Most South Africans realise the importance of a prosperous, representative agricultural sector. It should be a socio-political and economic priority, promotes a stable society, food security and prosperity. However, the reality unfortunately looks different. Conflict and inadequate land reform do not help the situation.
Established and emerging farmers become discouraged because investment in land reform and development does not keep pace with political rhetoric. In light of the COVID-19 pandemic, a fresh perspective of the agricultural sector is necessary to stimulate the economy’s recovery. A policy framework that addresses sector diversity will stimulate development. It is essential and urgent.
The role of agriculture
Worldwide agriculture plays a critical and ongoing role in progress. Since the 1960s, we have known that a stable, productive agricultural sector remains a condition for long-term growth.
Development is typically accompanied by a relative decline in the sector’s size, with capital flows to industry. However, agriculture’s contribution remains relevant. The labour force and contribution to GDP shrink, but productivity increases. As agriculture becomes more successful, other sectors become larger, and opportunities increase.
Since the financial crisis of 2008, there has been renewed interest in agriculture worldwide – given the realisation that agriculture contributes proportionately more to poverty reduction than any other sector.
Although agriculture’s primary role is to generate food, employment, income and savings and to supply primary products to industries, the sector’s role goes beyond that. It provides makes an indirect contribution to conservation and tourism, water, biodiversity, carbon sequestration, food security, poverty reduction and social stability.
Slow progress in agriculture
Due to higher productivity, less dependence and better international competition, the local agricultural sector is in a stronger position after 1994. However, investment in the sector could improve.
Investment in research, training and infrastructure is insufficient, and flawed transformation into a more inclusive agricultural sector is the biggest challenge to sustainability.
A study of local land reform does not paint a good picture. It is a long, complicated process that requires investment, and there is little to show for it in terms of results. Land reform is characterised by a lack of consultation and local planning, as well as underperforming public institutions that lead to poor implementation and corruption.
As elsewhere in the world, the land issue is abused for political gain, while its complexity is being overlooked. The lack of monitoring also seems to be a significant limitation.
The Presidential Advisory Panel on Land Reform and Agriculture, which submitted their report in 2019 made it clear that the State is responsible for the failure of land reform. The problems include a lack of capacity, coordination with sector players, and limited and misplaced investment, which is complicated by corruption.
The Panel mentions that the fragmented administration does not function at all in some places, fraud is rife and prosperous non-farmers are often given priority over the actual target group, namely poorer, emerging farmers.
A lack of critical information
In a 2019 article, Wandile Sihlobo, chief economist at Agbiz, and Prof Johan Kirsten calculated that 15% of commercial agricultural land had been transferred to black farmers over the past 22 years. Unfortunately, the potential of the land is not fully exploited due to a lack of planning, support, and market penetration.
Almost all analysts are critical of the impact of land reform and indicate that it does little to improve the living conditions of beneficiaries.
A critical limitation is that all beneficiaries are treated the same way. The assumption is that new entrants are homogenous and therefore have the same needs, objectives and skills. Consequently, support plans make no provision for any differences.
There is a lack of reliable information about South African farmers – especially black farmers. The government does not have reliable data about the number and ethnicity of farmers, where they are, what they do, their level of productivity and contributions to the market. The private sector has some of this information, but it is mostly limited to direct clients. This information vacuum is a severe limitation.
A tailored approach for farmers
If more information about different types of farmers was available, they could be given targeted support to meet their needs. In this regard, the l Panel made a valuable recommendation.
The report states that the State’s support services should recognise diversity in the sector, and suggests a ‘30:30:30:10’ approach.
About 30% of beneficiaries should be households with limited access to land. Although a need for land is common in rural populations, most people do not want to run large farms. Instead, they want a piece of land on which to erect a dwelling and perform low-input agricultural activities to supplement income.
The next 30% of beneficiaries should be typical smallholder farmers who often produce more than they utilise in a relatively small farming enterprise and have other sources of income. A further 30% of support could focus on potential medium-scale farmers who can expand. Typical large-scale farmers with the potential to grow then comprise the last 10%.
The proposed definitions of these four types of farmers are simplistic, but at least they are a step towards more focused services.
The importance of useful data
It is evident that farmers differ and are not supported accordingly. What needs to change? More focused support requires better-quality data, which should lead to more diversified services for diverse types of farmers – as is the case in Europe. We therefore need more information about our rural population in order to make better plans.
This information about farmers and their industries can be used to develop a farmer typology. Such a typology describes farmers’ technical and economic characteristics, income levels, preferences and market integration, which can then guide the design of services, and play a major role in the orientation of policy-making regarding food security, poverty reduction, and sustainability.
Information of interest includes farmers’ input, output and performance, as well as labour force, area utilisation, cost and sales. A holistic typological study looks at economic, social and environmental dimensions
A global study of typological work indicates that seven indicators best indicate differences between farmer types: the size of the farm or operation, investment in the industry, role of non-farming activities, level of specialisation, degree of market orientation and performance levels.
A rigid, simple development initiative is not a realistic strategy in a heterogeneous rural environment. Differences in functionality, access to services and resources, skill, attitude, and goals should be considered in the design of support services.
By recognising different types of farmers, the tendency to serve a fictitious ‘typical’ farmer can be avoided. Diversity in the sector shows that the system is adaptable to different situations.
A final thought
Differences in economic size in terms of land, capital and labour help us to understand farmers’ choices and achievements. The use of a farmer typology can explain agricultural realities and facilitate solution design.
Better data, monitoring and a national database, as is the case throughout the European Union and in the United States, should be a priority for the agricultural sector in South Africa. Still, policymakers must first realise how critical reliable information is in the process of supporting farmers. – Dr Aart-Jan van Schoor, FarmBiz
For more information, Dr Aart-Jan Verschoor on 084 505 3647
or send an email to AartJan@arc.agric.za.