ANALYSIS: How to make small-scale farms work
The contribution small-scale farms make to the agriculture sector and their ability to survive in the current market was the topic of discussion on Day 2 of the Nation in Conversation series at the Nampo Harvest Day in Bothaville.
Is the government providing small farmers with enough support? What can the sector do as a whole to empower them? Should these farmers be worried about the direction government policy is steering?
Here's what the experts had to say.
Are small-scale farmers currently being set up to fail without enough support from the government and the industry?
"We have to talk about politics," says Dan Kriek, CEO of AgriSA. "And we must acknowledge that, for over a century, we had one sector of family and commercial farmers, mostly white, who were allowed to develop to where they are now. Then there's a second group of small-scale farmers that, because of our history, are mainly black.
"People say small-scale farms are not economically viable. But we don't have the luxury to say that. It's a political imperative that they do become part of the value chain.
"But we are going the wrong way to create the enabling environment to do this. We are watering down property rights. We should be going in the exact opposite way and afford farmers property rights and then the financial benefits of that will follow.
Kriek says the sector also needs government to trust them to guide the process.
"To be brutally honest, we do not have the civil servants in the government departments to pull this off. I see a far greater role for agri-businesses and AgriSA to play and for partnerships between government and business."
How do we get small scale farmers access to the market?
"Access to the markets is a big issue," says Dr John Purchase, CEO of Agbiz. "That's what Mexico and those guys are doing right – to pull the small guys into the market – and where we're struggling.
"Let's take the milk industry. Big milk buyers in South Africa are not interested in collecting 50l of milk from 100 different producers. If we want to get our small-scale farmers access to the market, it means they will have to aggregate their product. Our policy will have to support it.
"We need to work with government so that we can access the markets in Europe and the Far East. If we don't create a bigger market to pull the smaller guys in, the pie is just going to get smaller. I think government hasn't worked closely enough with the private sector to enable us to do this. There's an opportunity now to do that."
If the market in the form of retailers isn't willing to support small farmers, how can the industry support them?
Pitso Sekhoto, owner of Makolobane Farming Enterprises in Senekal, says the industry will have to stand together on this.
"Somewhere along the line we need to stand up as an industry and say this is how you're going to go. Currently, we are price takers in a system and taking whatever the market is prepared to give us. We are in BRICS, what are we learning from them? We just had a budget vote in Parliament but we, as the agriculture sector, are not part of it. They should be sitting here with us and planning."
Should farmers be worried about the direction the industry is going?
"We have a world-class agriculture sector but there's a dualism and we need to deal with it. We also export more than we import. The problem with that is the whole value chain is built on big family or commercial farms. The small and medium guys are the ones that are despondent and uncertain," says Kriek.
"Ever since 1994, we've been competing with other priorities like health and education. The budget is probably going to be cut again. For land reform, it was cut from 2008/09. How do we spend it? Who do we trust to spend it? What are we doing about post-settlement support? How do we take care of our small-scale farmers?"
What role does government have to play in supporting small farmers?
"Agriculture goes across so many departments, but there's no coherent plan that goes across all that," says agriculture economist, Professor Johan Willemse.
"We don't have a real champion in the department of agriculture that cuts across all departments and overrides other legislation. The way government is structured now, agriculture is on the losing end because the different departments work in silos.
"I think the institutional structures of organised agriculture are very strong. The linkages we have between different parts of the sector put us in a much better position than government. We have done all we can do. The structures are ready to take it forward. We need our government to participate and move forward with us."