Infrastructure Requirements for an Enterprise

Introduction

Infrastructure has a bearing on the practical implementation of all day to day activities. Examples are roads, transport, electricity, stores, houses, packing facilities and other support services. Infrastructure, therefore, supports the production process and can be either internal (on-farm) or external.

Infrastructure: Infrastructure refers to services and facilities that support day-to-day economic activity. Infrastructure includes roads, electricity, telephone service, and public transportation. Infrastructure has traditionally been provided and maintained by the government. However, some nations are currently experimenting with the privatization of some elements of the infrastructure as governments seek to cut their expenditures.

The Role And Function Of Infrastructure

The basis of a decision of whether to plant and develop a farming unit in a specific area will always be the production potential of the farm, with climate, soil and water as the most important aspects. Infrastructure, although important, will always be a secondary element in the decision-making process.

Although infrastructure will therefore not necessarily be a determining factor in whether to establish a specific farm, it does play a very important role in the planning process.

The infrastructure supports the production process. The size of the farm or planned enterprise determines the type and extent of the infrastructure which will be necessary. A large farm will need a large internal infrastructure to support all the many activities in the production process, and even for instance warrant a packhouse with all the necessary equipment and manpower. A small farm on the other hand would need to make use of more external support, as the extent of its activities would not warrant too large expenditure on internal infrastructure.

Other factors are considered with the establishment of additional production areas on an existing farm. Factors such as the utilisation of existing infrastructure and whether the chosen product will make a contribution to the current product mix will be the main considerations.

Internal (On-Farm) Infrastructure

The internal, or on-farm, infrastructure that is required is planned along with the orchard layout, as part of the land utilisation plan. On-farm infrastructure includes:

• Access roads
• Irrigation and water supply systems
• Electricity supply
• Communication systems
• Boundary fencing
• Structures, including:
  • Buildings
  • Vehicles
  • Housing
  • Farm roads

Access Roads

Access roads refer to roads that lead to the farm and are generally the concern of the local Department of Public Works or the local municipality. The quality of access roads must be considered when the decision is taken to develop a farming enterprise. These are the roads that workers must use to get to the farm, and over which produce must be transported to the packhouse or the market.

Irrigation and Water Supply Systems

The main aim of the development of an irrigation reticulation system is to optimise the use of energy. Placement of dams and pump-houses will therefore be critical in determining the cost of electricity for irrigation purposes. Infield irrigation systems also differ with regard to energy requirements.

Irrigation infrastructure includes:

• Dams
• Main supply – pump-houses and pumps
• Secondary reticulation (in-field) system

Electricity Supply

A cost-effective power supply system should be planned carefully to include the possible future development of production areas and infrastructure. Installation of new power supply points is costly and careful attention to initial planning will save costs at a later stage.

Electricity infrastructure includes:

• Main supply – buildings, pump-houses and pumps
• Reticulation to in-field installations

Communication Systems

Communication infrastructure refers to telecommunication and radio systems. In some areas, telephone connections are not available, which makes the management of a farming enterprise more difficult.

Boundary Fencing

A farm is private property and should therefore be well fenced off with limited access to ensure control of movement and necessary security.

Depending on what is required, the type of fence can vary from ordinary six-strand wire to stock-proof, game- or security fencing. The cost will also vary greatly and if the fencing on a farm is not suitable for the purpose when developed, it can be a large additional capital cost.

Structures

Buildings

Placement of the various buildings in relation to the other action centres and activities need to be considered carefully in developing a new farm. Offices, stores and a packhouse must be situated so that they will complement the farm activities as well as management and control.

Buildings include:

• Housing – permanent and temporary management and workers
• Stores – for vehicles, tractors, implements, chemicals, produce
• Offices
• Communication – telephones, radio and computers
• Vehicles and equipment

The appropriate equipment for the terrain and crop is essential. The output of tractors must for example be linked to the equipment which has to be handled, e.g. ploughing, spray machines, picking trailers, etc.

