Biofuel plant backfires on community
The drive towards using biofuels in cars is getting legislative help, but the plant in Cradock in the Eastern Cape – earmarked to produce ethanol – is far behind schedule and the surrounding farms supposed to supply it are in disarray. What was once an exciting prospect for locals has turned into something they talk about with many a swear word.
That is, if they do talk. When the Mail & Guardian went to the small Eastern Cape town many people were too scared to speak and any comments were off the record.
“A photo is a death warrant. We have interests here and if we talk we will lose out,” one said. Even a photo of a bakkie on the horizon would not work – a man is known by his bakkie in Cradock. It was a hard day for the photographer.
The programme started as a big thing for locals in 2007. The government would build a huge plant, stimulate the local economy and drive local farms to sell even more crops to a guaranteed market. People invested in new businesses, knowing that the market for goods would rapidly increase.
The first phase of the factory would use sorghum, but the second phase would use locally grown sugar beet. It is a crop that grows freakishly well in the district. The weight of a sugar beet normally stays under a kilogram in Europe, but it mushrooms to 13kg here. The harvesting machine specially imported from Germany could not handle their size.
“We have incredible soil, the country’s second-largest irrigation scheme and an eight-month growing season,” said one businessperson.
Source of contention
The farms earmarked to produce the beet are the biggest source of contention. The plan called for the department of rural development and land reform to buy 6 000ha of land from local farmers. These farms would be put under the charge of a local consortium, the Agrarian Research and Development Agency.
Mthobeli Mxotwa, spokesperson for the department, said it had bought 25 farms in two phases. “We signed agreements with the agrarian agency to run the farms on our behalf. They must make them commercially viable,” he said.
The agency runs the farms but the department decides who lives on them. “We have a responsibility to landless people and will choose who will move to the farms,” said Mxotwa.
The people trained here will transfer their skills to other programmes across the country.
“It’s a big programme, which the Eastern Cape really needs because it is so poor. Biofuel will be a boon for the area,” he said.
But farmers say it is not so straightforward. Bumping around his farm in a bakkie, one told his story: “Like many farmers, I approached the department and said I was willing to sell my land. In August 2010 they told us the farms would be evaluated and paid for by that December. A year later we got letters of agreement saying they would buy the land and that we would have to move out when the second payment goes through. People started finding schools for their kids and putting nonrefundable deposits on houses and farms in other places.”
Then a rural development director from Pretoria came and toured the farms. “Thirty-one farms in two days! He didn’t even stop at my farm and at others he drove past the gate and thought that was enough to decide their value.”
Revised offers were delivered to the farmers, all 10% to 15% lower than the original ones. Like a few others he agreed to sell because he was worn down and needed to cover his deposit on another farm.
A local with detailed knowledge of the sale process said: “The department has destroyed any goodwill it had. You have to remember that these farmers were willing. They offered 31 farms and in the end little more than 10 had the stomach to sell. So they will not find more farms to buy and they will not have enough land to harvest the amount of beet they need.”
And now the farms lie empty. The farmer with the bakkie said the department had not even taken ownership of the keys. Pointing to the lush green lucerne fields of his neighbour’s farm, he said his used to look like that. Now the fields are a dead yellow and getting them back into production would cost a fortune.
The more he spoke the angrier he got. Eventually apologising for swearing in every sentence, he added: “That fucking department thinks buying land is like buying a loaf of bread.”
The anger when people talk about the biofuel plant is more measured, but no less energetic. The constant changing of deadlines for its construction has made the community weary. A shopowner summed up the mood: “We have stopped talking about this whole thing because it gets rolled over every year. Many people saw this as an opportunity, but now nobody cares.”
In 2007 the Industrial Development Corporation (IDC) said five biofuel plants would be built as part of the accelerated and shared growth initiative for South Africa. The project manager, Noel Kamrajh, said then that the Cradock project was in a detailed engineering study phase. “Construction is likely to start in January next year,” he said.
In 2011 the IDC said Cradock would be the sole project and two others were on hold until that plant proved it could work.
Locals now doubt that the plant will ever be built. “The factory will never be built and if by some chance it is, it will never work with the people who are in charge … which is a pity, because it could have been hugely successful,” said another businessperson.
Most blamed the local consortium running things – the agrarian agency. Everyone the M&G spoke to agreed independently that because people in the organisation had a stake in ensuring progress in building the biofuel plant, creating commercially viable farms had been a slow process. Sitting at his desk with Jennifer Lopez playing in the background, one said: “Their vested interests have delayed this project. The directors are earning so much during this research phase that they keep it dragging on. How many times do you have to test if a crop grows?”
The chairperson of the agrarian agency’s board, Neil Morris, denied these allegations. “The process is being delayed due to certain conditions standing unfulfilled. These are regulations that the government needs to promulgate, such as the mandatory upliftment of bioethanol refineries, and the subsidy or price support mechanism for biofuel producers,” he said.
He said the agency was audited annually and there had been no financial irregularities since its inception in 1999.
The agency directed detailed questions about the project to the IDC. Kesebone Maema, the corporation’s head of communications, said it was still subject to approval by the board. As a result she could not comment on specific details or expenditure. But she did say there had been a great deal of work and research done.
“From the early stages we have been incurring costs,” she said.
So, for now, Cradock is in limbo. The locals are angry and frustrated but they are getting on with life while waiting for this big project to unlock the region’s potential.
A biofuel revolution waiting to happen
The biofuel plant in Cradock has two phases. The first will import 225000 tonnes of grain sorghum from around the country and the second will use the produce of local farms, purchased by the department of rural development and land form. This will mainly take the form of sugar beet and will be turned into 90-million litres of bioethanol a year.
Retina van Tonder, head of green industries at the Industrial Development Corporation, said the short-term effects of the project on Cradock would be significant. The sheer level of investment would stimulate local business and in the 18-month construction phase 1000 jobs would be created.
After this the effects would be felt through the development of smallholder and commercial farming opportunities, which would provide preferred suppliers to the factory. One of the by-products would be 75000 tonnes of grain feed, which means local farmers would not have to import it from Gauteng. All of this would have tremendous benefits, said Wessel Lemmer, an economist at Grain South Africa.
“It’s a good thing that the government is doing here and we need to pat them on the shoulder.”
At full tilt, the Cradock plant and a private plant in Bothaville would buy 600 000 tonnes of sorghum a year. This would stimulate an industry that was in the doldrums as low prices kept farmers away.
It would also lead to the development of farms in rural areas where sorghum grows best.
The department of energy is set on regulating a 2% blending mix for bioethanol, which means 2% of the fuel will be ethanol. Lemmer said this number had to be pushed up to drive the industry even more.
The current lack of blending regulations was one of the factors delaying the Cradock plant, said Van Tonder. “They are essential to ensure that oil companies operating in South Africa are obliged to purchase locally produced bio-fuels.” – Sipho Kings