The co-owned Umfolozi Mill area has developed as an integrated supply chain. Cane supply reliability was identified as a potential area for productivity improvement at Umfolozi. It is important that the cane supply to a sugar mill arrives at a steady and reliable rate. A reliable cane supply ensures that the mill can operate at an optimum efficiency. Sugarcane supply reliability depends on how the mill area adapts to unforeseeable changes in the supply chain. An important aspect to this is the weather and how it affects the harvesting regimes. The sugarcane supply chain at Umfolozi is divided into two branches, road transport and tram transport. The trams account for 70 % of the cane delivered to the mill and the can is sourced from a climatically homogenous region. In the occurrence of a rainfall event of above 5 mm, infield harvesting cannot take place on the Umfolozi Flats; hence 70 % of the mill‟s supply is halted for one or more days. To address the problem, a stochastic model was created to simulate the effectiveness of an enlarged cane stockpile if it were maintained on the current tram sidings outside the mill and were crushed when wet weather prevented further harvesting. The stockpile was simulated on a first-in first-out principle and was able to supply the mill with enough cane to continue running for 24 hours. The model was then used to conduct a series of Monte Carlo simulations on which sensitivity analyses and economic feasibility assessments were carried out. Results show that the stockpile was effective in reducing the length of milling season and the number of no-cane stops. However, on further analysis into the implications of creating a stockpile it was found that 1% recoverable value (RV) was lost during the 24-hours that the cane is stored outside the mill. The loss in revenue as a result of the RV reduction had a negative impact on any savings created with the implementation of the stockpile. This result made apparent the negative impact of deterioration to the whole supply chain. Further research is required to determine more accurately the rate of deterioration, and therefore, quantify more accurately the losses that occur in the supply chain. A significant outcome of the study was the development of a mechanistic tool which drove decision making at Umfolozi Sugar Mill. It lead to the development of the modelling framework LOMZI, a simulations based framework which places more emphasis on environmental factors and risks. / Thesis (M.Sc.Eng.)-University of KwaZulu-Natal, Durban, 2011.

The South African (SA) Sugar Industry is committed to transformation in land ownership and supports the SA government's target to transfer 30% of freehold sugarcane land to previously disadvantaged individuals (PDls) by 2014 via the land market under the willing buyer/willing seller principle. The medium-scale farmer scheme for emerging commercial sugarcane farmers, which was introduced in 1996 to help redistribute commercial sugarcane farmland to PDIs is an important component of the SA Sugar Industry's land reform strategy. The average financial performance of emerging commercial farmers (now called New Freehold Growers or NFGs) in the SA Sugar Industry was below that of large-scale commercial farmers during 1997-2007 (real average annual net return per hectare of R390 versus R3 075 in 2007 Rand). Given that this trend raises concerns about the long-term viability of NFGs, the first aim of this study is to identify factors that distinguish between successful, less successful and unsuccessful NFGs using a stratified random sample of 96 NFGs in KwaZulu-Natal (KZN) surveyed during July-November 2008. These NFGs were classified according to whether their mortgage loans were current (successful), in arrears (less successful) or in the process of legal action (unsuccessful). Student t-tests indicate that successful NFGs, on average, had statistically significantly more experience in farming sugarcane, larger farm sizes (proxied by average annual gross farm income), greater solvency and liquidity, and larger areas annually replanted to sugarcane than the less successful and unsuccessful NFGs. The successful NFGs also placed relatively more emphasis on computerized record keeping systems that can save time in conducting production and financial analyses to improve farm profitability. They also on average tended to make more use of their own financial record keeping system in addition to the services of bookkeepers, and used more risk management strategies than unsuccessful NFGs, in particular having off-farm investments and keeping cash and credit reserves. A multinomial logit model of factors affecting the sample NFGs' mortgage loan repayment status estimated that extension contact, production and financial risk management capacity, farm financial and production management ability, own record keeping and cash management, and having more sugarcane farm experience to operate larger farm sizes were key determinants of successful loan repayment. The results suggest that policy makers can promote the viability of NFGs by (1) encouraging them to manage solvency and liquidity levels and implement replanting schedules in line with industry norms (e.g. debt:asset ratio of 0.5 or lower, and the replanting of 10% of the area under cane (AUC) per annum); and (2) facilitate the transfer of adequate size farms (expected annual gross farm income can meet annual loan repayments) in commercial transactions or transactions funded via government grants to farmers who have the relevant farming experience. New Freehold Growers are also encouraged to build business relationships with industry support staff, implement good record keeping practices, and develop strategies to manage risk (e.g. off-farm investment and holding cash and credit reserves). The second aim of this study was to document the NFGs' perceptions of the scheme and industry role players in order to identify what aspects could be improved for both current and future farmers. The results suggest that most sample respondents (84%) can identify with, or have experienced the relatively low current returns (cash flow problems) usually associated with the early years after land purchase, while about 60% of the sample NFGs would have preferred to first lease their land before buying. Future NFGs, or the beneficiaries of other land reform initiatives, must be informed that an investment in land has low current returns relative to capital growth and that the annual profit from farming is low relative to the land value. The possibility of leasing could also be considered for future land transfers to NFGs or other land reform beneficiaries to help manage the liquidity constraints associated with land purchase. Ninety-nine percent of the sample NFGs felt that it was important for new farmers to have a mentor. Post-settlement support thus needs attention from industry role players, and a sustainable mentorship programme could, in part, meet this need. / Thesis (M.Sc.Agric.)-University of KwaZulu-Natal, Pietermaritzburg, 2009.