Namibia’s lucrative grape industry – who really benefits?

Aussenkehr-'World class' is how the Namibian table grapes from the Orange River valley are described, for not only are these grape vines highly rated in Europe, but the grape industry is said to be lucrative for the Namibian economy.

Indeed, these are simply delicious grapes which in monetary value are almost like diamonds that grow on trees. In fiscal year 2016/17, the grape valley harvested slightly more than 4,6 million cartons of grapes, which raked in N$600 million in revenue that year.

It was reported that in 2015 the grape industry employed 5 500 permanent and 6,000 part-time workers, a number that has increased since then.

Yet, despite the high number of employment, those working on the grape farms live in harsh conditions of reed makeshift houses with no electricity or potable water. The workers earn a basic wage that does not include fringe benefits, such as medical aid.

So, while the grape industry rakes in millions of dollars year in and out and creates much needed jobs, does Namibia get a fair share of the profits from grape sales or just crumbs of the cake?

Statistics from the Agro Marketing and Trade Agency indicate that 14 companies produced grapes for local and international markets during the 2016/17 harvest season, but only four of the companies are Namibian owned.

The Sonop Farm at Noordoewer is one of the few 100 percent privately owned Namibian grape companies, while the Namibian Development Corporation (NDC) with vineyards at Naute Dam, and the Orange River Irrigation Project under

Agricultural Business Development Agency are government entities.

The National Youth Service is in partnership with South African company Capespan in the Namibian Grape Company. The other farms are foreign owned.

While statistics for last season's harvest indicate that a total of 1,916.30 hectares of land is under grape production, the four Namibian companies cultivate only about 592 hectares of this, leaving about 1,324 hectares to foreign companies, mostly South African.

Karasburg West Constituency Councillor Paulus Efraim spoke of how he has witnessed the growth of the industry, from the planting of the first vines. Yet he says, despite such growth of the industry Namibians remain largely the employees and labourers, while the true owners of the sector are foreign companies.

The reality is we want Namibians to join the grape industry, we only have Namibia Grape Company, which is a joint venture with National Youth Service, and NDC. Other than that, most companies are foreign owned, said Efraim.

Efraim noted with concern that as most of the grape companies are foreign owned this means profits gained from the industry do not stay in the country, saying the only money that stays is salaries for the workers and that used to buy local materials for development of vineyards.

To be honest, most of the money, except the running costs and salaries goes to South Africa, not Namibia, he said.

Although he acknowledged that the lack of funds and knowledge of the grape industry might be a stumbling block to many Namibians, who would want to venture into the industry, he said Namibians should not use this as an excuse but should rather seek for ways to join the industry.

New Era understands that it costs roughly N$600,000 to develop land the size of a football field into a vineyard.

Efraim urged Namibians to use financial institutions, such as Agribank, to acquire the needed capital, or acquire land that they can develop through partnerships with local or international investors.

We want Namibians to stand together and get land, get loans and develop their land. This is the only way we can keep the money in the country. It is sad that some companies even take 100 percent of their profits out of our country, he stated.

Efraim also appealed on Namibians to study in the fields of agriculture, especially the production of grapes and dates, saying there is huge demand for these products and can they bring wealth to Namibians.

Asked what government has done to ensure Namibians become owners and not just workers in the grape industry, he said government came up with a programme to train and give land to small farmers for them to produce grapes.

But, he said, the programne is not bearing the expected fruit, as the farmers are not growing to be main role players in the industry, with many of them indebted.

In an interview on ownership with Sonop director Nico van Der Merwe, he said that although there was an increase in the number of Namibian owned companies compared to previous years, many companies remain foreign owned.

He explained that this might be attributed to the fact that it takes a lot of capital to develop a vineyard, money which he said many might not have, compared to foreign companies, which he said are already in the grape industry and have vineyards � mostly in neighbouring South Africa, and are ready to invest big and expand their vineyards.

I think the majority is still foreign owned, although there is an increase in Namibian owned companies. I think investment remains a challenge, there is huge amounts of money that needs to be invested in these projects, he said.

//Kharas Regional Council chairperson Jan Scholtz did not want to dwell too much on who owns the Namibian grape industry, but said there is a need to empower Namibians to actively participate in the industry, as big players and not just as workers.

He said the time is right for Namibia as a county to have an open conversation about ownership of the grape industry and move forward to see how Namibians can become part of the industry.

Empowerment of our people not only in the grape industry but overall is important, let us bring them into the economic mainstream. There is no right time, the right time is now, he noted.

Grape growers are hard at work and expect a bumper harvest this season, as weather conditions have been favourable this year.

Source: New Era Newspaper Namibia