The development of a methodology to evaluate business plans for land reform projects in the Western Cape with special emphasis on LRAD grant supported projects

Lombard, Christoffel (2011-03)

Thesis (MDF)--University of Stellenbosch, 2011.

Thesis

ENGLISH ABSTRACT: The main purpose of this study was to develop a methodology to evaluate business plans which support governmental grants to emerging farmers in the Winelands area of the Western Cape. The study focuses primarily on two types of emerging farmer groups namely (i) farm equity groups and (ii) individual farmers (less than 10 members per farm). Empowering disadvantaged people is exceedingly complex, therefore it is of paramount importance to compile a detailed and comprehensive business plan based on a proper feasibility study. If a project is not feasible on paper it will rarely succeed in practice. Four LRAD business plans per group were evaluated and have been scored against a contents list, which was compiled from an ideal farm business plan. This was followed up with a questionnaire to evaluate the current situation on the farms and to test the understanding of the business plan and its elements with the beneficiaries. There is a clear distinction in the quality of business plans between the equity scheme land reform models and individual farmer’s business plans. The quality of the equity farmer’s business plan was in most cases around 25 percent better compared to those of the individual farmers. The result of the study shows that there is a direct link between the quality of the business plan and the sustainability of the projects. Lower scored individual farmer projects under review, struggle to stay afloat with a weak cash flow as their main drawback. On the other hand the better scored equity scheme projects are much more sustainable; however more focus needs to be placed on developing the shareholders in the understanding of the financial side and land ownership principals. The author is of the opinion that only feasible projects must receive grant funding and this should be supported by good mentorship policies from government. South Africa can no longer afford “social business plans” in the land reform process; there is a need for sound farm business plans as a very important first step to feasible and sustainable farming ventures. The methodology developed in this study could become a valuable tool for government departments for directly measuring the quality of business plans and thereby indirectly the feasibility of land reform projects.

AFRIKAANSE OPSOMMING: Die hoofdoel van hierdie studie was om 'n metodiek te ontwikkel waarmee plaas besigheidsplanne geёalueer kan word vir die aansoek van skenkings (“grant”) fondse vir opkomende boere in die Kaapse Wynlandarea. Die studie fokus hoofsaaklik op twee tipes groepe, naamlik (i) plaas aandele skema groepe en (ii) individuele boere (minder as 10 lede per plaas). Die bemagtiging van opkomende boere is baie kompleks, daarom is dit baie belangrik om 'n gedetailleerde en omvattende besigheidsplan, gegrond op' n behoorlike ondersoek na die haalbaarheid, daar te stel. As 'n projek op papier nie haalbaar is nie, gaan dit nie sommer suksesvol wees in die praktyk nie. Vier LRAD besigheidsplanne per groep is geëvalueer teen 'n inhoudslys wat vanaf ‘n ideale plaas besigheidsplan saamgestel is. Dit is opgevolg met 'n vraelys om die huidige situasie op die plase te evalueer en die begrip van die besigheidsplan en sy elemente te toets. ‘n Duidelike kwaliteits verskil kan gesien word tussen die aandeel skema boere -en individuele boere se besigheidsplanne. Die gehalte van die aandeel skema boere se planne was in die meeste gevalle ongeveer 25 persent beter as dié van die individuele boere. Die studie kan 'n direkte lyn trek tussen die besigheidsplan inligting en die volhoubaarheid van die projekte. Die individuele boere- projekte onder oorsig sukkel om kop bo water te hou met 'n swak kontantvloei as hulle belangrikste nadeel. Aan die ander kant, is die aandeleskema projekte baie meer volhoubaar, maar meer fokus moet geplaas word op die ontwikkeling van die aandeelhouers se begrip van die finansiële kant van die boerdery asook eienaarskap op die plaas. Die tyd het aangebreek dat slegs haalbare projekte befonds moet word en dat die regering hierdie projekte moet ondersteun met goeie mentorskap beleid. Daar is nie meer plek vir "sosiale besigheids planne" in die Suid-Afrikaanse grondhervormingsproses nie. Goeie werkbare plaas besigheidsplanne is nodig as 'n baie belangrike eerste stap om volhoubare boerdery ondernemings daar te stel. Hierdie studie is 'n waardevolle hulpmiddel in die regering se hand vir die evaluering van besigheidsplanne van grondhervormings projekte.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/14635
This item appears in the following collections: