Developing agro-villages in South Africa – dealing with wicked contexts and failure
On wicked context and failure
There is an unavoidable link between failure and trying something new. This was not always obvious to me. I have pushed limits, experimented, innovated, and sometimes failed. Let me start with how, in theory, we should think about experimenting and failure.
We shall experiment, in fact we cannot avoid experimenting, and we shall live with and embrace the uncertainties and failures this brings. Roger Schank notes that experimentation is something done by all professionals all the time, it is the thing we do to get experience. Every time we undertake a new project, take a new job or try a new way of doing things, we are conducting an experiment. But we do not carefully record the results after each action, and we do not run controls, and we mix up the variables by not changing only one behavior at a time, so that when we suffer from side effects, we cannot figure out what might have been their true cause. Every aspect of our professional life is an experiment that can be better understood and improved if it is perceived in this way. Kevin Kelly says we can learn nearly as much from an experiment that does not work as from one that does. That is a lesson from science that benefits not only laboratory research but any professional architect, electrical engineer, startup maven or microbiologist. What this suggests is that we should aim for success while being prepared to learn from a series of failures. Experiments can fail. Kathryn Schulz notes that that is not being pessimistic. Or rather, it is pessimistic only if we hate being wrong. If we think that uncovering our mistakes is a way to revise and improve our practice, then this is an optimistic insight.
All good and correct. That is how it is and should be. And how we should think about experiments and failures. But it certainly is not how it feels. Most of us have a good reputation with ourselves. We accept more responsibility for success than for failure, for good deeds than bad. We constantly practice our self-serving biases. We readily accept credit when told we have succeeded, attributing it to our professional ability and effort. Yet we attribute failure to such external factors as bad luck or the problem's impossibility. The question, what have I done to deserve this, is one we ask of our troubles, not our successes.
And this normally means that failures hit us hard. And that the failure is good for us approach is difficult to embrace. I, like anyone, would love not to fail and only be successful. Failures are never funny on projects where money or prestige are involved. Failures have real life consequences and is not something to wish for. But we do fail. And especially if we are an entrepreneurial go getter type, it is impossible not to fail because we run ahead of our experience-based knowledge, we take risks and chances, we are ambitious and driven, and drive people, processes and results. To fail in praxis is difficult. When I have failed, it has normally not been because I did not know how to deal with project management or how to handle the people or power aspects involved. And I know it has never been due to lack of effort, time or energy put in. It has been contextual in the sense that I had not fully appreciated or understood the up against’s, the big picture. This sometimes should have resulted in a no-go or step down, but because we normally take the opportunities that comes to us, this in my experience is rare. We are all under pressure from our surroundings, from the need to make money, to impress our superiors, from over-estimating our experience and abilities. But sometimes the up against’s are too big, too complex or outside our scope of experience and should have resulted in a decision not to pursue this opportunity or that project as the chances were too small, the issues too hard or fundamentally unsolvable. To avoid this type of failures requires maturity and experience, and mayby also financial security.
The key to start out on something new is to know what we are up against. This sounds obvious. And theories and methods have been developed to help us understand what we are up against. SWOT analysis to mention just one. But in my experience, the up against thing is likely the most difficult to judge when we start something new. Sometimes we do not even know we are starting out on something new as we think we have done this before. The problem is often that the context has changed but we did not see it.
The range of our failure’s spans from simple and shallow failures (our own inexperience or lack of exposure) to failures due to deep contextual complexities where the up against’s are unresolvable even for the most experienced professional doer. I have found the mental model of wicked contexts valuable to understand which type of failure we are involved in. When, just after the fall of the Berlin wall, I as a young consultant from Western Europe was working on a project to educate Russian top administrators and officials in modern western (capitalistic) administration, it was not working as it should. The reasons for this, especially in hindsight, were not a mystery: Differences in background, context and exposure. Now, it was a problem, it may even have been a hard one to solve, but it was not a wicked problem. For one thing, it is rather easy to describe. That, right there, boots it from the wicked category.
In wicked contexts it is hard to say what the problem is, to define it clearly, or to tell where it stops and starts. There is no right way to view the problem, someone can always say that the problem is just a symptom of another problem, and that someone will not be wrong. There are many stakeholders, all with their own frames, which they tend to see as exclusively correct. Ask what the problem is, and we will get a different answer from each. The problem is interconnected to a lot of other problems and pulling them apart is almost impossible. It is not possible to understand the problem first, then solve it; rather, attempts to solve it reveal further dimensions of the problem. It gets worse. Every wicked problem is unique, so in a sense there is no prior that will help us and solving one problem will not help us with the others. In wicked context the problem keeps changing on us. It is never definitely resolved. We just run out of patience, or time, or money.
In wicked contexts is has lightly been said that if anything can go wrong, it will; if several things can go wrong, the one that will cause the most damage will go wrong first; if anything just cannot go wrong, it will anyway; if you realize that there are four ways in which something could go wrong, and circumvent them, then a fifth way will promptly develop; left to themselves, things go from bad to worse; and if the experts have spent a huge amount of time and failed to find the answer, it will be immediately obvious to the first unqualified person asked.
If we could designate some professional problems as wicked, we might realize that normal approaches to problem solving here do not work. We cannot clearly define the problem, evaluate possible solutions, pick the best one, hire the experts and implement. No matter how much we may want to follow a routine like that, it will not succeed. Funders and institutions may require it, habit may favor it, the boss may order it, but wicked context and problems do not care. It would be good if we had understandings that divide wicked from tame contexts and problems. If we as professionals know how to distinguish wicked contexts and problems from the other kind, we will be better at understanding the limits of command and control. In wicked contexts, we can never invest too much in our ideas, because we know we will have to alter them.
The mental model of wicked context came to me late. In some projects I would have been better off if I had been better at analyzing and formulating to stakeholders the degree of wicked context I, we and the project was in. But, of course, not fully better off, as in the real world of professionals, failures have consequences, no one has the right to be wrong and no one has enough legitimacy and stakeholder support to try stuff that almost certainly will fail. In our professional world, failure is savaged, and the trier is normally deemed unsuitable for another try. Say wicked context and I say rural development projects in South Africa. My two agro-villages were anchored in wicked contexts that I should have been better at identifying as wicked to make them less stressful, less painful and more manageable, especially at the personal level. As a professional entrepreneur it is very difficult to exist in wicked contexts.
