Announcing the Eastern Cape Rural Development Agency's (ECRDA’s) 2013/14 financial year performance results, ECRDA CEO Thozamile Gwanya said on Monday that a second consecutive unqualified audit opinion was the result of ECRDA’s “determined resolve” to practice financial prudence and build a reputation as a trusted steward of public funds.

In its second year of operation, the ECRDA received a total funding allocation of R173-million, while government grants, excluding funding for the cropping project for the province’s Department of Rural Development and Agrarian Reform, amounted to R138-million.

The agency also provided grant funding from its own allocation to its subsidiaries, which amounted to R12-million, while the unplanned transfer of R12-million to Magwa Enterprise Tea resulted in a R1.1-million deficit for the year.

“Of the R14.7-million approved for disbursement, R2.6-million were Micro Agricultural Financial Institutions of South Africa loans disbursed to 178 beneficiaries.

“These loans catered mainly for livestock farming in the Chris Hani district municipality and for crop farmers participating in the cropping programme of the Eastern Cape Department of Rural Development and Agrarian Reform,” Gwanya noted in a statement.

He outlined that a new credit policy was approved in 2013, which aimed to improve the quality of the loan book while remaining true to the developmental mandate of the agency, which served the “unbankable, entrepreneurial start-up market”.

This as the ECRDA’s loan book of R154-million in pre-impairments – excluding livestock loans – grew by 2% year-on-year, while the impairment rate remained “fairly constant”, at 62%.

Over R2.4-million worth of agricultural loans were disbursed to 34 beneficiaries in the 2013/14 fiscal period, while R818 000 of nonagricultural loans were disbursed to 19 beneficiaries.

At 89%, the majority of the loans were awarded to entrepreneurs involved in agricultural activities, while the balance went to nonagricultural activities.

About 31% of the loans went to projects in the OR Tambo district, 26% to those in the Amathole district , 20% to projects in the Chris Hani district, 19% to projects in the Alfred Nzo district and 4% to those in the Cacadu district.

The bulk of the loans went to self-help groups that usually required small agricultural loans of about R30 000 owing to the relatively small size of arable land.

This segment constituted about 60% of the total loan portfolio and was tailored for the food security needs of communities.

Gwanya, meanwhile, outlined that the agency had begun the implementation of the Development Bank of South Africa’s (DBSA’s) Jobs Fund Agroprocessing Initiative, which saw the DBSA commit R91-million over the next three years to the ECRDA and the Eastern Cape Development Corporation (ECDC).

The DBSA Jobs Fund would contribute 80% of the funds, while the remaining 20% would be equally provided by the ECRDA and the ECDC.

“The Jobs Fund initiative serves as a platform for the establishment of the Rural Enterprise Development hubs at Ncora and Mqanduli.

“[The] ECRDA received R16.5-million for the implementation of the programme in 2013/14. A total of 1 866 ha were planted in two sites by the end of the financial year – 955 ha in Ncora and 911 ha in Mqanduli,” Gwanya noted.

During the period under review, the ECRDA also implemented the Department of Rural Development and Agrarian Reforms’ Letsema grain production programme.

This R38-million programme saw the planting of 6 559 ha of yellow maize across five districts, benefiting 325 projects.

In the livestock development programme, focus remained on Fort Malan, in Mbhashe, and Ntseshe, in Mnquma. In Ntseshe, the ECRDA provided farmers with six Nguni bulls, while those in Fort Malan received three Braman bulls.

In both villages, a total of 1 300 cattle were vaccinated, while three training workshops on basic animal husbandry were held in each village.

“These interventions are geared to improve production volumes and reduce mortality rates,” Gwanya explained.

Over the period, the agency also secured a three-year DBSA Jobs Fund grant of R113-million for the organisation’s forestry development programme.

The objective of the programme was to ensure that, by the end of a three-year period, 6 000 ha would have been planted, with the creation of 565 permanent jobs in eight projects, which covered 15 600 ha.

During the year, nearly R5.5-million was committed to five projects – Izinini and Sinawo, near Bizana, Mkambathi, near Flagstaff, Sixhotyeni, near Maclear, and Gqukunqa, near Qumbu.

Gwanya added that the ECRDA had also formed a high-value partnership with the Sakhisizwe biofuels project, in the Coega industrial development zone, which aimed to generate 100-million litres of biodiesel a year.

The ECRDA would provide feedstock to the plant from the ECRDA-supported farmers.

As such, these farmers were expected to embark on a cropping programme of no less than 40 000 ha of land in 2014/15 to plant oil seeds, soya beans and sunflower seeds as rotational crops.

Gwanya outlined that the organisation would continue to focus on identifying high-impact priority programmes, underpinned by robust operational efficiencies.

Additional focus would be placed on sharpening the ECRDA’s loan finance tools to improve their performance and ability to effect meaningful economic change in the rural communities served by the organisation.

“The ultimate objective is building vibrant rural economies, reducing poverty, ensuring food security and the empowerment of communities,” Gwanya concluded.