Background
This chapter develops an understanding of the challenges faced by inhabitants of informal settlements in South Africa, and the viability of beekeeping as a mean of sustainable livelihood. We start by presenting the primary causes of unemployment: labour shifts, apartheid, and lack of business knowledge. Next, we discuss beekeeping, its potential as an income generating activity, reasons why South Africa’s industry has been stagnant, and similar cases where beekeeping has been used to aid the financial sustainability of under-developed communities. We then describe entrepreneurship, potential business models, and the current laws pertinent to business in South Africa as relates to any business venture the seven beekeepers may engage. We move on to describing our sponsor, The Honeybee Foundation, and their particular role in the project as well as The Office of Sustainable Livelihoods and a brief mention of the community that the seven beekeepers come from. By the end of this chapter, we expect to have explained the role of unemployment and the lack of education in the informal settlements of South Africa, the need for beekeeping as a way to alleviate this issue, and how a business plays into providing the beekeepers with a sustainable means of livelihood.
2.1 Unemployment and Lack of Education
Cape Town has a number of impoverished areas, both formal and informal, which are burdened with hunger, disease, and crime. The primary reason for this is the large amount of unemployment that stings the population. There are, in turn, various causes of the unemployment. Even though many of these causes are rooted in the past, they still hold power over the people of today. The result is an increased difficulty in surviving what should be a simple day-to-day life.
2.1.1 Labour shift and Urbanization
Two reasons for the massive amount of unemployment in South Africa include the labour shift as well as remarkably large amounts of urbanization. The labour shift involves the change of employment patterns from large amounts of unskilled workers to small amounts of skilled workers. The two work hand-in-hand, labour shifting shrinks the number of available jobs, while urbanization increases the number of available workers, to amplify the problem of unemployment in South Africa. On a macro scale it is quite simple to look at the process and demand a reversal; however, on a micro scale it is much more difficult to see along that same line.
The trend of urbanization has been followed for many years in Cape Town. The demands of the “war-time economy” of the mid-twentieth century included more workers to keep the machine churning. This influx of workers, in turn, was responsible for a drastic increase of occupants in informal settlements (Wilkinson, 2000). The 1970’s also brought about an industry boom that drew additional workers in from the country in search for jobs (Nattrass, 2004). Once this rush had run its course however, the population was not put back into balance by any sort of massive pull towards agriculture away from the city.
Urbanization continues in modern day as well. Data collection in 1999 indicated that “over 51% of the rural African workforce was unemployed” (Aliber, 2003). This indicates a motivating factor for people to move elsewhere. In addition to employment troubles there is also the problem with a lack of “productive resources” (Aliber, 2003). Rural families or individuals certain that there is no great opportunity in the country might very well look towards urban areas as places where they could stand a better chance at finding a suitable living. In a report published by The Economist Intelligence Unit, statistics showed that in South Africa “an estimated 61% of the population lived in urban centres in 2010…” and will increase “…to 63% by 2015” (South africa economy: Demographic profile, 2011). This trend shows that solving the problem of continued urbanization where there are not many available jobs is not simply a matter of dealing with the remnants of the past, but is an on-going problem that demands to be handled actively.
The problem of labour shift is the resulting decline in the amount of jobs available for the large workforce. Of course, the reason for a labour shift of such consequence is not simply to reduce the number of jobs available. The South African economy of the 1990’s became more productivity focused. This means that it began to favor high producing skilled workers rather than the lower producing unskilled labourers. These skilled workers were able to earn higher wages since they were capable of greater production rates (Nattrass, 2004). Unfortunately for the large number of unskilled workers, their importance in the labour market became marginal. The massive urbanization mentioned above provided the city with large amounts of ex-agriculturists. In a relatively low-tech environment with an industrial boom this may have proven ideal. However, migrants from the country stepped into an urban environment at the end of a long line of the already unemployed.
As for the few well-paid jobs that existed for skilled workers, apartheid played a large role in their distribution (See Appendix B). As was mentioned earlier, the white population remained closer to the areas of wealth and quality employment. These prosperous locations of Cape Town were also the areas in which superior educational systems and schools were established. This lead to a geographical disadvantage for impoverished South Africans. As a result it was both easier for whites to gain the necessary training for skilled work and also to actually physically reach a work location. As a result the good wage, and thus the legacy of wealth, remained largely within the white population (Mears & Motloung, 2002).
2.1.2 The Damage of Unemployment
Some of the most prevalent effects of unemployment in South African include the spread of disease, most notably AIDS, large amounts of hunger and malnutrition, and waves of crime.
