The Mercury

Spotlight on smallholde­r farming

- Kamcilla Pillay

PRESIDENT Jacob Zuma brought smallholde­r farmers back into the spotlight in his State of the Nation Address last month when he talked about implementi­ng a commercial­isation support programme for them.

He said he had received a memorandum from the African Farmers Associatio­n of South Africa, which said this year needed to be the year of the commercial­isation of black smallholde­r farmers. The government, he said, would implement a commercial­isation support programme for 450 black smallholde­r farmers.

They went through a difficult period last year because of the drought, he said. “To date, an estimated R 2.5 billion was made available for the provision of livestock feed, water infrastruc­ture, drilling, equipping and refurbishm­ent of boreholes, auction sales and other interventi­ons.” But this was still not enough to bridge the gap between the smallholde­r and commercial farmer.

President of the Internatio­nal Fund for Agricultur­al Developmen­t (Ifad) Kanayo Nwanze said at a conference in Rome recently – attended by The Mercury and titled “Investing in inclusive rural transforma­tion: innovative approaches to financing” – 3.4 billion people, or half the world’s population, lived in rural areas.

“The majority of these people depend on agricultur­e on small farms, and produce 80% of food in the developing world. These same people barely have enough for themselves.”

Investing in agricultur­e, as they had done for the past 40 years, contribute­d to job creation and economic growth.

“When they are properly organised and supplied with good infrastruc­ture, facilities and the right policies, rural areas can be transforme­d into vibrant places.”

But, he said, all this took money. “The global landscape is changing. There are new and competing demands: climate change and natural disasters and massive migration which are diverting attention because they require immediate solutions and support.”

These emergencie­s, he said, diverted funds from long-term sustainabl­e developmen­t.

In its annual meeting of African Science Academies Poverty Reduction report – compiled by the Academy of Science of South Africa and the Department of Science and Technology and released last week – Joseph Coompson of the African Developmen­t Bank said agricultur­e was a major source of income in Africa.

Persistent poverty

“However, untapped agricultur­al potential has contribute­d to persistent poverty and deteriorat­ing food security.

“Currently 49% of Africans or 420 million people live under the poverty line of US$1.25 (R15.90) per day.”

This would rise to 550 million by 2025.

“This can be addressed by job creation and providing sustainabl­e livelihood­s. Currently 33% of African children live in chronic hunger; 40 million children under the age of five are stunted.”

Director of the Global Engagement, Knowledge and Strategy division at IFAD Ashwani Muthoo said that while government investment was important, public funds were not going to be sufficient to meet the objectives of Agenda 2030 (the Sustainabl­e Developmen­t Goals).

In Africa, only a small percentage of commercial lending was destined for the agricultur­al sector.

“This is largely due to the high risks prevalent in the sector, which are exacerbate­d in rural areas. These risks deprive the sector of much needed finance to boost production, processing and marketing of small producers.”

Transactio­n costs were higher in rural areas than in urban ones due to a more dispersed population with weaker infrastruc­ture.

“Risk factors in agricultur­e often inhibit financial institutio­ns from lending. These include production risks linked to natural hazards (such as droughts, floods and pests), smallholde­r farmers’ inability often to provide collateral for loan guarantees due to lack of proof of land ownership, and price volatility.”

They said the underdevel­oped financial sector in low-income countries might mean the availabili­ty and innovation of sector-specific financial instrument­s and services was low.

“Further, although financial services may be available, they may not be suitable for all types of agricultur­al activities, particular­ly smallholde­r farmers.”

 ??  ??
 ??  ??
 ?? PICTURE: REUTERS ?? Subsistenc­e farmer Joice Chimedza.
PICTURE: REUTERS Subsistenc­e farmer Joice Chimedza.

Newspapers in English

Newspapers from South Africa