DELTA Beverages plans to inject more than $1,1 million into its Beverages Sorghum Contract Farming Scheme (BSFS)during the 2016/7 financial year, as it forges ahead with plans to support local farmers, NewsDay has established.
BY MTHANDAZO NYONI
Delta requires about 15 000 tonnes of sorghum annually and sources it locally through contract farming.
Company corporate affairs manager, Tsungai Manyeza, told NewsDay in emailed responses that Delta was looking forward to inject about $1,1 million into contract farming.
“Delta Beverages is looking at injecting approximately $1 145 618.30 for the 2016/17 financial year,” Manyeza said.
In the financial year 2015/15 the company injected about $4,13 million into the scheme and received 15 675 tonnes grain deliveries.
Sorghum beers have grown in importance within Delta’s product mix, as demand for clear beers and sparkling beverages continues to weaken due to a sluggish economy.
In the first quarter of 2016, sorghum beer volume increased by 9%, while revenue inched up by 3%.
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Lager beer volumes dropped 14% and revenue went down 17%, but the lower priced Eagle lager demand increased.
In the 2015 financial year, sorghum beers made up 55% of total beverage volumes, up from 50% the previous year. Sorghum contributed 72% to total beer volumes in 2015, up from 67% the previous year, with lagers making up the balance.
Weak economic fundamentals, cash shortages, underperformance of agriculture and significant policy shifts were cited as major threats to the company’s performance.
Delta’s BSCFS is a farmer development programme through training and extension support, ensuring accessibility of farming inputs in order to guarantee future supply of malting sorghum for the business while also guaranteeing a market for the sorghum producers.
Recently, Manyeza revealed that the total contracted hectarage for the 2015/16 season was 4 711 hectares, a 10% reduction compared to prior season through 9381 communal farmers and 28 commercial farmers.
She said the reduction in the 2016 contracted hectarage was due to the need to minimise the crop failure as a drought was predicted for the country due to the El Nino effect.
Manyeza said Delta offers a free and extensive quality assurance programme that ensures access to technical information by growers, improved yields and grain quality. The farmers were also supported with input finance in the form of agricultural inputs.
She added that the benefits for the farmers were a guaranteed market for their produce and free agronomic services that have resulted in improved grain yield and quality.