2.1.3 Poverty Solutions
There are many ideas that have been pondered regarding how to solve, or at least treat, the problem of poverty in South Africa. Two of these alternatives include Base Income Grants and Public Works Programs. For a further discussion of these alternatives refer to Appendix B.
The ideal means to providing for the poor would be job creation, because, as Nattrass (2004) argues, it suites African mentality (Appendix B) and is also not highly expensive to the government. Jobs create a source of income with a level of sustainability usually greater than the subsidized incomes provided by the government. This is why the job shortage paired with overpopulation is such a significant problem. Upon confrontation with such a problem, it becomes important to search the market for underutilized industries that could provide for many of the currently impoverished. This project turns to one of these unexploited industries in hopes of providing a better future for some of South Africa’s impoverished residents.
2.1.4 Unemployment and Lack of Education
Unemployment can be addressed in part by the utilization of business education. McGrath (2006) states that education around the world has been defined as “a core tool for increasing economic competitiveness.” Though a general education would be helpful, the major gap in knowledge stems from the little opportunity to gain an understanding of business. Those who live in underprivileged areas cannot afford secondary education that would provide a business education. These residents also tend not to be close to the locations of respected schools since they are instituted in wealthy areas of the Western Cape (Domenech, 2010). If schooling were more easily available, the comprehension of businesses would allow for more entrepreneurship opportunities as well as other establishment of new businesses that do not depend on the government’s aid. Self-sustaining businesses that generate jobs at the local level by the local people are in the best position to stimulate direct improvements.
Small-scale generated businesses need a dependable motivation to achieve ideal economic growth. Currently, this idealistic behaviour is not apparent in black South African culture where education does not yet constitute as a “day to day [activity]” (Botha, 2010) and therefore is not viewed as one of the highest priorities. One of the major causes of this culture setting is in response to the apartheid era. During this time, the South African government segregated whites from coloureds from blacks in areas of education, employment, and income as stated in the Group Areas Act of 1950 (Wilkinson, 2000). This history background is responsible for leaving black and coloured low income residents at a disadvantage as well as continuing this trend with slow culture and habit changes.
2.2 Beekeeping in Low Income Areas
Now that the backdrop of unemployment has been established as a key socioeconomic issue in South Africa, beekeeping as a potential aid to the unemployed and low income families can be addressed. Beekeeping, or apiculture, is the art of raising and harvesting bees for the purpose of collecting honey and other beekeeping products such as bees wax. Since honey is a valuable good and there is an existing market for it worldwide, exploitation of this discipline may lead to potential income generation for the various South Africans that partake in it.
The people of interest for this project are seven individuals from Manenberg, a township in the Cape Flats area of Cape Town, South Africa. For the most part, townships consist of individuals whose economic opportunities have been hindered by apartheid and its legacy. Low income communities have been the target of several apiculture efforts throughout the world. From South America to Eastern Asia the art and practice of beekeeping are lived by many every day. In an effort to help out these seven individuals, the City of Cape Town has commissioned the Honeybee Foundation to train these individuals to teach them the fundamentals of beekeeping. Below, benefits and potential of beekeeping are discussed.
2.2.1 The Benefits of Beekeeping
There are several benefits associated with the beekeeping industry. Foremost, it can be a source of employment and income for those involved (Illgner, Nel, & Robertson, 1998). By occupying oneself with the upkeep of bees, an individual will produce a product that has an existing demand. Honey, the number one resulting product of beekeeping, is sold and consumed in nearly all countries of the world. It has a multitude of uses ranging from medical to culinary. Honey can also be used by the individual harvesting the product as a source of food, and in many places it has cultural significance. Therefore, someone who decides to sustain themselves by beekeeping should not have any issue neither selling their product nor making a profit from these sales. Apiculture also creates employment for the several craftsmen who produce some of the essential materials for beekeeping like smokers, gloves, and hives (Illgner, Nel, & Robertson, 1998). The number of employment opportunities is copious and could greatly improve areas in need of job creation.
Besides being an income generating activity, beekeeping is also a fairly easy to maintain occupation. Beekeeping is not a rigorous activity unlike most agricultural efforts. Only a few hours a day are needed to check up on the state of the hive and make sure everything is going smoothly. It also does not require the same financial investment as the planting of crops does. The location for setting up beehives does not require too many specifications. At the same time, the sites where the beehives are situated tend to benefit the area’s flora due to pollination by the bees. Constructing a beehive requires basic raw materials, whether it is several pieces of wood or nails to fallen trees that are readily available. One can obtain bees from either a commercial supplier or from empty baited hives set in trees (Illgner, Nel, & Robertson, 1998). Space may be a constraint in urban areas; however, there are creative ways being used in large cities to accommodate hives. Construction of top bar hives is one of these creative methods. These hives are being used more and more every day since they are fairly easy to construct and allow for the keeping of bees in urban areas like rooftops. Top bar hives make it a bit more difficult to collect honey from the hive; however, this is a small price to pay if it allows for urban beekeeping (Grover, 2011).