All projects follow the project cycle of plan, implementation and evaluation. This also includes the two rural development projects I was responsible for from 2012-2017. Both projects were planned as rural development poverty alleviation projects, both became extremely complicated, and both failed when they went from the construction to the operation phase. One was the Tshwane Food & Energy Center.
Tshwane Food & Energy Center, an agro-village - The plan
The objectives and plan as stated in the business case went like this: Agricultural production in South Africa is dualistic comprising a large-scale commercial sector and a large group of small-scale black subsistence farmers. South Africa has the best performing agricultural sector in Africa, but the small-scale farming sector has not shared in this success. The Government has initiated numerous development programs and spends each year billions to enable small-scale farmers to integrate into the commercial farming sector. The Rural Development and Land Reform Department has transferred 6 million hectares of land to over 200,000 beneficiaries. These empowerment initiatives have generally been unsuccessful, thus relatively little progress has been achieved in transforming the small-scale farming sector. This has been aggravated by the transformation of most value chains from local procurement to centralized or contractual systems, which hampers small-scale farmers’ capacity to participate in modern supply chains. Small-scale farmers is not able to attain the quality, safety, quantity and consistency levels required in their supplies.
It was in this context that the City of Tshwane, 25 beneficiaries and Innovate Farming Systems (my company) in cooperation planned an ambitious public private sector project. The key objective of the Tshwane Food & Energy Centre as an agro-village was to make small-scale farmers profitable and sustainable through strategic partnerships, market access, application of the bulk buying-selling model and linkages to renewable energy.The project built its approach on international successful experiences with secondary cooperative farming and combining farming development with renewable energy production.
The aim was to take the small-scale farmers to the real market through scale and standardization. The intention was to build from scratch a model agro-village consisting of 25 farms and with these 25 farms establish a small-scale secondary cooperative. Each individual small-scale farmer should be dependent on their own production results to ensure high motivation, but all farmers should accept quality control and follow management systems provided by the central farm management. The sustainable operation of the central farm was a key issue in the concept. It was crucial that enough income was generated for the central farm to effectively operate and maintain the required supporting structures. The central farm was to become sustainable through production and income generated from a model farm (an additional 26th small-scale farm) and through a fee placed on all sales. The fee should cover expenses for all individual farmers in relation to feed, new livestock, transport to market, marketing, veterinary services, common infrastructure and business support. This system should secure scale and continuous delivery of high-quality livestock to the market and quality feed and genetics to the small-scale farmers.
When small-scale farmers in rural areas sell their produce, they normally have little choice of whom they sell to or how much they sell for. Typically, farmers sell their crop at a low price to middlemen. To counter this were sales planned to happen through off-take agreements with major retailers, and the central farm to gradually establish own retail outlets for direct marketing and sales. Furthermore the small-scale farmers would be given a head start through grant funding of all establishment costs, the first production cycle and built-in reduced operation costs in relation to feed (bulk-buying), electricity and water (own internal renewable sources) and transport (own transport vehicles). The intention was for my company to provide long term business and operation support to the small-scale farmers.
The total budget for the development was R49,9 mill, whereof my company as strategic private public partner co-funded R5,2 mill. For this combined budget we should complete construction in year one, initiate farm operations in year two, and become self-sustainable in year three. For this budget we, free of charge for the beneficiaries, should establish: 25 small-scale BEE farms with a 200 m2-covered chicken-growing building with a standing stock of 2,500 chicken, a greenhouse of 300 m2 and a 72-m2 housing unit; a 300 m2 central farm, including training, community, information and visitor center and offices for management and staff; a 300 m2 centralized workstation for feed, equipment storage, tractor for waste management, truck for delivering chickens and vegetables to market, 3 cooling rooms, heating and spare equipment; a central farm training farm managed by IFS; roads, electricity and water supply to all buildings, including boreholes, piping, transformer, power lines, connections; 25kV PV solar power plant at the central farm for electricity, heat and light for all buildings and farms; 150kV biogas facility operated from own and external organic sources and utilized for electricity and water supply; 120l solar water heaters and 5m2 rainwater collection tanks for individual and central farm buildings; and a 600 m2 market hall as retail center for marketing and sales of own and others produce. My company IFS should be overall responsible for construction, while subcontractors should be utilized for specialized works. The construction should happen through employment of manpower resources from the group of 25 beneficiaries and their families and create 90 full- and part-time jobs.
That was the plan, the intentions we had. We hoped for a flagship project that for the money, time and energy we put in would have national impacts. I hoped to be involved in further roll out of Food & Energy Centers both with the Government and in the private sector through privately owned bonded small-scale food and energy centers. This was my idea, my concept and I had big hopes and ambitions. I wanted to invest money, energy and time to make not only this food and energy center a success, but to make it a platform for my own expansion within the agricultural sector. A platform that could take me from not only winning tenders and government projects but to also develop bankable sector agro-village projects.
Implementation – construction
The project was launched in 2016 by the City of Tshwane with more than 1000 participants, high-level ANC politicians and governmental officials during a 1-day event. We had made it on time, on budget, and as planned and designed. The City and I used the planned construction budget to complete the development of the 26 farms, the central farm, renewable energy production and all planned supporting infrastructure. A workforce of 50 were employed on site, of which 90% were from the adjacent Rethabiseng and Ekangala townships. I only had 3-5 staff on site at any one time. The project was in the truest sense implemented as a local project with township resources, manpower, suppliers and small-scale black contractors.
And the result was a beautiful agro-village. A central farm building with a distinct curved roof, and 25 cozy livable farms each build around a courtyard. Live Work Play in one place, and green energy all over the place. The agro-village on that opening day was a true flagship project. We were all tired, proud and happy. We made it. Some were surprised we got this far. They knew the context all too well.
