But this article is another stark reminder of the realities facing SMEs and farmers and why we struggle to get job creation and growth going in South Africa:
I know I shouldn't write when I'm frustrated. But sometimes things simply need to be said.
I started where many South African farmers do - on my parents’ farm. There, as a young man, I learned not just to manage everything from foot rot in sheep, to calibrating a crop sprayer - but also to fill out compliance documentation.
The regulatory burden seems to be increasing exponentially. It’s not just farming. It’s full-spectrum entrepreneurship.
Fast forward to the boardrooms and corporate offices I later worked in - suddenly, every one of those tasks had a team behind it. A whole tax department to claim back a single tax line item. Dedicated HR, legal, logistics, and finance teams to manage compliance, operations, and reporting. But the farmer? Or any SME owner? They carry all of that alone - or subcontract every sliver of it, at a cost they can barely afford.
Farmers Are SMEs, And SMEs Are the Backbone of Our Economy.
Farmers aren’t just producers. They are employers, investors, risk managers, mechanics and innovators. Farmers are family businesses and run small and medium-sized enterprises (SMEs) in every sense. But unlike big corporates, they must do it all - from fixing the water pump to managing commodity hedging - often from a bakkie, with no Wi-Fi and no compliance officer in sight.
Working close to farmers again, I hear the stories daily:
- A combine harvester stuck in the field - with cash flow tied up in a VAT refund that’s been pending for 8 months.
- A diesel rebate under audit - while also begging the municipality to repair potholes so that a truck can reach the silo.
- A seed delivery delayed because a necessary certificate wasn’t signed off in time.
- A decision: fix the baler tonight- or prepare paperwork for the labour inspector?
This isn’t just a farming issue. It’s an SME crisis. And it’s happening everywhere.
The data is clear: SMEs drive growth, jobs and resilience
- SMEs contribute nearly 40% of South Africa’s GDP and 60% of private sector jobs (SEDA, 2023).
- Globally, SMEs represent 90% of businesses and over 50% of jobs (World Bank, 2024).
- 4 out of 5 new formal jobs in developing economies are created by SMEs (The International Labour Organization (ILO))
- Meanwhile, in South Africa, we’re seeing rising SME failure rates, mostly due to red tape, tax stress, and cash flow pressures.
So why do we make it so hard for the very people that create jobs and are doing the hard work?
The Regulatory Playing Field Isn’t Level
Large corporates can absorb the administrative load brought by regulations. They’ve got the lawyers, consultants, software, and tax planners - and let’s be honest - the influence. None of this is illegal. It’s just the reality.
For SME’s, it’s a different reality. The same regulatory rules are “copy-pasted” for small and medium businesses, small farms, and township start-ups. And it breaks them.
It's not a question of willingness. Farmers and SME’s want to comply - they do. But the system was built for companies with back offices, not back roads.
Yes, they can outsource and subcontract - but that adds cost. If you need to pay someone to manage your diesel claims, VAT, UIF, skills plans, HR, tax, BEE, and labour compliance… you’re not building a business anymore. You’re just paying to feed the bureaucracy.
Are We Ganging Up on Small Business?
At Grain SA, we understand SARS’s role. We want a capable, functioning state. But the system – especially under current frameworks like the diesel rebate process - is choking small business out of the economy.
We’re already seeing the consequences:
- Fewer new SMEs being formed.
- Farm consolidation accelerating - not always by choice.
- Rural job creation is stagnating, especially in youth and female-led enterprises.
- Economic growth losing steam.
The question is: Are we unintentionally ganging up on the very people we rely on to feed us, employ us, and grow the economy?
SMEs don’t need special treatment - just a regulatory system that works with them, not against them. Some international best practices show the way (New Zealand even established a ministry for this Ministry for Regulation):
- Scaled compliance: clearer rules or simplified processes for small enterprises.
- Accelerated VAT and diesel refunds for compliant, small and low risk taxpayers (such as farmers).
- Less punitive audit frameworks - not every mistake must result in a court case.
- Access to digital tools that actually reduce admin burdens and make compliance simpler, not more complex.
- SME representation in regulatory design - not just in consultation phases, but in designing SME appropriate implementation itself
We must start treating SMEs - especially our farmers - not as outliers or tax risks, but as the engine of economic recovery.
If South Africa is serious about transformation, job creation, and rural development, we need to fix this. That includes rethinking how we regulate, tax and support SMEs – and especially our farmers.
Let’s build a system that recognises the reality of a single entrepreneur doing the work of ten people.