Beekeeping also has the potential to help a community come together as a whole for its benefits. Since beekeeping is not a physically demanding activity, many people may take part. Beekeeping has been undertaken by women in several parts of Africa. Local communities have worked together to generate a greater harvest of honey and beeswax in order to increase their profits. Successful cases of communities working together can be seen in several African countries like Malawi, Ethiopia, and in South Africa itself (Illgner, Nel, & Robertson, 1998).
Although beekeeping has many benefits, it also has some difficulties. Despite benefiting craftsmen who produce beekeeping related equipment, the purchase of said equipment might be expensive at times. Prospective beekeepers may not always be able to afford the equipment. This will hinder the progress and possible expansion of the beekeeping business. Another common problem for prospective beekeepers is illiteracy. It can become a big issue since the beekeepers will not be able to record their hive production. This situation makes literacy and basic record keeping skills highly important (Illgner, Nel, & Robertson, 1998).
2.2.1.1 Beekeeping Viability
Beekeeping is an activity that has been around for years. There’s evidence that beekeeping and honey hunting has long since been a part of African culture. Cave paintings of honeybees, honey hunters, and honeycombs can be seen is several places in the continent (Pager, 1973 as referenced by Illgner, Nel, & Robertson, 1998). Since this activity is very old, there are lots of existing resources related to it. Many books and manuals explain how to keep bees; these include, “Beekeeping: A Practical Guide for Southern Africa” by project sponsors D. and J. Marchand, as well as several websites and local organizations like the South African Bee Industry Organization, or SABIO.
As mentioned before, beekeeping has been proven to work as a means of income generation for low-opportunity communities. Several apiary efforts have been proven efficient and beneficial to various communities. According to by Illgner, Nel, & Robertson (1998), people at the Bonodolfi Mission in Zimbabwe have come together in a semiarid land to start up their own beehives for honey production. They have formed an association that includes many women, which once again proves beekeeping can provide employment for many despite their gender. As long as the group works together, the upkeep of the hives and the bees should be relatively simple since there will be more able bodies to partake.
Licensing for beekeeping and hive ownership is easily accessible in South Africa. All persons wishing to own hives must register them according to the Government Notice R1674 of 24 December 1998 under the Agriculture Pest Act 36 of 1983. The registration is managed by SABIO, and it only requires the name and postal address of the prospective beekeeper, as well as the payment of a registration fee (Total transformation agribusiness ltd, 2010).
2.2.1.2 South Africa’s Potential
South Africa is a country that is currently under-producing honey. There is a large demand for honey in South Africa and the country experiences a shortfall of about 1000 tons per year, which calls for increasing production in order to meet the internal demand that is currently being met by Chinese honey, which has been banned by the European for substandard quality (Total transformation agribusiness ltd, 2010). By training more perspective beekeepers, the number of potential suppliers to meet this shortfall will increase. These prospective beekeepers will dive into a market that has an internal demand waiting to be met; however, they will also have to compete with foreign producers. In order to survive, the beekeepers must offer additional services (Pest control, pollination, educational tours) besides honey production to gain an edge against the competition. The combination of honey production and services should serve as a motivation to further pursue beekeeping as an income generating occupation.
The expansion of the beekeeping industry is necessary since the country has all the natural resources and even its own unique honey producing bee to make it one of the top players in the honey world. The Apis Mellifera Capenisis, or the “Cape Bee” is one of the most distinctive honeybees in the world. The workers have the ability to lay eggs in the absence of a queen, making them more likely to survive and sustain themselves (Illgner, Nel, & Robertson, 1998).
South Africa, located at the southernmost part of the African continent, has an ideal weather pattern and flora to be a successful location for beekeeping. The majority of the year the Western Cape Province has ideal weather for beekeeping, with the rainy season running from May to August (“General information,” 2004). The rainy season should be noted since excess rain can have a potentially harmful effect on honeybees. One of the main honey producers in South Africa is the Eastern Cape Province. Several cities and towns there have been beekeeping for years, while new beekeepers are sprouting as a result of government programs such as the ARC’s Beekeeping for poverty programme which looks to empower low income communities (Lundall-Magnuson, 2010).
