“Agricultural industrialisation was sparked by recent political developments in our country’s democratic transformation,” said Mpumelelo Mkhabela, editor of the Sowetan during last night’s Soweto TV debate. “It opened up many business opportunities, new markets, free enterprise, movement of people and trade in the rest of the world. Farmers are now able to diversify their investments.”
During the previous 10 – 20 years, agriculture has shed approximately 500000 jobs. The sector, however, still employs another estimated 500000 people –which is more people than currently employed by the mining sector.
“In the industrial (or commercial) agricultural production sector, consisting of approximately 8000 farmers, no jobs were lost during the same period. Although these farmers imported technology and mechanised their farms on a large scale, they also expanded their businesses exponentially,” said political analyst, Piet Croucamp during a recent broadcast of the Nation in Conversation dialogue series. The series is currently being broadcast on Business Day TV and Soweto TV, with a similar series of programmes which are scheduled for broadcast on kykNETt from 02 October 2015.
Agriculture has shown 30% growth since 1990. This growth spurt was particularly experienced within the commercial agricultural sector, now leaving 80% of the country’s food production in the hands of 20% of the agricultural sector.
These developments, however, have placed a burden on typically family-run farms and communal farmers to stay the pace and remain economically viable. The majority of job losses in the agricultural sector in recent years occurred in the family-run farming sector.
“This is largely due to political uncertainty and economic pressures,” explained Croucamp. “It is clear that commercial farming is the way forward to upscale people, improve access to land and grow the economy. Agriculture currently forms 2% – 4% of the gross domestic product (GDP). I see no reason why it cannot expand to somewhere between 5% and 7%.”
Large economy of scale farmers are very successful in penetrating new markets, empowering people and broadening the base of dividend and wealth spread in agriculture in South Africa.
“I am busy quantifying the empowerment projects launched by big farmers in South Africa. It will dwarf the efforts made by the State thus far in terms of real impact black economic empowerment and wealth creation. These farmers are proving that industrialisation allows for the redistribution of land in a sensible way which benefits all role players – workers, owners and society at large,” said Croucamp.
Mkhabela agrees that two important aspects are currently shaping the country’s agricultural heritage – farmer initiatives and Government policies.
“The Government missed their target to redistribute 30% of productive land to black owners by 2014. As a result new policies and legislation are now being formulated to address this issue. Whilst Government is grappling with the solution, farmers are taking the lead.”
However, there is no singular solution to changing the South African agricultural landscape.
Commercialisation begs the questions:
What is happening to traditional, communal farmers in this sector and how can they become more viable?
“Transformation in agriculture also has to capture the dynamic of communal farming practices in our country,” said John Gibbs of the InTransformation Initiative spearheaded by Roelf Meyer.
Ways need to be found to develop traditional and emerging farmers into economically viable agricultural production units. Many rural communities live in abject poverty. “It is in this space that Government and the private sector can play a role to lay the foundation for growth,” said Gibbs. “We are making significant progress in developing principles which will eventually inform policy positions.”
This will go some way in laying the foundations for more effective public-private partnerships in this sector.
“We need a completely different mindset in communities who still operate within a communal land system. Business models need to be developed to provide these farmers with access to capital and an ability to grow their production capabilities. At the very least, we need to encourage cluster farming, where various subsistence farmers on small holdings can group together to increase their production yield, improve market access and jointly reap procurement benefits,” stressed Mkhabela.
“A huge part of land under the communal ownership system lies wasted. Subsistence farming feeds the family, but in order to grow wealth, a new approach is required. The only way to do that is to get out of the system which is partly imprisoning people,” said Mkhabela.
Stability in the agricultural sector will be secured through various new approaches to the redistribution of land, new ownership models and effective partnerships in this sector. There is no doubt that the agricultural landscape will look very different in 10 to 15 years.
“The changes agriculture is facing can be positive if all stakeholders in this sector work together towards laying the foundations of the future,” ended Gibbs.
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