Housing

The extent of housing needed on a farm depends on the size of the farm as well as the distance to the nearest labour source or town. The number of houses that are required increases with the distance from a town or labour source and provisions must be made for management, middle management and supervisory staff.

Farm Roads

Main roads on a farm should be positioned to serve all main action areas without causing too much farm traffic in and around production areas. It is ideal to have the offices, packhouse, stores and housing area situated as near as possible to the farm entrance, so that movement in and around production areas is limited and only linked to production.

External Infrastructure

External infrastructure depends on the location of the farming unit. The transport of supplies and products over long distances from remote farming units is costly and has a negative impact on the efficiency of production management.

The following factors must be investigated carefully:

• Locality
• Availability of service providers
• Community services

Locality

The following is important in terms of locality:

• Surrounding production area
• Proximity to town
• Road and rail transport
• Well-developed access roads
• Distance to packhouse and road condition

In many parts of South Africa, local production areas are well established. This manifests itself in the products and services available for specific commodities, as well as expertise regarding all production orientated activities. Consider the infrastructure around the Western Cape and around Upington for the production of grapes or the production of sugar cane in KwaZulu Natal.

Availability of Service Providers

The availability of the following types of services providers must be taken into account:

• Suppliers of equipment and stock
• Maintenance services, irrigation design and installation
• Extension services
• Packhouse and cold storage

Service providers, to a large extent, oil the wheels of an enterprise by providing support and production materials in the technical and maintenance fields. Ease of access to their services and goods, therefore, plays an important role. Day-to-day management becomes more and more demanding and costly with the distance, and therefore availability, of service providers.

Community Services

The following community services play an important role:

• Shops
• Schools
• Medical services
• Churches

Farming enterprises in outlying areas have to make additional provisions in remuneration and time for employees and their families to enable them to access the above services.

Evaluating Existing Infrastructure

When a farm is being purchased as a unit, the existing internal infrastructure must be evaluated to ensure that repairs or redevelopment of infrastructure will not lead to high additional costs.

Fencing

Establish whether the fences around the farm have been erected according to the title deed of the farm. This is easiest done by having the farm surveyed.

All fences should also be in a good condition and effective for what is required, for example, a cattle fence will not control the movement of a game or be effective as a security fence around a citrus orchard. Having to erect new fences is costly and should be considered during the purchase

Housing

If there is insufficient housing on an existing farm, developing additional housing is a major factor to be considered as it requires substantial capital outlay.

Good and sufficient housing on a farm is, therefore, a positive factor. Even with enough housing, the placement of the houses in relation to the workplace, farm entrance and watercourses can pose problems with regard to transport, security and pollution.

The quality of the housing with regard to water supply, electricity, ablution and runoff has to conform to health, safety and Eurepgap requirements.

Water Supply

Water supply has to be sufficient for both farming activities and domestic purposes, and water sources must be tested for quality. Ensure that the sources are sustained throughout the year and that enough water is available in dry seasons.

A good reticulation system for current and planned plant production areas, as well as for the housing, offices and other infrastructure must exist.

Electricity

Electricity supply to housing, offices, pump-houses and other structures is required. The quality of the reticulation system, as well as wiring in all existing structures, must conform to local government standards and safety regulations in the Occupational Health and Safety Act.

Roads

The two points to consider are access to the farm and access on the farm to offices, workshops, orchards and other structures like stores and a packhouse.

Access onto the farm should be secure and the entrance controllable. Access on the farm to the various workstations and production areas should be such that the daily traffic does not impact on production areas of the farm.

Placement Of Internal Infrastructure

Ideally, all offices, workshops, packhouses and housing should be placed near the borderline of the farm and in the vicinity of the entrance. In this way, the buildings can be accessed easily, but access can be controlled for security purposes.

The logistics of transporting produce should be considered when placing loading areas and storage (as per the enterprise) so that there is minimum time lost in transporting produce.

Water and electricity distribution must be well planned with cost-effective reticulation systems with provisions made for the handling of sewerage and wastewater to prevent polluting water sources.