2.2.2 The Decline in Beekeeping Productivity
Honey production in South Africa has not been meeting the country’s demand, and there are several factors that may contribute to the status quo. Beekeeping relies in a particular set of skills and knowledge necessary to successfully interact with bees. A big issue that is rising is the lack of transfer of these skills. The Honeybee Foundation as well as the ARC has taken steps to support apiculture (Lundall-Magnuson, 2010). By training prospective beekeepers they are making sure this skill is not lost to time, and they are helping low-opportunity people with a way to make ends meet.
As it was mentioned before, the Apartheid system hindered the growth and transfer of these skills to underprivileged people. Honey hunting had been the main way non-white people obtained honey during these times. Beekeeping was seen as a “whites only” business, which discourage many black and coloured people from adopting beekeeping as a form of livelihood (Russouw, 2002). Since apartheid has ended, beekeeping has the potential to empower this previously secluded folks with the necessary skills to make an extra profit.
A big issue leading to the decline of beekeeping is the lack of interest and misinformation. Several beekeepers have been trained in various parts of the globe. Some of these prospective beekeepers choose not to pursue further training and drop out of the educational programmes. Like most things in life, beekeeping takes time to become profitable. As a result, people become impatient and are not willing to undergo the whole beekeeping training program. Similar efforts to train beekeepers in Ethiopia and South Africa itself have been hurt by this lack of interest (Mariki, 2007) and (McGregor, 2009). This lack of interest can also be attributed to the poor design of training programs and its failure to engage the trainees. Some people choose not to be involved with beekeeping due to their lack of knowledge. To successfully maintain beekeeping as a sustainable livelihood, basic knowledge of business skills is necessary. People from under-develop communities often lack this knowledge and as result their beekeeping effort fails to profit them. This in turn leads to them not continuing to bee keep. A factor hindering the spread of beekeeping is fear. Bees are not only known for the honey, they are also recognized for their stinging. Many individuals are afraid of bees and would never consider having to work with them. Ronia Molapo, a member of a beekeeping community, was initially reluctant to deal with bees and expressed that “’[she] used to be afraid, but now [she loves] bees.’” She is part of a successful beekeeping effort established in Muldersdrift, South Africa. She goes on to say “Before I became a beekeeper, I was just sitting at home, doing nothing. Now I’m a beekeeper and I’m learning new skills all of the time. I’m not scared of the bees at all” (Russouw, 2002).
2.2.3 Case Studies
Case studies are an essential part of any project since they provide first-hand accounts of similar efforts that have been already conducted. We will now explore some case studies where beekeeping was utilized as a tool to provide low-income communities with a way to make a living. Since beekeeping is a universal activity, we will discuss cases that are pertinent and have occurred in various places of the globe.
2.2.3.1 Case Study 1
The following information was taken from the Ministry of Agriculture and Rural Development (MoARD) IPMS Ethiopia Project’s working paper no 8 which is called “Approaches, methods and processes for innovative apiculture development: Experiences from Ada’a-Liben Woreda Oromia Regional State, Ethiopia.”
The goal of IPMS Ethiopia Project was to identify the current beekeeping problems and offer appropriate solutions by introducing market-oriented modern beekeeping practices to local beekeepers. The research emphasizes that Ethiopia was not able to excel in beekeeping amongst other nations despite its great potential. Although Ethiopia ranks 10th in the world in honey and 4th in wax production, it has the potential for vast improvement (ARSD 2000). The reasons for this underperformance are shown to be lack of improved bee management systems, low quality of hive products and lack of skilled beekeepers. The Western Cape Region in South Africa has very similar problems in their beekeeping industry.
To determine which methods would be appropriate for the project, the ministry employees conducted interviews with farmers, apiculture experts, development agents, and federal and regional governmental organizations. After researching the conditions in detail, the ministry decided to intervene in the local beekeeping practices to increase the quality and quantity of apiculture products. These interventions consisted of activities such as finding possible market places and establishing institutional linkages between producers and wholesale buyers. Using this information as a cornerstone, we will refer to similar methods in Cape Town once we obtain enough information about the needs of the seven beekeepers. As a collaborative effort, we are going to share views on the matter and try to support the beekeepers wherever needed.