The project was located adjacent to the Rethabiseng and Ekangala townships 30 km outside the City of Tshwane. The area had a poor track record for completion of governmental construction projects. This I did not know. The mayor had chosen the site for political reasons. This I did not know. The beneficiaries were chosen by ANC and where mostly ANC comrades. This I also did not know. Many things I did not know. We were thrown in at the deep end and started construction. But not with the beneficiaries and their families as planned. During the initial planning meetings with the 25 farmers, the larger community got news of the project, and they called for community meetings to hinder that the beneficiaries should be the ones to undertake the construction. They put pressure on, got what they wanted, and we employed 50 community members they had selected.
During the first week of construction, I had a visit from Boko Haram. I had established a container office at site and was having a meeting with my team and the community representatives. In came 9 young men, which in a demanding tone said everyone but me should leave the office, closed the door, and told me I had to employ them as sub-contractors on the project or else. They said they were a local business group called Boko Haram representing the community. I said I could not do so, as this was a community project where we already had employed community members through a long process. After an hour of shouting and threats, they left.
Thereafter over the next three months Boko Haram regularly came to me with their demands, I stood fast and my team with the 50 community members continued construction. In the beginning with a good speed but then slower and slower. Most of my team had moved to the township, and they slowly became a part of the furniture. And after a couple of months, we lost direction, speed and focus and I could see we would not be able to finish on time and budget if this continued.
During my encounters with the Bokos I got to know them, and they started to tell me local stories. From our site, we could see three construction projects, a school, a community center and a library, all projects they had vandalized and blocked. That was two years ago. They were very strong in the area. For many reasons, including the anchoring and alliances I had created, I knew they would not close our project.
Four months passed, and I had to take a decision on our lack of progress. The construction was at a critical point, I could see it was slowly failing, and I had to take chances. I called Boko Haram and asked these 9 young rebels if they could complete the works. To ask Boko Haram to take over was a huge risk. I said we would keep the 50 community members, I would fire my entire construction team and they would take over construction management with me and my engineer as back stoppers. They said yes and hit the ground running. Within the next 4 months they completed the construction. They were a wild gang, and nobody believed they would actually do the job, but they did. They all bought a new car for themselves. And showed off. I was proud of them. I liked many of the Bokos. They had helped me, the project and in the process made some money. Nothing wrong there.
The four months went relatively quiet, external contractors was used for the complicated components, and Boko did the rest. The problems of theft, however, started to come to the surface. Not for the Boko structures, I think their reputation deterred any to try, but for the structures built by others. The PV solar plant were erected one afternoon, and the following morning all panels were gone. In small communities everyone knows everything, and I had some on my side that easily could tell me who did it. And it was not the Bokos but some of the beneficiaries. I knew who had stolen the panels, in which houses the panels was stored, and I reported this to the police, they wrote the case down, and then nothing. They never visited the houses I had pointed out. PV panels is candy for thieves as they are very easy to sell, so when we launched the project, I had procured new panels, put them up for the day, and in the evening took the panels down and stored them at a secure place.
After the launch only a couple of construction issues remained, mainly the completion of the market hall. I had procured all materials and kept a small budget of R150,000 for the final completion works. And it was then that things started to spiral out of control. Boko Haram knew the project was coming to an end and that the remaining budget was very small. And then they went from collaborators to opportunists, from friends to enemies. First, they went to the City saying that I owed them R1,2 million. I have a lifelong commitment to not owe anybody anything, neither privately nor in business. I pay what is due, whether deserved or not. And I have developed some pretty strong defense mechanism in relation to this. I have learned that one of the few things that cannot lie is bank statements. In my business everything is done by bank transfers, each transfer numbered, with invoice and proof of payment and related to signed contracts of suppliers. Clear and simple. I had provided the City with copies of our financial management systems linked to bank statement payments and audited accounts. The expenditure details for the project contained 1,612 bank transfers covering utilization of the full project amount. Each of the 1,612 expenditures was related to approved budget headings and verifiable bank transfers. I knew exactly how much the Bokos had been paid in relation to the contracts they had signed. And I owed them nothing. And it was easy for me to prove. Still, they tried, but got nowhere with the City.
Then they reported me to the police, same story, I owed them millions. And this time the police reacted, I was called for interrogations that all went like; this is my documentations, please show me documentation of your claims, silence followed by shouting, accusations and threats in front of the head of police. The Bokos clearly knew their way around the police quarters. The head of police ended each meeting with a ‘be certain that I will investigate this thoroughly’. I never heard from him. The stress of going through this was intense. I am not a regular at the police. For the Bokos it seemed like standard procedure. We will give it a try and if it goes it goes. On the way out of the meetings with the police, they would casually say, by the way, do you have any other work for us.
Most of the local suppliers to the project acted in a similar way. At the time I wrote this to the City: ‘We have contributed to local economic development by allocating more than 80 % of the total budget to local township beneficiaries and contractors, and we have paid in full each and all local beneficiaries and local contractors. The area is, as has been reported in several progress reports, highly volatile and violent, and if we had any outstanding this would risk the safety not only of our company but also of our employees on site. This is the reason we only deal in verifiable bank transfers for all payments, which make any dispute easy to resolve. And we have had many of these claims. It occurs all the time that local recipient takes chances to claim payment have not been received, increase claims, dispute signed contracts, dispute extensions, claim bank fraud for not having received payments. We have found these baseless and reoccurring claims extremely tiresome and stressful. I have recently been informed by the City that Bheki, a local contractor, has complained to the local political councilor and the head of the district administration that he had not been paid. I attached to the councilor and the local administrator the signed contract and verified bank transfers for the works undertaken by Bheki which showed that the contracted amount was R199,980, but the payment transfers was R217,090. The overrun was caused by me giving in to his unending complains and threats. Bheki also claimed that he had not received an amount of R105,000 due to bank fraud. I launched the case with the police and the banks, and spent months on the case, until I gave up, and paid Bheki the R105,00 once again, in total R322,000. And he still lays complaints about me to the city, the local politicians, the district, and the police’. And so it went, from one energy sapping complaint to another.
