Farm­ers need se­cu­rity to do the job

A com­bi­na­tion of drought, land re­form, VAT and fuel hikes, ex­change rates and cli­mate change have put the sus­tain­abil­ity of SA’s agro-food sys­tem to the test, writes Alan Winde

Weekend Argus (Sunday Edition) - - OPINION -

LAST week, the Bureau for Food and Agri­cul­tural Pol­icy re­leased its an­nual medium-term out­look for the Western Cape’s agri­cul­ture sec­tor. Over the years, the re­port has ac­cu­rately pre­dicted lean years and abun­dant years for the sec­tor. The 2018 re­port is unlike any other we’ve seen be­cause the sec­tor is fac­ing un­prece­dented chal­lenges.

It is widely known that the drought which con­tin­ues to grip the East­ern and Western Cape is dras­ti­cally im­pact­ing pro­duc­tion.

De­spite this, large-scale, smallscale, emerg­ing and com­mer­cial farm­ers have con­tin­ued to farm.

Through smart agri­cul­tural prac­tices and their own in­ge­nu­ity, they are adapt­ing to new cli­mate re­al­i­ties.

But for our farm­ers, when it (doesn’t) rain, it pours. The ANC gov­ern­ment and EFF’s pro­posed new pol­icy to ex­pro­pri­ate land with­out com­pen­sa­tion is serv­ing to dras­ti­cally un­der­mine the sec­tor.

Just this week, the Land Bank said that should ex­pro­pri­a­tion with­out com­pen­sa­tion go ahead in a reck­less man­ner, the bank’s R9 billion debt book would be­come payable im­me­di­ately. Fail­ure to pay that, would cause its en­tire fund­ing port­fo­lio of R41bn to be­come payable – some­thing that would re­quire a gov­ern­ment bailout.

De­spite fur­ther clear mes­sages around the chal­lenges of the pro­posed pol­icy put out by Trevor Manuel, who was hand-picked by the Pres­i­dent Cyril Ramaphosa to garner in­vest­ment, the ANC has re­mained stead­fast in push­ing it through, putting hun­dreds of thou­sands of jobs at risk.

On the same day Ramaphosa an­nounced his party’s com­mit­ment to challenge sec­tion 25 of the con­sti­tu­tion, the of­fi­cial jobs data re­lease showed yet an­other in­crease in the na­tional un­em­ploy­ment rate.

“The de­ci­sion to in­vest hinges on one ba­sic tenet, namely the be­lief that there will be growth in the fu­ture,” the re­port’s au­thors state.

They con­tinue that “with­out con­tin­ued in­vest­ment, the value of agri­cul­tural ex­ports could de­cline 40%, and 30% of jobs in high-value ex­port crops could be lost”.

In a coun­try where more than a quar­ter of peo­ple are al­ready un­em­ployed, a 30% re­duc­tion in jobs in high value ex­port crops is some­thing we can ill af­ford.

A com­bi­na­tion of drought, land-re­form pol­icy, in­creas­ing VAT and fuel costs, ex­change rates and cli­mate change, led the au­thors of this year’s re­port to con­clude that “the true level of com­pet­i­tive­ness and sus­tain­abil­ity of the South African agro-food sys­tem on the global stage (is due to be) tested thor­oughly”.

The rand has not been able to hold its own since the an­nounce­ment of ex­pro­pri­a­tion with­out com­pen­sa­tion.

The ANC’s “new dawn” promised GDP growth of 3%. But as the sun sets on that new dawn, lat­est pro­jec­tions are at 1.4% growth.

It is likely that un­der cur­rent cir­cum­stances, we won’t even achieve this mea­gre fig­ure, leav­ing even more cit­i­zens un­em­ployed.

In our al­ready chal­lenged jobs en­vi­ron­ment, fur­ther un­nec­es­sary set­backs are un­bear­able – par­tic­u­larly since the pol­icy, with some im­prove­ments and bet­ter man­age­ment, does have the power to trans­form agri­cul­tural land own­er­ship while grow­ing the econ­omy and com­mer­cial agri­cul­ture, and sup­port­ing emerg­ing farm­ers.

In the Western Cape, land re­form is cre­at­ing suc­cess stories – among them Bos­man Adama, Com­pag­nies­drift and Thokozani wines at Diemers­fontein – prov­ing that a con­sti­tu­tional change is un­war­ranted.

We be­lieve that the rea­son Western Cape gov­ern­mentsup­ported land re­form projects can boast a 62% over­all suc­cess rate is be­cause we have part­nered with com­mer­cial farm­ers, the pri­vate sec­tor and in­dus­try and recog­nise the need for on­go­ing sup­port, and ac­cess to mar­kets for ben­e­fi­cia­ries.