During their research, Ethiopian officials identified a number of quality issues due to harvesting problems. Exposure of honey to the moist weather and usage of dried cow dung as smoking material both ruined the quality of the product. There was also contamination in the honey due to malpractice and the methods used for transportation were inappropriate. In order to address these issues, beekeepers were instructed to pay close attention to clean practices and containers during training sessions. These sessions made it easier for the beekeepers to transition into modern and globally accepted beekeeping practices. For the South African beekeepers, the training sessions they have at the Oude-Molen Eco Village are going to be crucial in order for them to learn and follow the global standards for beekeeping.
The researchers of the IPMS project also communicated with the local beekeeping equipment supplying companies and bought equipment for cheaper prices. This method could be followed for the Cape Town project and a connection between the seven beekeepers and local equipment suppliers could be established. Thus, the starting cost for potential beekeeping businesses would decrease.
During the research in Ethiopia, it was observed that the local beekeepers did not have any problems with marketing; however, they could sell their products only to local buyers at prices lower than the commercial prices. The beekeepers sell their honey at the road side of Dukem town and they also sell their products to retailers who come to their homes. As most of the local beekeepers indicated this marketing system has been applied for more than 60 years. Although this system works without any problems, it is not the best way to make a profit in this business. The researchers agreed that forming a linkage between beekeepers and local businesses would be more beneficial for these entrepreneurs. Thus, the research group conducted another set of interviews and asked the locals about marketing their products and the honey markets in their area. From this data, we can observe that there would be two options for the local beekeepers in Cape Town if they decide to do business. They could either become suppliers to the retailers or become businessmen by setting up connections with local businesses where they could sell their products for higher prices.
This case study from Ethiopia provided helpful information about the problems in beekeeping and presented an approach to ameliorate the conditions in order to produce better quality products and benefit the local beekeepers from their practices. The importance of training the beekeepers to produce good quality products and making them follow the globally accepted procedures were emphasized. It was also shown that the beekeepers can make a better profit with their products if they set up a business network with the local shops. Analysing these conclusions, similar methods can be followed for this project. Training the beekeepers and setting up local business connections are essential to succeed in urban beekeeping.
2.2.3.2 Case Study 2
On March 2008, people from the Chibalo village in Malawi were trained to bee keep and maintain this as an income generating activity. With the support of the Oxfam International organization and their partner, Circle for Integrated Community Development (CICOD), this community was able to establish a form of livelihood. The village is located in an area that had a low amount of jobs available, which made it difficult for the people to generate an income and sustain themselves. The people were trained and given the necessary tools to conduct apicultural activities. The community focused on producing the honey and with the help of the CICOD, they were connected to local markets where they sell their honey. The community is now reaping the benefits of this activity. It is producing a profit which is being distributed for the betterment of the village. People of age and widows are receiving financial support from the beekeeping proceeds. In addition, the community has become more nature-aware. They have started planting trees and taking care of the surrounding environment. With this, they will ensure a healthy ecosystem for the bees to be kept and for villagers to live (Oxfam International, 2008).
The main lesson learned from this effort is that beekeeping can benefit a group of individuals. This community worked to produced honey and help themselves out. It also proposes the scenario where our seven beekeepers decide to only produce honey. Then it will be up to us to enable their product to reach a desirable customer base. It also notes the importance of cooperation and how the group effort of a whole community can facilitate the success of beekeeping as a sustainable livelihood.
2.3 Entrepreneurship, Family Business, and Micro-Enterprises
This section describes business related information that would be crucial in the process of creating a sustainable livelihood for the apiaries. We begin by defining entrepreneurship as we hope our beekeepers will become entrepreneurs themselves. Next, we mention family business since family involvement is often the key to success for small business ventures. This is followed by a description of a micro-enterprise and the several possible models the beekeepers might consider. Lastly, we mention South Africa’s law in regards to business; this information will be of interest should the beekeepers decide to venture into a business.
2.3.1 Entrepreneurship
An entrepreneur is an individual with the drive of starting a new business, regardless of size, who acts on opportunity and who has the constant goal of major and rapid growth for his business. This varies from small or micro-enterprise businesses in the sense that the owner would begin small and most likely remain small (Venter, 2008). Lack of finances and basic business skills are the main disadvantages that affect individuals who are pursuing business ventures. Members of impoverished communities rarely have enough educational background to increase the profitability or the productivity of their businesses (Haynes, Seawright and Giauque, 2000). In order to secure the continuity, the owners have to market their products or services well and need adequate information and training to serve their customers best. Local entrepreneurs usually need training to gain business skills such as record keeping and determining prices in order to establish profitable microenterprises. The disadvantages that rise due to lack of education and skill set create a barrier for local people who seek to pursue individual entrepreneurship. For this reason, individual entrepreneurship in poor communities might not be the best solution for creating jobs (De Bruin and Dupuis, 2003).
