South Africa: Macadexit could bring "new opportunities" for Subtrop

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South Africa: Macadexit could bring

The Southern Africa Macadamia Growers' Association (SAMAC) has set up an "evolution committee" to draft proposals on a new structure and what levy increases will be in store when it pulls away from a broader industry body that also represents avocado, mango and litchi growers.

SAMAC chairman Walter Giurichich tells Fresh Fruit Portal around 80% of member voters opted to leave the South African Subtropical Fruit Growers' Association (Subtrop), with 182 of SAMAC's 682 taking part in the vote.

The vote was for a withdrawal from Subtrop effective on Feb. 28, 2018.

"The motivation was that given the size of the industry now, the macadamia association would do better to stand on its own and have dedicated staff to attend to issues and challenges, and the initiatives the macadamia needs at this time," he says. 

"There’s been a mixed reaction to it, I won't lie. Many farmers in South Africa don’t deal with solely one product – to give you an example, many macadamia farmers also grow avocados, and vice versa," he says.

Giurichich mentions the current levy collected by SAMAC stands at ZAR0.23, or less than two U.S. cents, per kilogram of product, but there have been a lot of calls from within the sector to increase the amount to pay for research or services.

He says the general feeling is the levy will at least double, but more than likely it is going to have to triple.

"The review for the statutory levy rolls over in March 2018, so between September and October we’ve got to have an industry vote again about whether first to apply for the statutory levy, and with that the amount," he says. 

"An evolution committee has been formed which consists of two of the current SAMAC board of directors, and two of the persons that submitted the motion. 

"They are busy drafting a proposal on how the new SAMAC is going to work, including funding, research, staff requirements, and all of that. And that’s got to be submitted to the board – the board will give its opinion, and then that has to be presented to the growers to vote on it."

The loss of an association representing a ZAR4 billion (US$320 million) sector is certainly a blow for Subtrop, but CEO Derek Donkin is now looking at the way ahead from here.

"The level of support for the notion took people by surprise to some extent," he said.

"For the votes there was basically a vision sold but none of the actual nuts and bolts were sold to the growers...they previously had already said they were willing to put more money into the organization to make it effective for them. 

"I think it’s going to affect the [avocado, mango and litchi] groups in terms of how they function in Subtrop, but each one has its different needs, so it provides an opportunity now for each of the other member associations to look at what they should be doing, how they should fund it, and how they should structure their activities to achieve their goals."

Drought recovery

Giurichich says some SAMAC members have felt the association has been misusing funds, which he claims "definitely wasn't the case".

"If anything the funds are actually decreased due to the drought we’ve been through; the production dropped by 28%, so 28% fewer funds were collected and SAMAC had to delve into reserves that it had, both last year and this year as well, just to maintain the bare minimum of services going," he says.

He is positive about recent rains, but they would have been more beneficial for the current season had they occurred in August rather than starting in October-November.

"So for this season it might be a bit too late – the general feeling is the crop for 2017 will be of a similar size to 2016, maybe a bit more, but 2018 if we continue to get good rains then we’ll be back at full production," he says.

"The expectation for any agricultural industry to bounce back immediately after the worst drought in recorded history is unrealistic. 

"The trees are stressed - there's been the death of trees as some people couldn't irrigate, and there is a big issue in the industry now with the yellowing of trees and there hasn't been a reason found for it; there have been opinions that it might be an iron deficiency due to poor water quality, a lot of salts in the soil."

He concludes this is just one example of where increased funding could be used in research.


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