The market hall was never completed. I think Boko Harams 9 new cars had something to do with it. Boko Haram had control over the situation until they lost it. First an even younger group, the Nyaope Boys, came and wanted a bite of the cake. They challenged the Bokos. 12 kids 15-19 years old, all clearly damaged by drugs (Nyaope means drugs), came to me and said that they also wanted contracts. The Bokos was coming under pressure, and these youngsters were unpredictable. I said the budget was running out, but if they could agree with the Bokos, they could get some of the remaining works for the market hall. But before I had established a joint work force of the Nyaope Boys and the Bokos, all hell broke out. The Panama gang entered. This gang came to me, and requested a slice of the market hall contract. I, again, said the contract was very small and there really was nothing in it for them. The Panama gang were the big boys, connected higher up than the Bokos and even closer to the police and top politicians. I received these emails from one of the local community members that worked onsite on the completion of the market hall: “Sir on the issue of Bokoharam and Panama, there is a lot of fight between them to extend that a lot of people have been injured and some have also been arrested by the police. So in conclusion, Panama is trying to get rid of Bokoharam from stopping all the projects around, and maybe that can help, If only Panama will achieve that then we might have a chance to complete”. “Good day Sir. It happens to be that, presently all the workers are afraid to work in that building because Bokoharam and Panama are fighting over the projects around, to extend of beating and harassing all the workers, also Lucky has been stoned. It has reached the point of gun and some of the Bokoaram have been injured and some have also been taking to the hospital. We had three times meeting with the chancellor and still she couldn't handle the Bokoaram, instead Bokoharam promised to burn her house. So now we don't know what to do, we are shocked Sir” Shortly after, the Panama and the police came to the area one early morning, beat up the Bokos and the Nyaope Boys, left one dead and the rest ran (they came back 6 months later, I know as I was still there, trying to grow chickens).
I wrote to the City: ‘The market hall works, however, has violently been stopped on 4 occasions, by the Nyope Boys, Boko Haram and Panama, and it has been impossible for us to complete the works without risking the safety of our staff. We have requested police protection to complete the works, but this request has not been granted. The works has been stopped under very violent circumstances, and both the staff on site and I have received threatening phone calls. Several groups on location request to be granted a contract for the remaining works, and we are in the middle of these expectations and threats. Several meetings with the local groups involved, with the police commissioner and local community leaders have been held, but without a resolution of how the works shall be completed without local groups hurting each other or our on-site staff. We have the planned and agreed upon budget of R150,000 in our possession for the completion works but is in no position to activate the funds without stabilization of the violence onsite.’
The construction phase with the attempted completion of the market hall ended in chaos. Nobody dared to enter the arena. Despite all the conflicts, fights and chaos, we managed in the main to complete the Food & Energy Center. I had sufficient experience in dealing with people, even complicated ones, understanding agendas, mostly the money one, in negotiating, balancing and still getting there. I had enough muddling through experience in adjusting, giving in, going from problem to problem, putting out fire after fire, and still get where I wanted us to end up. The reasons for all the challenges, especially in hindsight, were not a mystery. They were stressful, they were hard to solve, but, apart from the completion of the market hall, they were not wicked unsolvable problems. Still, for the construction component I was thrown in at the deep end by the City, the Mayor, the politicians and everyone that knew the local context. I found out the hard way that the construction mafia in South Africa is a real thing. I began the project by thinking I knew the context; it was first later I sat down and studied the local and national context for construction projects in volatile areas.
The local frame for the construction of the Tshwane Food & Energy Center is well reported by newspapers from the same period: “Boko Haram is a notorious Tshwane gang that took its name from the Nigerian terror group (with no links between the two). To township residents, the gang is synonymous with extortion, death and anguish. It started as a forum for young businesspeople but morphed into a criminal gang, demanding businesses pay a protection fee and forcing construction companies to give it a cut in infrastructure projects. Tshwane West (where my project was located) has turned into a lawless state, and residents and businesses alike are living under a cloak of terror as gang activity runs rampant. The infamous gang dubbed Boko Haram continues to infiltrate all sectors of the townships, with guns in hand, demanding payment for business protection. They hijack buildings, kick service providers out, and threaten and kill those who stand in their way. Residents clams up as talking about the gang is not an option as it means death. The situation has become worse over the past three years. And there is no action from the police. There are many cops who are in cahoots with them. They get brown envelopes to look the other way.”
“Gangsterism has sprawled all over and besides Boko Haram, the Farasai and Al Qaeda gangs also terrorize our townships. These three gangs deal in different crimes. Farasai mostly deals with murder for hire. They can be rented for as little as R5,000. Al Qaeda deals in drugs and is behind most car hijackings while Boko Haram is famous for extortion of all kinds and construction contract hijacking. Last year, the area saw a series of gang-related killings, which left nine people dead. The murders have been linked to gang warfare between the Boko Haram gang and a breakaway group. An informal settlement community leader said: I am happy that Boko Haram are being destroyed. Those guys beat me up at a community meeting in broad daylight after I contradicted former City of Tshwane mayor Ramokgopa regarding service delivery issues in our community. I laid a charge at the police station, but those thugs were never arrested. What goes around comes around. My father will rest in peace knowing that his killers are also dead. But he would probably be disappointed to learn that his killers were associated with the ANC. I have suspected all along that the ANC was shielding these chaps from arrest. Boko Haram is obviously contributing to the coffers of the ANC with the loot from fraudulent tenders and extortion money. A national ANC minister said that an element of thuggery had infiltrated the ANC in Tshwane, we have funny characters and names and organizations called Boko Haram, which members have formed a faction of the ANC.”
The local frame is mirrored in a national frame. The following are extracts from a research paper on the construction mafia: “South Africa’s construction industry is struggling with intimidation, extortion and violence on construction sites. The construction mafias who are responsible for this intimidation have become widespread since their first appearance in KwaZulu-Natal. Today, these groups have become deeply entrenched in the construction sector. In 2019, at least 183 infrastructure and construction projects worth more than R63 billion had been affected by these disruptions across the country. The construction mafia are operating under the banner of radical economic transformation, and they present themselves under the guise of local business forums. The tactics used by the construction mafia include sub-contracting demands, charging protection fees, and holding construction sites hostage if companies do not meet their demands. The groups are characterized by their use of violence to get their way. Police is doing little to nothing to fight the construction mafia. Several of the construction mafia groups have clear links to provincial politicians and municipal councilors. Many construction companies have given in to paying companies owned by the gangs to protect their developments. Companies that chose to negotiate with the construction mafia unfortunately lend them a veneer of credibility and further cement their role in the construction sector.”