Small-scale collaborative entrepreneurship is suggested as an alternative to individual entrepreneurship in order to avoid its disadvantages. This collaborative approach triggers the community to use its own resources and assets to establish sustainable businesses. The profit generated by the community-based enterprises is utilized to initiate new projects for the wellbeing of the community (Haugh and Pardy, 1999). Different projects have been applied in various communities around the world to extend community-based enterprises. These projects to initiate community-based entrepreneurship usually start by forming a steering group of interested locals to establish a business (Haugh and Pardy, 1999). The steering group, supported by outside agencies, comes up with ideas to benefit their community and prepare a report and a future business plan. This bottom up approach led by the community itself tends to be sustainable since it provides the members of the community with a sense of ownership (Peredo and Chrisman, 2006).
Comparing and contrasting the concepts of individual entrepreneurship and community-based entrepreneurship is necessary in order to establish sustainable livelihoods within impoverished communities. The locals who are willing to initiate business ventures need to be informed of possible outcomes of choosing between these types of business forms. Owners of microenterprises in South Africa often lack skills to plan their businesses systematically which is a very important feature for survival (Peters and Buhalis, 2004). For this reason, South African entrepreneurs need assistance to obtain basic business skills before they initiate business ventures within their communities.
2.3.2 Business Models for Micro-Enterprises
Business models are tools used to clearly define the layout of one’s business. Though every business model is different and unique to the needs of the growing business, there are general models that can be used as guidelines. These layouts are structured enough to initiate the defining process but are flexible enough to accommodate modifications. Some of these business models include: production, retail, co-operative, services, and tourist attraction. For the purposes of this paper, the micro-enterprise perspective will be the focus of these numerous business plans.
A micro-enterprise is essentially a very small business with less than ten employees and very low incomes. According to Sharma (1990), the specific parameters of a micro-enterprise vary worldwide. For this reason, an alternative definition describes “a micro-enterprise [as] an economic endeavour which is: (1) operated and managed by one or two people, (2) usually based within a family, and (3) usually functions with the informal sector of the society outside of bureaucratic regulations and government controls” (Sharma, 1990, p. 9). This description is appropriate for the South African area of interest due to its mention of size and family orientation.
Building a micro-enterprise in third and fourth world countries can be accomplished by pursuing four steps of developments. The four phases are meant to “determine interest in establishing a micro-enterprise,” “initiate a micro-enterprise endeavour,” “expand an existing micro-enterprise endeavour,” and when opportunity arises “re-direct an existing micro-enterprise” (Sharma, 1990, p.12). Due to the status of the apiary’s business venture, the first phase does not apply.
In the initiative stage, three more topics are considered. Similarly assessed in the awareness stage, the individual capability step establishes awareness of responsibilities and needs in regards to each individual’s families as well as the prospective opportunities for income development (Sharma, 1990). Essentially, the realistic capabilities of personal and family involvement in the micro-enterprise are measured. Next, economic environment considerations include analysing what resources are accessible, the amount of labour required, and the local micro-enterprise options available. Once the details of capability and the economic state are acquired, the feasibility of starting a micro-enterprise can be researched. This section of the initiative stage has five parts which include an overview of all the requirements of a micro-enterprise, a knowledge base of micro-enterprises, guiding principles to follow, outreach options and awareness skills for asking for assistance when needed, and an execution plan (Sharma, 1990). After consideration of all three aspects, the decision can be made whether to create the micro-enterprise or not. If the micro-enterprise is in-fact implemented, the last two stages are expansion and re-direction.
Once the business operations are up and running, the evaluation of expansion can occur. In this context, “expansion refers to enlarging production/service for a greater market area” (Sharma, 1990, p.13). The three topics needed to be addressed are cost effectiveness, market potential, and managerial planning. Some of the important items of cost analysis include cost of products used, labour, and anticipated revenue (Sharma, 1990). From here, the current and predicted markets are assessed to determine customer traits, wants, and needs as well as the course of action the business wants to partake. Once the direction of the micro-enterprise is better established, the most appropriate management styles should be defined to help lead the business down the desired path. The Initiatives stage occurs at different paces for each micro-entrepreneur. The expansion stage proves solid business growth and may take some time to reach. Once the established micro-enterprise has expanded and is consistent, the re-direction stage must stay open as an option. This stage allows for adjustment to new markets, changing customer needs, and arising opportunities (Sharma, 1990). If re-direction is determined as essential for growth of the micro-enterprise, the changes need to be marketed and the cost of implementing the changes accounted for. Awareness, Initiatives, Expansion and Re-direction are the four stages to micro-enterprise execution and development and are specific to aiding economic growth in underdeveloped countries.
