Thesis (MDF)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: The research examines agriculture value chain finance as it has been applied in the Komati Downstream Development Project. It seeks to assess whether the Komati Downstream Development Project has addressed the challenges of access to finance, markets and support services and enabled smallholder farmers in the project area to operate commercially. The Swaziland National Development Strategy of 1999 committed to increase investment in agriculture. The Komati Downstream Development Project was in line with this strategy. However, for smallholder farmers to commercialise they needed to first overcome the constraints they faced, which included access to finance, access to markets and access to both business and technical support. This research will contribute to future developments and decisions involving the increase of financial flows and investment to the agriculture sector in Swaziland and in other developing countries. This is an empirical research study primarily using a qualitative method to answer the research question. The research design included a review of documentary evidence from a desktop study to collect secondary data and a field study through face-to-face interviews to collect primary data. The primary data was gathered through semi-structured interviews. The organisations interviewed included ten farmers’ associations, the outgrower development department, Swaziland Industrial Development Company and Swaziland Water and Agriculture Development Enterprise. Content analysis was used to analyse the results identifying similar themes and patterns from the interview transcripts. Secondary data on the performance of the KDDP farmers with respect to production volumes and quality of produce was collected and analysed to answer the question whether the smallholder farmers had moved from operating at a subsistence level to a commercial one. The research findings show that the agriculture value chain finance approach as applied in KDDP has improved access to markets, access to finance and access to support and services, and, in the process, the smallholder farmers are now operating commercially. The farmers are able to engage with bigger markets for both inputs and outputs in large-scale sugarcane farming. However, notable findings were made with respect to access to finance and support. Most of the farmers reported the need for continued support by Swaziland Water and Agriculture Development Enterprise and training despite the need to wean them off. Regarding access to finance, farmers reported improved access with more financial institutions selling financial products to the farmers and wanting to finance them. However, none of the farmers’ associations interviewed had accessed additional funding from any of the financial institutions following the initial funding they had acquired. The farmers’ associations have instead turned to internal sources of funds. Though these challenges do not change the conclusion, they are of concern and need to be addressed.

More than 60% of the dairy products consumed in Swaziland are imported from South Africa. The Swaziland Dairy Board had established the dairy credit guarantee scheme with Swaziland Finance Development Cooperation to improve local dairy production and boost the livelihoods of smallholder dairy farmers. Unfortunately, the scheme was terminated without its effectiveness being evaluated. Therefore, the study set out to investigate the contribution of the dairy credit guarantee scheme to household food security. A total of 30 beneficiary households participated in the study. The data were collected through a structured questionnaire and analysed using the Statistical Package for Social Sciences (SPSS version 18.0). The households were compared in terms of the mean number of cows, milk production and volume of sales using the Duncan Multiple Range Test (DMRT). The dairy scheme was open to all qualifying smallholder dairy farmers, but most (86.7%) beneficiaries were male. The beneficiary households owned, on average, between one and eight cows between 2006 and 2009, and produced 188079 litres of milk on average per year. The highest income generated from milk sales was R74137.00 per year between 2006 and 2009. The lowest income from milk sales was R1020.00, from a household with the lowest number of dairy cows on average per year between 2006 and 2009. Beneficiaries reported that the increase in income enabled them to accumulate agricultural assets, increased food purchases and the diversification of livelihoods. Over 56.7% of the households were able to diversify their livelihoods by engaging in other income-generating projects such as poultry and pig production, horticulture, selling groceries and block (brick) making. With improved income especially milking households were able to increase food supply and this is indicated by their higher average Food Consumption Scores (75.58) than non-milking households (59.65). However, all the average Food Consumption Scores were above 42 which is a threshold level for acceptable nutrient intake, dietary diversity and this implies that the dairy production scheme led to improved dietary intake. In conclusion, the dairy credit scheme has the potential to improve local milk production and household food security. It is, therefore, recommended that the dairy scheme be revived, with better accessibility. The establishment of dairy development policy should be considered, in order to create a favourable environment for dairying and the promotion of cooperation among dairy development partners. This cooperation would help to avoid duplication of efforts among development partners and create a platform for interaction, sharing of information and exchange of ideas. / Thesis (M.Sc.Agric.)-University of KwaZulu-Natal, Pietermaritzburg, 2011.