Surrounded by the construction mafia, I negotiated, fought, incorporated, adapted, included, cooperated, befriended and gave Boko Haram contracts and credibility, and got the construction to where I wanted. Not so for the farming operation, which proved to be anchored in a real wicked context.
Implementation – farming operation
At the time the construction phase escalated into chaos, I initiated the next phase of the project, the farming operation. The farming operation strategy was from the outset clear: 25 beneficiaries should be selected by the City and these 25 individual farmers should be made operational and linked to the central farm, each farm having a stock of 2,500 chickens and 300 m2 greenhouse production, resulting in a total Food & Energy Centre standing stock of 62,500 chickens and 7,500 m2 of greenhouse production. Each farm and the central farm should reach positive profit from year 2 onwards. Each farm should reach an annual turnover of R600,000. Each farm should be supplied with heaters, feeders, drinkers, partitioning, feed, medicine and seedlings from the central farm for the first production cycle. Each farm and the central farm should be registered as individual Pty Ltd companies. The central farm should become sustainable through income from the training farm and a fee placed on all sales. The central farm should be managed by a full-time experienced IFS central farm project manager and 5 IFS staff. Farming Operation Contracts and Rules should be signed with all farmers. The central farm should provide off-take agreement. A management board should be established to guide the direction and activities and the farmers should establish a producer association to represent their interests. IFS should provide technical and financial training and mentoring to all farmers. 131 permanent jobs should be created.
That was the objectives and deliverables. How did it go?
We started by undertaking a local market survey to update and verify the initial business case figures by comparing pricing of different chicken and vegetable products in the market. The survey showed a market with pricing of R40 for frozen chickens, R50 for live chickens, and average R10 for vegetable produce. The survey also showed that pricing on the local market was related to units not weight. Based on this was the farm base case financial model finetuned and shared with all farmers before upstart. The baseline showed a sustainable business case with a profit per farm per 6-week cycle of R12,466 or R99,735 profit per year, which was a very good income for a small 2,500-unit chicken farmer. These data were used as base case monitoring of the operations. I knew, and had shown to all, that if we got it right, the farmers would make good money and be sustainable. Then farming operations started.
Production cycle 1: The first test cycle brought warning signs. The first production cycle was used as a training and market access phase. Each farmer was provided 1,000 chickens, feed, bedding, medicine and all other cost for production. The cycle provided all 25 farmers with 6 weeks of hands-on chicken management experience. All came through, with varying success, but in general within expected quality and outcome standards. The 20,300 chickens produced gave the market a taste of the Food & Energy chicken and gave us experience in market access and sales.
Chickens was agreed to be sold through the central farm, but many farmers chose to sell their chickens directly to the market, out the backdoor so to say. Chickens not sold directly by the farmers went through the Central farm to the abattoir, was returned, kept frozen in our cool room, and then sold to the central farms bulk buyers. The market hall was not completed, but we could see that the best prices was achieved by direct sales to the market, and we established 3 food stations (container shops) covering 3 townships. Sales that went through the central farm and the food stations, was returned to the farmers excluding the agreed upon central farm operation fee, which was used for central farm costs, mainly electricity. Of the 25 farmers, only 2 farmers choose to deposit money on the central farm account for the next cycle, the remaining farmers kept their turnover.
The first cycle saw 2 board rotations due to in-fighting between different fractions of the farmers. There where the Rethabiseng and Ekangala township fractions, there was the ANC member and non-member fractions, there was the farming experienced and non-experienced fractions, there was the young and old fractions, the woman and men fractions. And there was constant quarrelling, voting and change in the farmers management structure.
The first cycle showed that 10 farmers were active and committed, with the remaining 15 not so much. The first cycle also revealed serious issues around sales, feed consumption, savings, sharing and data collection. Chickens were sold out the back door, and not through the Central farm as agreed, which meant that the income to the Central Farm was much less than planned as farmers kept their income and did not pay the agreed upon central farm fee. The planned central operation expenditures were overrun by more than half a million, mainly due to over-consumption of feed. The cycle had shown an urgent need to improve data collection and monitoring. I fired our central farm manager and recruited a new on-site central farm manager to improve data collection and monitoring.
Production cycle 2: A fall into chaos. The second cycle was initiated, took 4 months to get through and it ended in chaos. It was agreed that the cycle should focus on collection of better production and sales data as only through data could the overall system be managed and continuously improved. It was also agreed that the cycle should focus on sustaining and expanding the market through the central farm, as this was the only way to establish scale and sustain the bulk-buying bulk-selling model.
Cycle 1 showed that it was impossible for the central farm to monitor or police sales, and a new looser standard operation procedure (SOP) was agreed. Chickens could be sold directly from the farm by the farmer, or through the central farm live via its food stations, bulk buyers, or through the abattoir and frozen sales. The farmer should follow the sales of own chicken, and when sufficient monies had been accumulated at the central account (either deposited by the farmer or through the central farm sales) the farmers third cycle could be initiated. The cost to start the production of one chicken was R32, which meant R32,000 was required to start a 1,000-chicken third cycle (the R32 per chicken was only achievable through bulk procurement, otherwise the farmers would have to pay close to R50 for input costs and there would be no business). Cycle 2 was the cycle to achieve sustainability and profitability. The key, which was continuously communicated at all meetings, was cash management and adherence to individual farm budget figures for the cycle. The cycle should move the farmers from receiving grant money to own management of cash and savings for the startup of the next cycle.
In the second cycle each farm also received 1,000 chicks and all production costs. The central farm got all farms in operation, with two farms added each week. Key chicken operation data were collected weekly, printed, distributed and discussed between all farmers on general meetings. The data collected included mortality rates, feed consumption, average chicken weight and feed/weight correlation data, chickens taken to abattoir and chickens sold live.