From this general sense of micro-enterprise, the business owner can decide which route or business fits his or her needs. The production route would solely regard the maintenance of the beehives and the collection of honey. The producer would sell their un-bottled and unwrapped products in bulk quantities to another business or outside source that would be responsible for packaging and distributing or resale. The packaging route would not deal with the preservation of the beehives in any respect. They would exclusively be in charge of transferring the honey to appropriate containers or casing other products in a packing material with clear, legal labels. From here, the honey jars would be sold to distributors or distributed by the packagers. The honey products would be relocated to other shops and stands to be sold to the public. These shops would be mandated by the retailers who would not produce or package the honey products but would purchase the products at wholesale and would profit from selling directly to consumers.
Since micro-enterprises work on a smaller scale, any of these business options could potentially be combined and covered by one micro-enterprise. This layout also provides potential for a co-operative business venture if numerous micro-entrepreneurs were interested in working together to share the labour.
2.3.4 Benefits of a Cooperative
The primary focus of this project, in terms of business form, will be on the cooperative structure. This is because the cooperative provides a large number of advantages to the beekeepers who many have little significant prior business experience. While not necessarily being the most ambitious possible venture, it will provide at the very least crucial starting knowledge for the seven. The advantages of the cooperative are discussed below as well as some features of alternate business structures.
One characteristic of the cooperative model is the pooling of resources of its participants. In the case of the seven beekeepers, the primary resource that would be pooled is the product retrieved from the hives. Choosing to do this would provide the seven with a better “bargaining chip” when dealing with buyers, whether it be selling to a retailer or actually to a consumer. Negotiating selling prices would be much more difficult for an individual that is trying to strike a deal with a retailer. This is because the individual has less product to sell; thus the failure of a deal is less detrimental to the retailer, who can turn to another seller, than it is to the individual that now has a stockpile of product to sell but no buyer. From a marketing stand point, more of a product also means greater distribution. This, in turn, generates greater interest and provides an opportunity to share other services or events the company may be involved in. In addition, other resources can be pooled in a cooperative.
Less tangible resources can prove useful as well. Cooperatives also pool knowledge and skills. Thus a support system is inherently built into a cooperative. Members are able to communicate and help each other to solve problems. This is beneficial to all members as it allows the productivity and, correspondingly, influence of the cooperative to rise. An individual coming across problems alone is more likely to cease all business efforts than one who has others in similar situations willing to help. Although there is a team effort attitude associated with cooperative models, they still maintain the motivation of an individual profit.
The complication of a cooperative stems from the need for cooperation and communication. This sort of business would logically require more organization than more individual efforts. This could be achieved through a combination of elections for officer positions, weekly rotations of responsibilities, and permanent responsibilities for members depending on their personal skills. With exclusive responsibilities, however, comes the need for increased dedication as well as honesty. As there is bound to be some sort of conflict, the members need to agree upon a method of resolving said conflict. Options for this include votes resulting in the selection of one choice over another or compromise inclusive of the entire group. Some of this can be included in the co-operative’s constitution.
The idea of working as an individual is a risky one. In this case the individual must utilize essentially all of their own resources including money, labour, and time. Here, some method of loan is most likely to be necessary. While all business structures may benefit from a loan, a business conducted by an individual and his or her family is typically even more reliant, as they have less money to pool to start up the business. Support is also in short supply when one chooses to work alone.. Correspondingly, if the individual operator is not putting forth work, the business begins to collapse rather than simply being hindered as a cooperative would be. Given the lack of extensive business knowledge of the individuals, the co-operative is a more suitable choice.
From a professional stand point, achieving legal status as a co-operative, or any business type for that matter, delivers the benefit of respect and availability for loans and grants. If the beekeepers follow all of the rules and regulations needed and file all of the required documentation and paperwork, the legitimacy and credibility of their business group increases exponentially. There is no record of any other co-operative previously formed from Manenberg of the Cape Flats area of Cape Town. The process is long and wearisome and requires intensive momentum. The unfavourable reputation of Manenberg does not benefit the credibility of a non-official business group selling honey. Being legally recognized as a co-operative from the Cape Flats is an impressive feat that would catch positive attention.
