KASINTHULA SUGAR CANE GROWERS SCHEME (KSCGS) PRODUCER PROFILE

Transcription

1 KASINTHULA SUGAR CANE GROWERS SCHEME (KSCGS) 1.0 BACK GROUND INFORMATION PRODUCER PROFILE Kasinthula Cane Growers Scheme was initiated by local leaders and with support of Government, to alleviate poverty in tribal area of Katunga in Chikhwawa. The availability of irrigation infrastructure from a collapsed rice scheme at Kasinthula combined with the proximity of the Illovo Nchalo sugar estate with its large sugar processing unit and ready access to all year round water supply from Shire River presented ideal conditions for an irrigated smallhoder cane growing scheme. The Government of Malawi established the Shire Valley Cane Growers Trust (SVCGT) in 1998 to help manage the scheme on behalf of the farmers. The trustees for SVCGT are drawn from the local community and relevant specialists from various disciplines. The trustees leased land from the local community for the scheme and started a farming company called Kasinthula Cane Growers Limited (KCGL) to operate the cane-growing venture. KCGL is 95% owned by the Trust and 5% is owned by Illovo Nchalo Estate. KSCGS was established in phases. Phase one became operational in 1998 and Phase two became operational in Phase three is expected to be commissioned by the end of The Table 1 below shows details. Table 1: Details of the establishment of the phases and the number of farmers involved PHASE YEAR OF ESTABLISHMENT NUMBER FARMERS OF HECTARES TOTAL PRODUCTION AND SALES RECORDS Table 2 below shows production and sales records for Kasinthula Cane Growers Limited since creation. 1

2 Table 2: Production and sales development since creation Indicato r 2000/ / / / / / / / / / 2010 Member s Area (ha) Cane producti on (T) Cane Yield (T/ha) producti on (T) Yield (T/ha) ,541 77,215 86,381 75,875 77,881 76,238 78,649 64,028 69,831 68, ,816 9,029 10,697 9,860 9,572 9,626 9,770 7,891 9,064 8, price (K/T) 11,439 12,816 15,276 20,023 22,755 28,193 36,217 42,256 45,442 51,403 gross income 123,733, ,709, ,407, ,532, ,816, ,401, ,380, ,450, ,855, ,514,8 55 (Kwach a) 2.1 PRODUCT FLOW AND GOOD CONTROL cane ratoon improvement is carried for an average of 11 months (from first irrigation in ratoon cane and planting in plant cane to harvesting) depending on mill season. On average Kasinthula is given a quota to supply at least 400 tonnes sugarcane per day of the harvesting period to Illovo mill. Cane is harvested manually by cane cutters who cut the cane as well as put it in windrows. Kasinthula contracts Unitrans on a seasonal basis to load the windrowed cane using grabber loaders into haulers and haul the cane to the mill via the weighbridge to determine its tonnage. Representative samples are collected from delivered cane and sent to the laboratory to determine its expected recoverable sucrose (ERS %). This ERS % is used as a conversion ratio to determine 2

3 the average sucrose tonnes extracted from the delivered cane which Illovo will use to determine how much sugar has been produced from Kasinthula cane to make the payment. The flow of the product has got controls in that from the field all loaded trucks are given a haulage ticket with all the source details at the same time the duplicate tickets are left at Kasinthula. The truck therefore passes through the weighbridge where Kasinthula also planted her weighbridge clerks to check and confirm the filtered weight into the Illovo system. From there, the weighbridge clerks also pick a ticket for the truck and bring it to Kasinthula. Illovo releases weekly laboratory reports that indicate all the sugar cane tonnes delivered through the weighbridge on each day of that week and sucrose recovered depending on the calculated ERS. Kasinthula cross checks the haulage tickets with weighbridge tickets and compare the tonnage with that on Illovo Weekly Report. If the tonnage is matching then KCGL endorses and goes ahead to raise invoices for the sucrose produced for Illovo to pay. If the figures are different then a thorough follow up is done to find where an error was made. 2.2 PRODUCT OWNERSHIP Kasinthula Cane Growers Limited and Illovo have a 25 year sugar cane supply agreement. The product is owned by the organisation until the weighbridge at the processor s factory. After the product is weighed and paid for, it becomes part of Illovo Cane and the organisation loses ownership. 2.3 PAYMENT OF THE PRICE TO THE ORGANISATION AND THE MEMBERS Illovo pays the organisation upon receipt of an invoice from Kasinthula. The invoice is raised based on the agreed upon sucrose tonnes produced from the sugarcane delivered using the ERS % as a conversion ratio at a given provisional price. At the end of the season Illovo calculates the actual price the Kasinthula sugar was sold for, deducts 40% processing and marketing costs and the difference from the provision price is paid back to Kasinthula Cane Growers Limited who then deducts production costs (approx. 133/MT) and administration costs (approx. 30MT) and pays the members according to their production. 3.0 DECISION MAKING All decisions for the company are made by Board of Directors who comprise of the Chairman from the Farmers Main Committees (Phase 1 and Phase 2), appointed representative from the Ministry of Agriculture (Government), Local Chiefs and Illovo sugar company representative. 3

4 All decisions concerning farmers, Trust and company are made through the Farmers General Assembly and through Board meetings. 4.0 FAIRTRADE PREMIUM: MANAGEMENT AND PAYMENT OF THE PREMIUM The premium is managed by farmers themselves with assistance from management and project ideas originate during the General Assembly. A committee was established to take full responsibility in the management of the premium but the committee always consults management for guidance on the use and management of the premium. The committee is called Fairtrade Premium Committee. Farmers use the premium in three different ways namely; community development (30%), farmer development (40%) and plough out and replant (30%). COMMUNITY DEVELOPMENT The premium has been used for community development projects which are meant to benefit both farmers and other people from the surround community. From the beginning Kasinthula has been dwelling much on implementing social development projects. Some of the social development projects include: drilling boreholes, construction of clinic, Chinangwa and Ntondeza electrification project, construction of a chemical store room, tap water extension, purchasing of computers and printers for secondary schools and also the construction of Chinangwa Junior Primary school. FARMERS DEVELOPMENT In the beginning farmers at Kasinthula were facing so many problems. In fact most of the farmers used to be living in mud and thatched houses and had difficulties in terms of transportation and payment of school fees for their children. Due to this, it was agreed during the farmers General Assembly in 2004 that 40% of the premium should be used to purchase farmers and employees developmental materials as well as paying school fees for the farmers children. PLOUGH OUT AND REPLANT Kasinthula improves its cane fields through plough out. Plough out is carried out when cane fields are producing low yields as result of old ratoons, poor soil structure and drainage and sometimes disease infestation. As part of scheme development, 30% of fairtrade premium funds are used to finance these operations. 4

5 5.0 WORKERS HIRED BY THE ORGANISATION Area of work Permanent Seasonal Temporary Total Male Female Male Female Male Female Field Processing Administration Total