THE MAIZE TRUST: Custodian of the maize industry

LEON DU PLESSIS, ADMINISTRATOR, MAIZE TRUST

Helen Keller once said: “Alone we can do so little; together we can do so much.” In agriculture, few activities can take place without the help from others or assistance from experts. The Maize Trust protects the funds of the maize industry, but without organisations like Grain SA, the funds cannot be utilised properly for the benefit of the industry.

The Maize Trust came into existence in August 1998 after long and challenging negotiations between the then Minister of Agriculture and representatives from the maize industry, following the demise of the Maize Board.

These negotiations led to the provisions and stipulations of the deed of the trust. The provisions of the deed were a compromise by both the minister, on behalf of the government, and industry role-players. However, first and foremost in everybody’s mind at the time were the benefits that a trust of this nature could bring to the maize industry as a whole. The Maize Trust was therefore born as the custodian of the industry, which is to be used to the advantage of the industry at large, within the agreed principles and policies as stipulated in the deed.

Responsibilities of the Maize Trust

The trust serves the industry through financial support for institutions and organisations with programmes aimed at market and production related research. As secondary objectives the trust looks to fund the assimilation and dissemination of market information and to broaden market access for the benefit of the maize industry. An amount of R319 million was transferred as donations to the Maize Trust by the Maize Board, with the final transfer done in June 2010 at the completion of the dissolution process of the board.

The trust does not have personnel, but makes use of the services of a part time investment adviser on a contractual basis to advise the trustees on the investment of the trust’s funds. An independent firm is contracted to handle the administrative services of the trust. The trustees are not remunerated for their services, but are reimbursed for their direct and indirect expenses on behalf of the trust. The Board of Trustees comprises six members who are each appointed for a term of two years. Three of the trustees are appointed by specific maize industry sectors, while the other three trustees are appointed by the Minister of Agriculture, Forestry and Fisheries.

The mission of the Maize Trust is to facilitate the continuous improvement of the entire maize industry in South Africa, to ensure that the industry becomes the leader in the region and that it is internationally competitive. The trust deed does not specify beneficiaries, but only lists the objectives of the trust. This means that funding from the trust can be accessed by anybody in the maize industry who can demonstrate that the intended programme will benefit the industry as a whole. The trust’s funding is aimed at the financial support of actions and programmes by acceptable institutions that are involved in the maize industry.

Generally the criterion for funding is that each project should have a quantifiable and measurable outcome, which is consistent with the mission and objectives of the trust. Twice a year the trustees consider applications for funding and approximately a further six meetings are held annually to discuss the general operations and investments of the trust.

Funding is aimed at improving the whole maize industry

Since its establishment, the Maize Trust has granted a large amount of money to a variety of organisations and institutions involved in research, development, information and other relevant programmes in the South African maize industry. Grants are paid from the annual income of the trust, which is derived from dividends and interest on the investment of the donations that the trust received from the Maize Board. The trust does not have any other source of income.

Currently the trust is spending approximately R50 million per annum on project funding that is directly aimed at the improvement of the maize industry. The investments of the trust have always been managed prudently and with great caution, which resulted in very good returns and a steadily growing asset value. This was done in line with the policy to have an evergreen trust that could be maintained to the advantage of the maize industry.

Funding by the trust is done annually to a maximum of 6% of the trust’s asset value in order to achieve this policy. The costs of the trust are strictly managed and kept as low as possible. This proves the fiduciary responsibility of all the trustees that have been appointed to the trust over time and is still the case up to this day.

Identify and implement new initiatives

Over the years the trust has endeavoured to identify and implement new initiatives in conjunction with the normal funding of projects that would benefit the industry. There are several successful initiatives that have been launched by the trust since its inception, which have all benefited the maize industry and often also created opportunities and benefits for the other grains and oilseeds industries.

A few of these initiatives were initiated by the Maize Trust and in others the trust played an important part with the funding thereof. Some of the highlights in the industry where the trust has or is still playing an important role are the following:

• The development and co-funding of the South African Grain Information Service (SAGIS) and the Southern African Grain Laboratory (SAGL).
• The development of a model to predict the effect of changes in the agricultural industry (BFAP).
• The funding of a highly successful Farmer Development Programme for emerging grain farmers (Grain SA).
• The development of a crop estimates model [DAFF/SiQ (Pty) Ltd].
• A generic marketing campaign for maize (Pap Idols).
• South Africa’s participation in a World Trade Organisation dispute on trade subsidies.
• A dedicated and focused schools programme, managed by Grain SA, to increase knowledge and awareness among school children about maize, farming and careers in agriculture.
• The Maize Trust bursary scheme and internship programme.
• The launch of a pilot project to assist black emerging farmers and the formation of the Grain Farmer Development Association (GFADA).
• The donation, allocation and distribution of maize meal to the value of R1 million to help the poor.
• An application on behalf of all the agricultural trusts to get clarity on the tax exemption status of the trusts (SARS).
• The development and erection of the Grain Building in Pretoria.
• The development of a common and focused mycotoxin research strategy and a dedicated panel of mycotoxin experts (facilitator: Prof PS Steyn).
• The possible development of a public-private-partnership to co-fund approved mycotoxin research projects (The Department of Science and Technology).
• The development of a conservation agriculture strategy for maize and the appointment of a specific facilitator to drive this process (facilitator: Dr Hendrik Smith at Grain SA).

Board of Trustees

To have continuity among trustees is extremely important to ensure the correct functioning of the trust. During the
past financial year there were no changes to the trustees. The Board of Trustees is comprised by three ministerial representatives, namely Karabo Peele, Toto Hewu and Penny Daly as well as three trustees from industry, namely Jannie de Villiers who is the representative of white maize producers, Neels Ferreira who represents yellow maize producers and John Purchase who represents maize processors. The composition of the trust was also a negotiated agreement between the government and the maize industry in the 1990s, in an effort to provide fair representation to the parties involved.

Grain SA’s Grain Farmer Development Programme also benefits

The trust currently contributes approximately R15 million per annum to Grain SA’s Grain Farmer Development Programme; this represents the lion’s share of the costs of that programme. This programme has always been supported by the Maize Trust and is generally seen as the most successful development programme for emerging farmers in the grain industry.

The Maize Trust is committed to capacity building in the South African maize industry. Training, development and mentorship of new farmers are a crucial part of this. Without successful producers the industry and the country will suffer, because reliance on imports is not regarded by the trust as a long-term solution to food security.

It is also crucial for farmers to be well-trained in order to be more competitive in the international market. Over the
past few years, South Africa has proved to be a regular exporting country for maize, and therefore international competitiveness is imperative for our producers to survive. The trust supports farmer development for these reasons and believes that sustainable commercial production of maize will achieve food security and independence from other sources for our country.