‘Uncompetitive environment for farmers’

Lack of transformation and the progression towards fewer, larger farms in South Africa’s agriculture sector remain a bone of contention for those seeking greater inclusion in the sector. However, the lack of service provision and infrastructure maintenance is proving to be the biggest hurdle preventing a larger, more diversified farming sector.

Malapane Thamaga, agricultural economist at the African Farmers’ Association of South Africa, told Farmer’s

Weekly that he believed government had inadvertently created a climate in which only the bigger farmers could survive.

“Farmers face many challenges and receive no government support. Economies of scale bring down the cost of production, which means that bigger farmers have a better chance than smaller farmers of succeeding and hedging risk.”

Henry Geldenhuys, president of TAU SA, described scenarios in which farmers could not afford to put in place risk mitigation practices, such as burning firebreaks or fighting fires when they occurred.

“How can these farmers fight fires when they don’t even have the equipment to do so? When their farms burn down, they have no option other than abandoning farming.”

Thamaga noted, however, that economies of scale did not mean that large farms could survive indefinitely.

“The challenges they face make them vulnerable to collapse, and when they fall out of the system, it leaves a far bigger gap in food production than a small-scale farmer shutting down.

“In addition, the number of family farms is decreasing as children choose city-based careers instead of farming due to the challenges faced by their parents. This will catch up with us in the next 10 to 20 years,” Thamaga said.

Addressing concerns over the dominance of some farmers in certain produce sectors and the possible uncompetitiveness it could create, Prof Johann Kirsten, director of the Bureau for Economic Research at Stellenbosch University, said this dominance had not happened because of uncompetitive practices.

“It happened through gradual expansion and specialisation by farmers, and economies of scale. Without any government support to agriculture, rampant crime, excessive logistical costs, poor roads and electricity shortages, as well as underfunded research and development in these sectors, it’s no wonder farmers have to do everything themselves. And the only way they can fund these ‘support services’ is to grow their businesses. It’s the failure of the state that has contributed to them trying to survive by enlarging their businesses.”

Thamaga said he believed that small commercial farmers could produce food despite the many problems they faced.

“We must not underestimate their passion and commitment […] But government will have to play its part in agriculture. What is currently being done is simply not enough.” –