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
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.