Help the small farmer find road to market

LOGISTICAL efficiency plays a key role in our modern market environment since it reduces the constraint of geographical distance. It is, therefore, not surprising that a maize farmer in Sinaloa, Mexico, has a better chance of accessing markets in SA than a smallholder maize farmer in Mqanduli in the Eastern Cape.

Some might argue that differences in economies of scale also have a bearing on market access. However, the critical factor remains infrastructural challenges, such as secondary roads and lack of storage capacity (silos) that continue to confront South African smallholder farmers, limiting their ability to access markets.

I recently engaged some smallholder maize farmers from the Eastern Cape to get a sense of their crop conditions as the harvesting season fast approaches. Almost all of them acknowledged the negative effects of the drought, but remained optimistic that their final yields might not be as low as in other provinces, such as North West and Free State, which have been particularly hard-hit by the drought. The average commercial maize yield in the Eastern Cape is about 5 tonnes per hectare, although it is expected to be lower this season due to the drought.

SA has a dualistic agricultural system — a large-scale commercial sector and a smallholder sector. This is linked to the historical context of our country, dating as far back as 1913.

In his research at Stellenbosch University, agricultural economist Louw Pienaar noted that before 1994, agricultural policy focused on the development and support of the commercial sector, to the exclusion of smallholder farmers. This partly explains the duality of the sector.

Despite the limited support smallholder farmers received historically, they still have the potential to make a significant contribution to domestic food security. As a rule of thumb, an average family of six consumes one tonne of maize a year. Maize farming families that harvest more than one tonne have a surplus that can be sold on the local market, and these surplus tonnes can make a significant difference to neighbouring towns when pooled, since the country is expected to import 1.1-million tonnes of white maize and 2.7-million tonnes of yellow maize this season due to drought.

The government and organised agriculture have made significant strides in harnessing the potential of smallholder farmers and tackling their developmental challenges.

Since 1994, the government has established a number of interventions, such as the Comprehensive Agricultural Support Programme, the Micro Agricultural Financial Institutions of SA and many more, aimed at upskilling smallholder farmers. At the same time, organised agriculture has been involved in training many smallholder farmers across the country.

There have also been developmental efforts from financial institutions, such as the Old Mutual Masisizane Fund that, together with the government recently, invested about R46m in farming areas around Matatiele in the Eastern Cape.

This aims to help farmers acquire agricultural implements that could help them improve economies of scale. However, there has been a critical oversight in developing their opportunities for market access.

As a result, smallholder farmers continue to struggle to deliver their produce, in good quality and on time, to the consumption points in society. There is good demand in the market for all their produce, but the channels to reach those consumption points remain a key challenge.

Organised agriculture is doing a commendable job in upskilling farmers on the production side. However, it would be beneficial for all if the government could change its focus and invest more funds into the development of public infrastructure and leave efforts to improve productivity to organised agriculture. Such investments would enable smallholder farmers to transport and store their produce, and only sell it when market conditions allow for profits.

By selling when prices are most favourable, smallholder maize farmers might be better able to cover their production costs and make a significant profit. Over time, a gradual improvement in the viability of smallholder farming will enable them to grow in scale and even transition to fully commercial operations.

Agriculture’s potential to unlock the rural economy will also not be exploited efficiently if the road and rail network remains inadequate and power is in short supply.

It is such infrastructure, not only production skills, that empowers farmers to access markets and will unlock SA’s rural economy.

In the end, we make a limited impact by teaching a man how to sow maize without crafting a path for him to access the end-markets.

Sihlobo (@WandileSihlobo) is an economist at Grain SA. He writes in his personal capacity.

There has been a critical oversight in developing opportunities for market access