Communal Wool Farmers Project: quick guide

What we do

The objective of this intervention is to increase the income of wool producers in the communal areas of South Africa by developing commercial market arrangements favourable to sustainable wool production and thereby reduce poverty.
The most important factors that impact negatively on communal wool farming include:

• Lack of private land tenureship, restraining private incentive for development, such as infrastructure for production, management and marketing;
• Lack of individual financial means for development (including the lack of collateral for loans);
• Poor genetic quality of sheep;
• Poor nutrition of sheep, mainly resulting from continued overgrazing of communal land; and
• A lack of business knowledge and technical skills amongst communal farmers required for progressive woolled sheep farming.

The main symptoms stemming from these restrictions are:

• Low wool production per sheep and per unit veld area;
• Inferior wool quality;
• Inefficient shearing process, poor wool classing and unacceptable packing of wool;
• Unsatisfactory market access;
• Very low income from wool, resulting in little incentive to invest in wool farming; and
• Low reproduction rates, resulting in low income from sheep sales and very little opportunity to select for genetic improvement.

There are an estimated 100,000 small-scale wool producers in the former Ciskei/Transkei area of the Eastern Cape. Since 2004, ComMark has funded a National Wool Growers Association programme aimed at providing these farmers with the necessary support services to enable them to market their wool through the formal auction system. Participation in this system rests on farmers accessing a range of business services and skills so they can sell a market-accepted product.
The NWGA is active in 300 woolsheds, directly servicing more than 10,000 farmers, who are organised into farmer associations to achieve the necessary economies of scale to market their wool commercially. Production advisors assist in setting up these associations and attend their meetings to strengthen these bodies.
The NWGA also provides advisory services and informal training, encompassing technical extension and marketing advisory services. Technical extension relates to information and onsite training with respect to animal health issues, reproduction, grazing management and feed issues - with the ultimate aim to assist farmers to produce high-quality wool. Marketing extension is focused on ensuring that the sheep are correctly shorn, and the wool is well-classed and packaged into wool bales which the broker can market for a high price. Advisors also work with other private sector players around improving business development services to producers, such as finance and transport.
As part of the overarching NWGA Training and Development Programme, this intervention also facilitates communal farmers' access to improved genetic stock. In this regard, the Agricultural Research Council (ARC) funds a ram exchange programme - and although ComMark does not carry the direct costs of this part of the project, the production advisors actively assist communal farmers with the genetic improvement of their sheep flocks.
Finally, as part of this intervention, the NWGA has implemented a formal training programme, aimed at improving the technical and managerial skills of a) the seconded production advisors; b) the Eastern Cape Department of Agriculture wool extension services; and c) emerging farmers who serve as office bearers within the structures of the NWGA.

Why this intervention

Wool is a sustainable cash resource for farmers, but lack of local knowledge in terms of increasing yields and quality limits production and its benefit as an income generator amongst South Africa's communal wool farmers. Traditional wool production - particularly in the Eastern Cape where the first phase of this intervention is based - is characterised by low production yields, poor quality and low prices. In 1996, the Wool Industry Forum identified training and development of communal farmers as a priority to be supported with wool industry funds. The NWGA (with ComMark funding), government and the Agricultural Research Council (ARC) therefore joined together to focus their efforts on this challenge, particularly implementing the following interventions:

• Genetic improvement of sheep flocks;
• Improved animal nutrition through improved veld management;
• More effective marketing of wool to overcome the marketing restrictions resulting from the communal land tenure system (small volumes and lack of collective marketing); and
• Training of shearers and farmers in classing, sorting, shearing and contamination of wool. The training is accredited according to South African Qualification Authority (SAQA) standards.

Before this intervention, severely contaminated, unclassed wool packed in plastic bags were sold to traders, often at ridiculously low prices. After intervention, communal farmers have access to infrastructure such as communal shearing sheds, and wool is shorn, classed and packed according to industry standards for marketing through the formal auction system.

What we achieve

This intervention has seen:

• The organisation of farmers into producer groups, such as shearing shed committees and woolgrower associations, which are necessary for structure and contact with farmers.
• A large number of shearer-training courses have been presented by the NWGA Shearer Training Section.

A total of 654 shearers have been trained between 2004 and 2006. The training programme has also included study tours, lectures and information days - which coincide with the production pattern of wool farming. The success of the training intervention is clearly shown in higher yields and better quality clips.

• Communal marketing has been promoted, while management and production skills have been developed through a range of projects.
• Communities have been linked with commercial wool markets.
• The NWGA continuously strives to improve the link with research, and a number of communities have been linked with researchers and new technology. So far, the project has seen:

o The establishment of eight group breeding schemes within the communal areas.
o Ten communities are involved with a research project (PARASOL) in animal health, with special reference to wireworm.
o Eight communities are involved in a research project on veld management and planted pastures and its impact on animal production.
o A project has been initiated to determine the degree of success to develop farmers from subsistence to emerging to commercial farmers.
o ComMark has funded chemical analysis of wool fibres from communal farms to assess whether it can be marketed as organic wool.

