Cash makes you king

 This Article first appeared in FarmingSA issue April 2008 (Pdf link) and has been formatted for web viewing by Agristart.

Daniël Nortje, who farms on Sendelingsplaas in South Africa’s Northwest Province, recently also bought the farm Veeplaas in the Marico area. He is an inspiration to many new farmers. His recipe for success? Sound management skills and farming on a cash basis.

Besides applying for a loan to pay for my farm, I’ve never had to borrow money for anything else. When I plant my vegetables, chillies and other crops, I use cash. My eldest son Eshwel is in grade 12 and already farms 40 ewes. My wife Magdalena and I have two sons and two daughters. I was born in 1969 on the farm Sendelingsplaas in South Africa’s Marico Bushveld, where my mother, Mma Kokome, worked on the farm of a Mr Nortje. After school I completed a two-year course in agriculture at the Boschkop training centre.

Then I followed courses in vegetable, dairy and crop farming, farm management and artificial insemination. I got my practical training on the farm where I was born and worked as a representative for a local co-operative, NWK Ltd, selling maize meal and building materials in the communal areas. In 2001, I returned to the farm where I was born, taking the opportunity to start a fulltime career as a farmer. In the following year I managed to buy the farm and have since established myself as a vege table, dairy and cash crop farmer.

In 2003 I also bought a neighbour’s farm with a loan from the Land Bank. Two years later I started a company and got contracts for fencing and cutting the grass along the N4 highway. Last year I bought an irrigation farm consisting of portions of the farms Veeplaas and Venture in the wellknown Skuinsdrif irrigation scheme, using a LRAD grant from the Northwest Government and a mortgage bond from a commercial bank.

In September last year I got word that my loan and grant had been approved and immediately started planting cabbages and butternut. By the time that the farm was fi nally registered in my name in December 2007, I was already selling cabbages and butternut to markets in Zeerust.

Now I also get buyers from as far afi eld as Botswana and the fresh produce market at Klerksdorp. I made an arrangement that saves me a lot in transport costs and time. The local vegetable dealer regularly buys vegetables at the Klerksdorp market. I take my vegetables, packed and ready for the market, to him and he transports it to the market for a prearranged fee, which in turn helps him to cover his costs. My workers take responsibility for all aspects of my farming and business ventures. Two workers run the dairy and look after the dairy cattle and two run the vegetable farming with the support of extra workers.

A team runs and manages the contract to cut and bale the grass along the N4 and to do the fencing. The better they manage their responsibilities, the easier it becomes for me to manage them. That leaves me more time to negotiate new opportunities and to extend my businesses, creating income and more job opportunities. When you can’t manage something, outsource it to your benefit. I haven’t got the time and land to keep my replacement heifers. So I have an arrangement with a local farmer who raises them until they calve. Then I go and fetch the cows in milk, while he keeps and raises the calves. I replace some of the heifers with bull calves of my dairy cows calving at home.

Recently I planted 30ha of maize under a pivot on the new farm, paying cash for the total outlay. The money came from the sale of cabbages and butternuts from my new farm. I plant 15 000 cabbage plants every second month throughout the year and during September and January I plant 3ha of butternut, up to 15ha of chillies and several hectares of maize, sunflowers and fodder for my dairy cattle. I milk 58 Friesland, Jersey and Brown Swiss dairy cows twice a day. It was important to establish my own markets in the communal areas, where I put up cool tanks for milk being sold in shops. I established 18 depots in Dinokana, Ntsweletsoku and Vrede. Further contract deliveries go to the college at Lehurutshe and the ZCC church in the Madikwe area. I manage quite well with eight permanent and 16 temporary workers during peak periods.

My message to developing farmers is to create an immediate income from the farm. Don’t sell your assets to pay back your bond, but build your property to increase your investment value. Plan in time and follow your plans to make a success of your farming. Never stick to something that takes more out of your budget than it earns. And lastly, try to remain near your assets and play an active part in the farming.