SA Land Focus is Misdirection – Part 2

Feb 17, 12 SA Land Focus is Misdirection – Part 2

*This is the second in a two-part look at the role of land in the current land reform debate in South Africa.

The second unexamined assumption in the current land reform debate is the idea that poor rural people aren’t making it in farming because they don’t have land. There are roughly 1.5 million poor families in South Africa producing agricultural products (crops, vegetables and animal products) at a subsistence level. All 1.5 million of them have access to some land. Whether they own that land or not, they have sufficient security of tenure to plant and harvest and/or raise animals. Many would probably like more land – who wouldn’t – but it probably won’t make them more successful.

Contrary to what appears to be South African popular belief, large-scale commercial farming is not always the best or most cost-effective way to produce food. Some food products are better suited to small-scale production. This is part of the reason that a good proportion of Europe’s very successful farmers practice what would be considered small-scale farming if they were in South Africa. Climate also plays a role. That is why the Australian Outback, like the Northern Cape, tends towards larger farms. Profitable farming is about production values, quality, market access and input and transport costs. Beyond an absolute minimum necessary to produce anything (and this is a very small minimum, particularly for vegetable farming), the size of the land is a factor in deciding what to farm, not a determinant of success.

The point is that farming can be commercially-viable at all scales. Perhaps not all of South Africa’s subsistence farmers could produce at a commercially-viable small-holder farmer level, but a good proportion of them, perhaps 80%, could well be producing commercially with the land they currently have access to. The difference between a subsistence farmer and a profitable small-holder farming enterprise is whether the farmer is able to make money from what they produce, both in terms of immediate profit and to reinvest to grow and expand the farming business.

But money doesn’t come because you grow more, it comes because you are able to sell more. South Africa’s retail sector is heavily centralised. Local shops disappeared decades ago in most places, giving way to large chains-stores. One of the key characteristics of large-scale retail everywhere is a tendency to centralise buying. Established farmers in South Africa may well have the capital to transport produce quickly and safely to central markets. Small-holder farmers, like most small-business owners, struggle to absorb the additional costs. Our food retail system is structured in such a way that are unable to sell at a profit. They are excluded because they can’t afford to get to the major centres and nothing in the system incentivises retailers to go out and source what may well be higher quality, lower-cost products for their consumers.

Because of the structural realities of the South African food system, existing small-farmers (many of whom are non-white farmers who have been trying to make a rural living for years) cannot use their land, their hard work and the expertise they have to make a living and grow their small-farming operations. The government appears unwilling to challenge this food system in any way, so small farmers are not growing and developing emerging businesses to fill the gap left by the exit of many existing commercial farmers (over the past 10 years, the number of commercial farmers in South Africa has dropped from 100 000 to 42 000). South Africa should have a thriving, rapidly developing agricultural sector building on years of excellent research, thousands of small-scale farmers willing to take on the challenge and huge market opportunities in Africa and overseas. Instead, our agricultural sector stagnates, while the government fixates on land reform.

Nor would addressing market access break the bank. Simple investments in infrastructure could make a huge difference – improving rural infrastructure to reduce the transport costs, building markets in outlying areas, supporting the development of intermediary businesses to buy from farmers and sell to large retailers. Big retail could also come on board and commit to buying more locally and selling fresh, instead of freezing and shipping food across the country. Local markets available to the public and smaller shops could revitalise a lot of small centres.

If the government was serious about building a sustainable, profitable, multi-racial (or even non-white) farming sector, they’d be looking hard at how to support existing small-holder farmers to expand their operations and supporting the great work some of the government extension workers and cooperative experts are already doing in this sector, while also finding ways to recreate the food system so that small-holder farmers have access to markets. Land alone won’t fix the farming sector.

Image by Kevin Dooley