• In addition, the NWGA in 2007 introduced ABET at two communal sheds near Fort Beaufort (Gwaba and Roxeni), funded by AgriSETA and overseen by Mediaworks, to improve the literacy and numeracy levels of the members involved in the shed and so contribute towards producers' decision-making and financial management skills. There are currently 20 learners at Roxeni and 30 learners at Gwaba. Five facilitators, who receive a nominal fee from ComMark for their time to do the facilitation, have been trained by Mediaworks, two for Roxeni and three for Gwaba. This is a pilot programme and a first for communal areas, which is to be extended to more sheds should the training prove to be successful.

A number of challenges remain:

• The programme lacks human capacity and extension officers are over-stretched. The NWGA is in talks with the Department of Agriculture over the possibility of seconding additional personnel in this regard.
• Veld management presents enormous problems for farmers. The communal land tenure system means that flocks cannot be managed effectively. Fencing, camps and grazing are issues that have to be dealt with. District municipalities are being drawn into negotiations to look for ways to manage situations effectively.
• Lack of funding means that fewer improved rams can be brought into communal areas than are required. The group breeding schemes that have been established within communal areas aim to overcome this issue.
• The main objective of this intervention is to promote economic wool sheep farming. It is therefore important that producers have access to the formal market. At this stage only 51.2% of the wool clip from communal farmers is marketed through the formal market. It is therefore clear that the informal market is still significant. This impacts negatively on the average price producers receive for wool; however, data indicate clearly that the percentage of shearing sheds that earn more than the South African average are increasing.

Going forward:
To date the key focus of the NWGA development programme has been to assist emerging farmers enter the formal wool market. As the programme has matured the need for the NWGA to deepen the scope of its activities has become apparent:

• In 2008, the NWGA will expand the scope of this programme, with special focus on an industry-led land reform initiative. A significant number of communal wool farmers have sizeable flocks of sheep (>1,000 head). These farmers have proved they can be successful under communal tenure and would benefit from being settled on farms to which they have individual title. The NWGA has initiated talks with the Department of Land Affairs around the launch of a wool industry land reform programme that will prioritise these farmers for settlement and ensure they have access to a range of post-settlement support services.
• In addition, the NWGA development model is to be replicated in an additional province. The NWGA has received a number of requests from emerging farmer groups to expand its development activities beyond the borders of the Eastern Cape. Additional provinces where the NWGA could have a significant impact on emerging farmers include KwaZulu-Natal and the Free State.
• Specialised sheep-shearing services are to be developed. In communal areas sheep are typically shorn by community members who have limited sheep shearing experience. Typically these community shearers only work for 6 weeks of the year, and as a result the wool coming from these areas is not shorn to commercial standards. In the past the NWGA has run a number of training programmes aimed at improving the skills of these community shearers; however, lack of year-round shearing practice has meant that these shearers need to be continually retrained. As an alternative it has been proposed that the NWGA works with a commercial partner who trains a limited number of shearers and organise them into a mobile business unit that is able to service a large number of sheds and thus secure work for 9 months of the year.
• Niche fair-trade wool marketing programme. Wool in South Africa is typically marketed through an auction system. However, a number of retailers such as Woolworths and Marks and Spencer have expressed a desire to purchase limited quantities of fair-trade certified wool directly from emerging farmer groups. The NWGA has discussed the appointment of a marketing consultant to facilitate emerging wool farmers to access higher value niche markets.

How is this sustainable

One of the challenges of the project is to lock emerging farmers into the formal market. In 2006, more than 55% of the wool produced by emerging farmers was marketed through the formal auction system - up from 20% in 2002/03. Furthermore, former Ciskei and Transkei farmers are getting higher prices for their wool than ever before. Whereas they used to get only 42% of the average industry price, they are currently getting 46%. This shift into the formal wool market has translated into an estimated annual income increase of R7-million for these farmers, compared to previous levels.
Significant improvements are still possible in the quality and quantity of communal yields. If the total current communal clip were marketed through the formal system at the average price of the national clip for 2006, the potential income from wool could improve to more than R60-million. Figures for the 2006/2007 shearing season were very promising. For example, the Hewu local municipality in the Chris Hani District has seen a growth in income from wool production of over 132% on the previous season. And although an increase in the wool price accounts for 43% of the growth, the remaining increase in income is due to better quality and larger yields, which in turn result in higher prices.
One of the most positive aspects of this programme is the support of rural communities that see the benefits of being part of it. It is clear that the potential of sheep farming as a means of developing and uplifting communities is huge. Moreover, as ownership and maintenance responsibilities are carried over to the wool producing communities or shearing shed committees, true buy-in has been realised from participating communal wool farmers.
It is a reality that a single organisation cannot be successful in agricultural development. It therefore remains a priority for the NWGA to establish new and nurture current partnerships to achieve the wool industry's goals in terms of government's Strategic Plan for Agriculture. In addition, as the wool industry is a very important export industry for the country, the South African wool industry fully supports the project, aiming to produce more wool of improved quality.

Who we work with

The National Woolgrowers Association of South Africa (NWGA)

The core goal of this service is to increase the profitability of wool sheep farming. Existing and on-going producer driven research to marketing with a section dedicated to new farmer development.