After the first 18 farms had been put into operation we had series of data, and a status meeting was held. The data showed that the mortality and weight gain levels in general were acceptable. The daily feed consumption as reported by the farmers were well below the planned for the cycle. However, the data for actual delivered feed to the farmers on the contrary showed a serious over-consumption of feed. 10 of the first 18 farms had over-spend on feed, 5 farms had serious overspending and the high figures indicated stealing and on-selling of feed. Some of the farmers had received more that 5,5 tons of feed, which was well above the allocated amount of 3,3 tons and well above what 1,000 chickens can consume in a cycle. For the overall fixed budget for the cycle to be sufficient for all farmers, the serious over-spending farmers were asked to be paid back to the central farm. If not, there was no feed budget for the remaining farmers in cycle 2. But the overspending farmers were not willing to repay, which meant there was not enough budget to procure feed for chickens already in operation and for the farms that had yet to receive chickens.
The mid-way status showed serious lack of income management, stealing and non-adherence to the agreed upon standard operation procedures. Only 3 farmers had chosen to provide chickens to be sold through the central farm, while the other 22 farms had chosen to sell all their chicken live and keep the income. None of the 22 farmers had contributed to any central farm operation costs such as electricity or fuel, and none adhered to the contribution rule. Only 3 farmers reported they were financially ready to start cycle 3.
The situation was serious, especially as a group of the farmers had decided not only not to comply with the operation rules, but also negatively influence the farmers with an interest in farming. The political troublemakers in the farmer group continued throughout to be a problem. I found and reported to the City officials that if this issue was not resolved, the project would not be able to find a stable foundation where the farmers interested in farming were allowed to focus on farming. Cash management was the only and very concrete way forward for each individual farmer. However, internal dynamics confused this simple issue. Some of the farmers that had not saved were utilizing old divisions in the group to create unrest and divert attention away from the simple issue of cash management, money saved and deposited at the central farm.
The performing farmers started to take precautions. As feed management had become such a big problem, we first installed welded locks at the central feed silos. These were clipped and feed continued to be stolen by some of the farmers, even at this stage where they knew they were stealing from their neighbor farmers that had not yet received their 3,3 tons. At one of the feed deliveries from the bulk supplier, the farmers gathered around the feed silos and physical fights broke out. I called the police to come calm down tempers (they did not come). The performing farmers wanted their full allocation. From there on each delivery was off loaded in the presence of all 25 farmers, put into 40 kg bags and distributed on the spot.
As the many non-performing and stealing farmers began to realize that cash deposits were the only way to enter the next cycle, they started to hit back, accusing all and everyone, the other farmers, the central farm manager, me. We have not been informed, we have not been trained, the water system is not working, our chickens are dying, we have no electricity, we need additional support, the city must allocate more money, the central farm staff is not qualified, the central farm manager or Elizabeth in charge of the cool room with the frozen chickens is stealing from us, and on and on. They came hard. Meetings got heated, between the different fractions of the farmers and between the non-performers and me. Shouting, threats, walk outs. They reported their issues to the district, to the councilor and all the way up to the mayor. All to divert attention away from the fact that they were not able to join cycle 3 because they had spent their income. And every time it put me in a bad light. They claimed they were owed money by the project. 2,500 chickens were included in the operation budget within a total operation budget of R1,4 million for the first two cycles. The problem was that we had seen a heavy overspend on many operational budget lines, mainly feed, but also gas, heat and drinkers, so the operational budget was exhausted, even before the last 6 farms in the second cycle were put in operation. We had to use some of the contingency budget to make sure the last farms had enough feed. Still the under-performing group of farmers claimed they had only received 2,000 chicken and wanted the remaining 500 chicken. Or money. This issue also went all the way to the mayor’s office.
However, money talked. All farmers had received a farm for free, two cycles of 2,000 chickens with all costs paid, and a verifiable income of R40,000-R60,000 for each farmer. I therefore knew the farmers were able pay the R32,000 required to join cycle 3. And if they did not, they had to leave the project, and this had been continuously communicated by me and some of the City officials during the first two cycles. The business case and the first two cycles had shown that the farmers in this secondary cooperative system could make money, indeed very good money. Clear data showed the substantial income and profits made, that the farmers could manage and operate the chicken farms on a sound technical basis and that the market was sufficient and sustainable.
The closer we got to the third cycle the more chaotic it all became. First came the breakdown of the management structure. The management structure became the arena for conflicts, backstage power games, outmaneuvering’s, voting at general meetings and take overs. Whoever was in charge, chairman or member of the board, was continuously being challenged by other fractions of the farmers. This resulted in constant changes as farmers constantly challenged any management structure, central manager or staff on the farm. It resulted during cycle two in three different management boards, discharge of all beneficiaries working for pay at the central farm, discharge of almost all my staff working at the central farm, discharge of my engineer. It became a case of anyone being involved in central farm functions either being fired or chased away. Some of the farmers physically threatened the bulk service providers. General meetings spun out of control with insults and threats flying around.
Then came a drastic escalation of theft. I reported 17 cases of theft to the police during this cycle. Statements taken, case files opened. The City and the local politicians informed. And these 17 were just the tip of the iceberg. Theft became a serious operational issue. The theft was linked to the non-performing farmers. We all knew who did it. But a peculiar hands-off played out. The farmers did nothing. They just let it happen, whether involved or not. I knew who did it and I could not do anything but run to the police. The central farm office furniture and fridge was stolen. Electrical cables were removed resulting in no electricity being supplied to the 25 farms. The two borehole pumps were stolen so no borehole water could be supplied. The transport truck disappeared, apparently stolen. It was later located in Cape Town 2,000 km away and returned. The farmer that had been given the central farm driver task thought it a good idea to make a short left to the other side of the country.
Then came demands and cheating. We planted sorghum for the biogas plant operation. Two of the best farmers was selected to take care of soil preparation, planting and harvesting of 6 ha of sorghum and were allocated a budget for the task. It later showed that they only planted 2 ha and had cashed in. A group of the farmers continued to complain that their houses had no curtains. They were allocated a budget for curtains but only managed to do their own before confusing stories of money lost on the way from the bank was launched, and the curtain story ended there. Then it was cries for a fence around the plot, for a TLB to remove rocks on the ground. Two farmers complained that they had no water even when the borehole and water supply system was working. After inspection and digging it was found that some farmers located at the far end of the water pipe, where pressure was lower, in the night had disconnected these farmers to increase their own pressure. Trust dissipated and disappeared.
