Posts tagged: Donor Financial Support

Thandi fruit and wine

comments Comments Off on Thandi fruit and wine
By , April 13, 2012 1:48 pm

The Context
Thandi has established a business model where farm workers have been included as newly established landowners and shareholders through partnerships with existing growers, retailers (both domestic and overseas) and established export firms in both the fruit and wine industries. The government’s market driven land reform policy has not been a great success. Although it does provide financial assistance in the form of a land grant, even the biggest grant in a multi-tiered system is not sufficient to establish a sustainable wine or fruit operation in industries where economies of scale matter and where cooperative entities are to be avoided.

The Mechanism
To mitigate a lack of development support, Thandi sought financial support from the UK government’s Department for International Development (DFID). DFID supported Thandi Fairtrade wine to the amount of ₤400,000 over a three-year period (from 2006), with the idea of creating a self-sustaining business model thereafter

The Outcome
Support through public funding has contributed significantly to empowering farm workers. It has strengethened their position in  existing supply chains and included them in the marketing network of established businesses in the South African wine and fruit export industries. Also it has enhanced their ability to build brands.

The Thandi project is a success in the sense that it has been able to grow and sustain itself for ten years – in a domestic and international environment where a skewed trade regime and unforgiving competition alone decide whether a venture survives or not. Although the future sustainability of Thandi fruit (sold under the Thandi label) is less secure, Thandi wine has been going from strength to strength and seems set to gain access to new international markets.

Paradoxically, the strength of the Thandi project is also its weakness. The partnerships and overlapping shareholding arrangements are complex and not easy to grasp – especially for workers and communities who are not highly educated, and often lack the confidence to participate in decision-making, even when offered the opportunity.