Once a co-operative has been legally identified, the availability for loans and grants increases tremendously. The Department of Trade and Industry (DTI) offers a co-operative grant titled “Co-operative Incentive Scheme” which was emplaced in early 2006. This grant opportunity is specific to the development of co-operatives in South Africa and is willing to provide 90% of desired funds if the start-up co-operative can match the remaining 10% needed (COPAC, 2008). Grant opportunities such as this make a co-operative’s success plausible if a business group can receive legal recognition.
2.3.5 South African Law on Business and Sales
There are numerous laws concerning business and marketing in South Africa. The Department of Trade and Industry (DTI, 2005) provides this legislation via web access, keeps records on the success of past small businesses, and covers strategies for small enterprises and entrepreneurs. The DTI is currently assisting the Minister of Labour on lightening labour regulations for small businesses (DTI, 2005). Work has been started in this area by compiling recommendations provided by small businesses on how to better regulate the laws that affect them. Additionally, the DTI is strongly supporting the advancement of co-operatives. In 2004, A Co-operative Development Policy for South Africa proposal was published by DTI that insisted the South African Government’s endorsement of co-operatives and their mission to better the laws and regulations affecting the formation and functioning of co-operatives. The document covers the government’s goals for delivering South Africa’s first Co-operative Development Policy. A few of these goals include: “[reducing] the disparities between urban and rural businesses, [increasing] the number and variety of economic enterprising operating in the formal economy… [promoting] greater participation by black persons, especially those in rural areas, women, and persons with disability and youth [and establishing’ a legislative framework that will preserve the co-operative as a distinct legal entity” (DTI, 2004). These legal strides being pursued in South Africa brighten the future for co-operatives.
Presently and more specifically, one important law that beekeepers in South Africa would need to abide by is the Agricultural Product Standards Act, 1990. The CPTUB program covers the requirements of this act as well as efforts towards educating about impurities in honey that would not meet European and Western Civilization standards (Marchand, 2010). Other rules concern the subject of labels.
There are a few legal regulations that need to be adhered to in regards to labels. First, the beekeeper’s name and physical address must be presented on the label and must be a size of at least 1.5mm tall; second, the type of honey must be stated in a size of at least 4 mm tall; third, the grade of the honey, whether it be choice, standard, or under grade, needs to be at least 2mm in size and clearly displayed on the label (Marchand, 2005). These standards will affect the size and cost of the label designed for individual businesses and entrepreneurs.
2.4 The Honeybee Foundation and City of Cape Town’s Office of Sustainable Livelihood
Now that much of the business background has been covered, we move on to discuss Cape Town’s Office of Sustainable Livelihoods and our sponsor. In addition to these two entities, we will briefly mention the community of Manenberg. This section may provide insight into the major groups that we will encounter over the course of this project.
The City of Cape Town’s Office of Sustainable Livelihood creates programs to help better the lives of Cape Town residents. Their goal is to encourage “[lifestyles] where we take only what we need, and in meeting our own needs, we do not prejudice the ability of others to meet their needs, both now and in the future” (City of Cape Town, 2011). These goals are a part of the Agenda 21 program initiated in 1992. This government office made efforts to fulfil these goals by working with the Honeybee Foundation to support the apiculture training program. In teaching individuals the skills of beekeeping, the idea is that the economy can grow while providing employment opportunities and healthier lifestyle options.
The Honeybee Foundation is an established organization located in the Oude Molen Eco Village in Cape Town. Co-founded by Dominique Marchand, this business produces, sells, and educates about honey. The business also acts as a successful example of entrepreneurship in South Africa. They currently offer an extensive list of beekeeping services, products, and edutrouism/edutainment events and initiated the City of Cape Town’s Urban Beekeeping Project (CPTUB) in hopes to “stimulate the currently under-developed beekeeping industry in South Africa” (Marchand, 2010). Recently, seven individuals from Manenberg participated in the CPTUB training program and are prospective beekeepers. In proposing this project, Marchand expressed their need for assistance in implementing appropriate business plans as well as encouragement and support.
The seven beekeepers trained at Oude Molen come from the township of Manenberg. Manenberg is located in the Cape Flats area of Cape Town. While few well documented files on Manenberg seem to exist, some things are quite clear. It is quite apparent that gangs are a major problem of the area. Graffiti glorifying the life of a gangster is found throughout the town. In addition to this, there are many cases of domestic violence as well as large amounts of drug usage (United Nations Office on Drugs and Crime, 2011). A large portion of the residents live in poverty and struggle to survive. This understanding of the seven beekeeper’s home township is critical to assess appropriate business models as well as to appreciate the day-to-day life these individuals face.