The only rea­son the rest of the coun­try has not also seen sim­i­lar suc­cesses is due to the poor sup­port of as­pir­ing and emerg­ing farm­ers by the ANC in power.

Ac­cord­ing to the re­port, of the 78 mil­lion hectares of farm land in South Africa, just 10% has been al­lo­cated to ben­e­fi­cia­ries via re­dis­tri­bu­tion or resti­tu­tion since 1994.

A fur­ther 3.7% of land formed part of claims where com­mu­ni­ties set­tled for fi­nan­cial com­pen­sa­tion in­stead. This is slow go­ing.

In 2017/18, a mea­gre 10 800ha of land was re­dis­tributed to ben­e­fi­cia­ries. To put this into per­spec­tive, Ramaphosa’s own farm, Ntaba Ny­oni, in Mpumalanga, is said to be about 5 000ha.

Fur­ther­more, un­der the land re­form dis­pen­sa­tion, farm­ers do not ac­tu­ally own their farms.

The gov­ern­ment is sup­posed to be leas­ing land to ben­e­fi­cia­ries, which is ba­si­cally the EFF’s land re­form pol­icy.

I say “sup­posed to be” be­cause the ANC-led gov­ern­ment has been slow to hand these out.

In the Western Cape, of the 60 farms ac­quired by the Depart­ment of Ru­ral De­vel­op­ment and Land Re­form through the Proac­tive Land Ac­qui­si­tion Strat­egy, less than half have long-term leases (of 30 years or more). Just 23 have leases in place.

The others have three year or ex­pired leases.

Con­sider the im­pli­ca­tions of this on the busi­ness of farm­ing.

A farmer is un­likely to in­vest their own funds into a piece of land on which they may not be liv­ing in four or five years. It takes at least three years to es­tab­lish an or­chard or a crop.

Banks and fi­nance in­sti­tu­tions will have pre­cious lit­tle time, let alone fund­ing, for a farmer who does not have se­cu­rity of ten­ure.

This leaves farm­ers re­liant on grant fund­ing, which is nei­ther ideal nor sus­tain­able.

Un­der this sce­nario, there is no hope for as­pir­ing and emerg­ing farm­ers.

If the gov­ern­ment is se­ri­ous about real land re­form, they can start right away by giv­ing the land which they al­ready own to the ben­e­fi­cia­ries which are cur­rently farm­ing on it.

This would be a first step in solv­ing our com­plex land re­form challenge.

Our next step should be to con­duct an ur­gent and ex­ten­sive re­view of land own­er­ship in the coun­try, which to date does not ex­ist, as rec­om­mended in the re­port.

Based on this, large tracts of fal­low gov­ern­ment-owned land can be turned over to emerg­ing farm­ers. Mr Pres­i­dent, you don’t need to change the con­sti­tu­tion to make state land avail­able to peo­ple who want land and hous­ing.

You said this week in Par­lia­ment that the state will rapidly re­lease its own land for re­form. You can start im­me­di­ately: start with the PLAS farms you al­ready own and the vast tracts of mil­i­tary and Transnet land at Yster­plaat, Youngs­field, Wing­field, Culem­borg and Denel in the Cape.

The Western Cape has been ask­ing for this to be done for over a decade, with no re­sponse from na­tional gov­ern­ment. But you can start to­day.

The re­port also rec­om­mends a multi-stake­holder ap­proach. Re­search shows that in many global ex­am­ples of land re­form, it is clear that “gov­ern­ment as an in­sti­tu­tion is not ef­fi­cient enough to im­ple­ment and man­age land re­form on its own nor to in­cen­tivise and man­age food pro­duc­tion and dis­tri­bu­tion.”

For agri­cul­ture to thrive, to trans­form and to en­sure that the food se­cu­rity needs of the coun­try are met, it is im­per­a­tive that ev­ery­one plays a role.

By fol­low­ing these steps, we can im­me­di­ately stem the tide of job losses and the de­cline in in­vest­ment in this sec­tor and put agri­cul­ture on the path to again in­crease its con­tri­bu­tion to our econ­omy.

Winde is pro­vin­cial MEC for eco­nomic op­por­tu­ni­ties.


Grower Brian Jof­fin walks on farm land in Philippi. The au­thor ar­gues that the large tracts of state-owned land ly­ing fal­low can be turned over to emerg­ing farm­ers, and the pres­i­dent doesn’t need to change the Con­sti­tu­tion to make this avail­able to peo­ple cry­ing out for land and hous­ing.

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