainable. “In the long term we should like to see a situation where at least 30% of our maize is supplied by emerging farmers,” he said.