Case story

  • South Africa

Project Grow - Lima Development Foundation and Sappi

South Africa

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Case Status

Forming agreements with with smallholder eucalyptus plantation growers on communal lands of KwaZulu Natal.

Story

Sappi is an international pulp and paper company and the second largest private forest owner in South Africa. It manages 260,000 ha of plantations or 18% of the country’s total, with a further 40,000 ha of plantations in Swaziland.

Sappi established its ‘Project Grow’ outgrower scheme in 1983 with smallholder eucalyptus plantation growers on communal lands of KwaZulu Natal. Project Grow started with three growers farming eight hectares. By 2006, 15,000 ha had been planted by over 9,800 farmers.

Project Grow is managed by the community development NGO Lima Development Foundation. Under the scheme, local communities sign a contract with Sappi, entitling them to free technical advice and training; free seedlings; an interest-free loan to cover inputs, along with further advances to cover cash flow issues during the growth of the trees. Under the Project Grow scheme, the farmers do not own the lands that they plant. Individuals are granted rights to community-owned land for plots of an average size less than one ha per family. Farmers can pay other members of the community for work carried out on the plantations. Around 80% of the workforce are women. When the trees are harvested, Sappi pays the growers the value of the produce minus any advance payments.

Sappi takes a structured approach to initial engagement with the outgrower communities. First of all they seek the blessing of the local chief and senior community members. They then hold community discussions, in order to tell them about the proposed project. They then invite individuals in the community to come forward if they are interested in becoming growers under the scheme. Sometimes an arrangement is agreed with the whole community if it is a community project. Ongoing communication and engagement with the communities ensure that issues are addressed as they arise, in a collaborative way by the company and the community.

Some issues they have faced include: theft of seedlings and timber (through opportunism or lack of awareness of the initiative); problems with regulations on water use and securing water licences for communal land; road infrastructure; technical and management support for local enterprises to assist with harvesting; and issues around payments. Some plantations may be subject to land reform and restitution processes if they have been established on land previously expropriated from the previous users.

Companies consider outgrower schemes to be an effective approach for ensuring a sustainable supply of timber while sharing the benefits (and risks) with local communities. The schemes also offer smallholder outgrowers with a way to use idle lands to generate economic returns. Further benefits include the potential to involve and benefit the whole community. All participants benefit but no-one gets anything for free, which stimulates a sense of ownership and commitment to the scheme. Interest-free loans and a guaranteed market make the project more attractive and feasible to the outgrowers.

Outcome

Project Grow and other outgrower schemes allow disadvantaged communities to overcome barriers to access to the industry. The scheme also stimulates business in other areas. The growers use the money generated by the schemes to invest in other business activities, as well as allowing families to put their children through further education. The schemes themselves generate significant local employment opportunities, as well as work for contractors who assist with planting and harvesting.

References

Original Author: Emma Wilson, Senior Researcher, Sustainable Markets Group Team Leader, Home International Institute for Environment and Development

Contributor(s): This article was modified by Nicolaclayre (3), Kyle (3), and Admin (2).