Then came serious farming malpractice. All non-performing farmers had chosen not to stay at the farm but instead in the township resulting in their farms not being taken care of. Farms were left unattended. The place started to feel aborted. Weed started to appear. Some became landlords as they hired staff to stay at and operate their farm. This did not work. They paid too little, and the hired staff had no training or knowledge of farming. One farmer received his 1,000 chickens but decided in the second week of the cycle to disappear for 5 days and leave the farm behind unattended. I was called to site, we opened the door, and saw the massacre that had happened. The 1,000 chicks had starved and begun to eat each other, only a few was still alive, the smell was indescribable. Another police report launched. He came back, joined the group again and demanded to receive the 500 outstanding chickens and be included in cycle 3. Nobody said anything.
Then came a breakdown of the whole renewable energy operation due to theft and non-contributions to the central farm operation costs. The PV solar plant never became operational due first to theft and later just to the risk of theft, but the biogas plant became operational and for some months powered the electrical grid, the borehole pumps and the water pipes going to each farm. We had secured an agreement with Tshwane Fresh Produce Market 30 km away to collect, free of charge, organic vegetable waste twice a week. The small amount of sorghum grass planted across the road was harvested and placed adjacent to the biogas intake tank, chicken dung was collected from the few farms in operation. This organic material was placed into the intake tank, shredded and circulated into the biogas digester. Biogas production started inside the digester and the 100 kV generator was put into function and provided enough electricity for the 26 farms and the borehole pumps providing free electricity and water to the farmers. Bliss. However, theft of cables, power control system and pumps soon stopped the biogas production, and the project had to return to expensive grid electricity and water supply, close to R70,000 per month.
Then came a constant harassment of the performing farmers. Their water pipes cut, chickens and feed bags stolen, heat equipment not rotated as agreed. The performing farmers had to secure 24-hour presence at their farm and were in constant quarrels with the other farmers. And then there was the headless chicken, me, running from one problem to another, trying to put down fire after fire.
The end of the second cycle was crunch time for each farmer to demonstrate that they could manage and survive the transfer from grant funding to sustainable operation. It showed that only 6 of the 25 beneficiaries were able to make this transition.
Production cycle 3 onwards: Survival of the fittest before collapse. With only 6 farmers left in operation, new simplified standard operation procedures were put in place. The central farm should procure bulk feed and 1-day chickens. Other costs should be borne by cash payments directly by each farmer. A cycle would only be initiated if the six farmers had placed in the central farm account R121,000 for bulk procurement of feed and 1-day chickens. The number of chickens procured per plot should be based on cash made available. The amount of feed procured should be number of chickens times R17,8 covering starter, grower and finisher feed. 1-day chicks and feed should be delivered in bulk once and for the full cycle and the amount of feed procured by each farmer should immediately be put in 40 kg bags and taken to the individual plot for storage and use for the full cycle.
The 6 remaining and serious farmers, mostly women farmers, had shown real commitment and technical farming and financial skills. For the project to have a chance to survive, it was imperative that full support was provided to these few active farmers, including dealing with the troublemakers, the non-committed and non-paying farmers that continued to create a hostile environment. For the 19 non-performing farmers I therefore (naively) proposed that these should leave, and new farmers should be given a chance. The first selection of beneficiaries had clearly included people not interested in the business of livestock farming but more interested in politics, grants and free opportunities. I proposed that the selection of new farmers should focus on motivation and willingness to contribute. This should be done through open tender for participation, proven previous livestock farming experience, willingness to sign the standard operation procedures, and contribution of R11,500 cash for procurement of 500 chickens for the 1st cycle. I also proposed that we should find a farmer for farm 26. This extra farm that the central farm should operate were never taken in operation as nobody could take a decision on who should operate this farm. I was not allowed to select a farm manager, the farmers could not agree on who should be selected, the counselor did not want to get involved. Farm 26 was therefore never allocated or put into operation. I hoped that the City quickly would implement these measures. None of it ever happened.
The City made a small attempt. The 19 farmers were told in April 2017 to pay an obligatory monthly fee of R2,000 to stay in the project, which should be utilized for operation of the central water, electricity and transport infrastructure. Only 4 paid, and only once. The City stood down on the requirement on having only active paying farmers involved in the project. This meant that from May to October 2017, when I left the project, no income from the farmers was deposited into the central account. This again meant that the central functions would stop from May. I, however, decided to pay the central farm costs by own means from May to July. This covered costs for the 3 local biogas plant staff, petrol to procure feed and 1-day chickens, petrol to go to Fresh Produce Market twice weekly to collect feedstock for the biogas plant, repairs and replacements of the most important stolen equipment. The central functions had continuously been adjusted downwards and been reduced to an absolute minimum. At the end only 2 farmers provided input and support at the central farm level. I had come to accept that the resistance and non-compliance with even the smallest amount of central structure was pervasive, and that no management structure would be able to do the trick. In August I also stopped paying, and the central farm collapsed.
I continued to provide bulk support to the 6 farmers that had self-financed their chicken operations. The bulk suppliers were from the large-scale agri-sector, and I was the one that had convinced them to take the reputational risk to join this small-scale farming project. If I left, they would also leave. The minimized operational management structure, focusing on delivery of 1-day chicks, feed supply and of key operational data collection was workable, even when supported only by six farmers.
