May 2019 2nd Edition

Sorghum brews success for rural farmers

Written by Siya Miti

A group of Eastern Cape emerging farmers are set to expand their business by 85 percent within five years, after getting a contract to supply sorghum to the makers of Chibuku, a traditional sorghum beer.

Nondobo Agricultural Cooperative started growing sorghum in 2016 following a collaboration with LM Holdings (LMH), a black female-owned company. The partnership created a win-win situation, with Nondobo bringing funding and plenty of land to the table and LMH contributing an uptake agreement for the supply of sorghum.

Luleka Mbete of LMH is a graduate of both the University of Johannesburg (corporate governance) and the Institute of Chartered Secretaries (finance and law).

She became interested in farming in 2008. Research in the sorghum industry and its market led her to United National Breweries (UNB), the makers of Chibuku.

“I got an offtake agreement from UNB but at the time, it was difficult to get funding because of the global financial crisis, so I put that dream on ice and got a job. In 2016, I tried again because sorghum fascinated me and I thought there was a large scope for growth in the market,” she said.Partners Luleka Mbete of LMH Holdings and Anda Zaku of the Nondobo Agricultural Cooperative.

An offtake agreement is an agreement between a producer and a buyer to purchase or sell portions of the producer's future production. UNB again gave her another off take agreement, along with seeds and fertiliser. “I needed a tractor and labour so I joined forces with Nondobo Agricultural Cooperative. At the time, they had R500 000 in grant funding from the Eastern Cape Development Corporation to plant sorghum but they had no contract to supply anyone. So we worked together and planted 90 hectares in Dutywa,” said Mbete.

Diageo, which owned UNB and distributes Smirnoff, Captain Morgan, Johnnie Walker and Cîroc, among other brands, provided support through its empowerment trust.

Today, Nondobo Agricultural Cooperative has all the equipment needed to farm efficiently and is set to plant 2 000 hectares this year, after another 10 land-owning cooperatives joined the partnership.

“Our target is 12 000 hectares in five years,” said Mbete, adding that challenges they still face are narrow roads not suitable to their machinery and a need for additional fencing.   

Rural development
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