SAB and farmers: impacts on local agriculture

Agricultural raw materials including malted barley, maize and hops are key components in SAB’s supply chain. As such we have developed into a major force in the South African rural economy, providing direct and indirect employment and income to rural farming communities through our investment in the local agricultural sector. This is in line with government’s National Development Plan (NDP).

SAB’s agricultural activity supports local economies through the number of jobs created by the commodities we buy, including malting barley, hops and maize. A recent study by independent economic group Econex found that SAB’s beer operations have particularly high spin-off effects on rural employment. This is evident in the 110 000 or 2.5% of all jobs created in rural areas being traced back to the beer division, and the majority of these positions are in low skilled and informal sectors.

Taung Barley Farmers Project

In the early 1990s, we implemented the Taung Barley Farmers Project. The aim was to encourage local barley production, create a broad-based supply chain and create a sustainable source of income for smallholder farmers. The initiative has grown to support more than 120 smallholding barley farmers whose families’ and communities’ lives have improved significantly as result.

KZN Maize Project

In 2011, in partnership with the Agriculture Department, we set up a joint venture that saw our company procuring locally grown maize from farmers in Bergville, KZN. The project has now expanded to the uThukela and Amajuba districts of KZN.

Growing The Local Barley Industry

To cater to future barley requirements, construction plans are underway for a R700-million malting plant in Gauteng. This will provide our company with the future malting capacity required to meet consumer demand for our brands as well as reduce the volume of malted barley we import. The new plant will see us increase our requirements for locally sourced barley by more than 30%.

Go Farming: Supporting Small Scale Barley Farmers

Go Farming is another of our initiatives established to further support future requirements for locally sourced barley. The project will support the development, growth and sustainability of emerging and small scale barley farmers. They will then be able to develop a sustainable, reliable and competitive local agricultural supply-chain.

Working With Industry Roleplayers For Water Conservation

Further to this we are working closely with the agricultural sector on a number of sustainable development matters, focused on improving efficiencies, particularly in terms of water use.

Our research into saving water within the barley industry began in 2012. ‘Better barley, better beer’ identifies ways to improve irrigation in barley farming amongst commercial farmers in order to improve water efficiencies.

A similar initiative was implemented on hop farms, beginning with a water risk assessment in partnership with the WWF  and GIZ, known as the Water Futures Partnership . A plan of action to reduce water risks has been developed in collaboration with farmers and other stakeholders.

Guiding principles

SAB is committed to investing in South Africa. Throughout our value chain we seek to deliver superior worth to three key constituencies: South African retailers, consumers and society. We strive to do this in a manner that supports economic development.

Our business model is founded on the premise of a virtuous cycle in which we invest in strategic areas to drive growth and leverage scale. The aim is to deliver efficiencies which in turn support further investment for growth. This principle is applied across all of our projects and investments, including our company’s approach to developing SA’s agricultural sector.

Have any of SAB’s farming initiatives affected your work or your life? Share your experiences in the comments below!