With the collapse of the central farm and 19 farms in-active I had to face and accept defeat. And accept 3 years of wasted efforts. The establishment of 25 companies was a huge, wasted task. We registered each of the farmers as an individual Pty Ltd company, including bank account, tax clearance certificate and shareholder agreement and certificate. The training component was a big, wasted task. We had provided training in chicken, crop and vegetable farming, in financial management, renewable energy management, market and marketing, off-take agreements, management of producer associations. We had developed training manuals. We had had weekly on-site meetings for 3 years, not only to monitor quality and progress, but also to transfer skills, knowledge and approaches from me and my professional team. The establishment of the standard operation procedures was a huge, wasted task. We developed the General Contract that contained general rules for operation and management of the bulk buying–selling principle and the options and restrictions that provided. We developed the Livestock & Vegetable Operation Rules that contained the specific operation rules. We had all these procedures agreed upon and signed individually by all 25 farmers. And the collection and analysis of operational data and documentation was a huge, wasted task. We developed data forms, excel sheets, and presentation tables and figures. We developed detailed supply and consumption systems. We placed all data, farm by farm, on the walls of the central farm. This one, though, was not fully wasted, as it was all these detailed data that I used every time I was forced by the farmers to defend myself. To the police, to the politicians, to the City officials.
My cooperation agreement with the City stipulated that I could leave the project after 3 years should I decide so. I continued to push the City to exclude non-performers, include new beneficiaries and employ a new central farm manager. This did not happen, I left, and the 6 farmers were left to themselves. To my surprise, these farmers continued to farm, buy, raise and sell chicken. And continued to do well technical and financial. For these farmers, I continued after I had left to support bulk feed and 1-day chicken procurement. The feed and the 1-day chickens received at favorably bulk prices continued to be of high quality contributing to low mortality rates, good growth rates and good profitability for the six farmers.
The six farmers came to cycle 10 and then everything stopped. One early morning one of the non-performing farmers called and told me that Elizabeth from plot 10 has been killed the previous evening. She was in the outdoor toilet located at the back of her house. The killer had locked the door from the outside and put the structure on fire. Her daughters saw her burn to death. Elizabeth was the most capable of all farmers. She had stubbornly continued to farm and lead the group of 6 farmers that refused to give up. It was cruel and way beyond sad. I put down the phone. I knew who did it, and he knew I knew. After that, the 5 remaining farmers left their farms.
I visited the agro-village one last time one week later. I had for long tried to get additional financial support to the project, and the week before Elizabeth was killed the World Bank called to say they liked the project concept and next week would fly in for a site visit. I collected them at the airport, took them to the farm, only a few still had chickens and the place was falling apart. One of the farmers came running to tell me the aftermath of the killing, crying. The World Bank left, it was quiet in the car on the way back to the airport.
Evaluation
To evaluate the results of the project is easy. The whole Food & Energy Center turned into a ghost village. All infrastructure stands unused and vandalized. What was once a beautiful agro-village became a ruin. Did we reach what we aimed at, did we achieve all the nice intentions about standardization, scale, inclusion, farming as a way out of poverty. Not even close.
It is difficult to pinpoint what made this a wicked context. The components that together made this context wicked were interlinked and overlapping. My lack of reference points and experience with what I encountered did not help. I had never met this degree of entitlement. This project was for free and still complaints was so pervasive a part of every single day. I had never met this level of radicalism. Everything could and should be challenged, discussed, questioned. Everything should be negotiated. I felt like everyone was a politician. Or a tenderpreneur. I had never met this level of stealing, violence and gang culture. I had never seen a culture that refused to deal with troublemakers. I had never been in a context where every selection was complicated, where local politicians watched and interfered in every step we took. I had never seen this level of self-destruction. I had worked in context of poverty before and had seen what poverty can bring in form a short-term thinking, trying, hustling, drinking and cheating. But this was something completely different.
Ask why the project failed or what the real problem was, and each of the many involved parties would reply with a different answer. Any problem we encountered was just a symptom of another problem located somewhere else. The constant flow of problems was interconnected to a lot of other problems and pulling them apart was almost impossible. The problems kept coming. Kept changing. Nothing was ever resolved. We, I and the project just ran out of patience, time and money. It became clear that it was not possible to understand any problem first, then solve it; rather, all my attempts to solve problems revealed further dimensions or was linked to another problem that I had not seen coming. My normal approaches to problem solving did not work. No matter how much I tried to follow my standard project implementation routines, it did not work. No matter how many hours I put in, it did not work.
It was a context where it was impossible to build trust. As trust is a key ingredient in business this also meant a context where normal business relations were absent. I could openly be cheated one day, and the next day we meet, I would be asked if I had an opportunity we could work on together. A farmer could steal from the neighbor one day, the next day they could sit in a meeting discussing. No shame. I had never experienced this ethic or mode of thinking before.
I learned small important things, like it is foolish to design a project in this context not knowing the level of stealing, and I have a better feel of the issues we would meet, but I would firmly say no to design or implement another project in this context. I am not closer to knowing how a good rural development design or concept would look like.
At the time I managed not one but two agro-village projects, and sadly the other project did not fare better. It was an even bigger agro-village project with 90 farming families, the wicked issues were similar, and it also ended in chaos.
Recently I had coffee with the Provincial Chief Director of Rural Development, he had been with me all the way, and had also been seriously hurt, professionally and personally, by rural development community projects. I went into my usual slightly depressive talk about not having been able to make these projects a success and asked if he thought it was a race thing, me being white. He looked at me in disbelief and said of course not. Sometime when we are down, we search for simple reasons even though we know there are no simple reasons, and certainly not simple ones such as race. Then he told me he had come to see success and failure in a different way. He oversaw an annual budget of R600 million, which should be provided to support small scale black farmers. Year in year out. Project after project after project. And he said the national and provincial departments had learned a lot from my two projects and it had helped them spend wiser. They now did not fund projects with so many beneficiaries in one project, and they did not support primary or secondary cooperative projects. With the big budget they had, they were under pressure to spend and had had big hopes for my projects as if they succeeded, they would have provided a good spending platform, nationally. But they failed, so they had to find other avenues. He said, politely, that they had seen that I had worked very hard and tried my best for 5 years, and if I could not make it work, it likely was concepts and approaches that was too difficult to implement. He said this was very valuable lessons for them. At least my two failed projects had contributed to something. It all depends on levels. But it honestly did not comfort me much. On a personal professional level these projects hit me hard. And one thing is for sure, I will never again be involved in agricultural community projects in South Africa. Somebody will have to create better opportunities for small scale farmers, but it will not be me. I respect the Chief Director, he is still in there, thinking up approaches, trying and failing, but for me the South African rural development context is too wicked.