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The preamble and the background to AgriBEE is far more complex and has a historical reference that is long and painful.
Although we think of it in the democratic context and as a document that found expression only post-1994 through the Constitution’s desire to redress the inequalities of the past, the truth is that the objectives stem from a brutal past, from the bad verbal deals of the black sharecropper and white landlords and even further to the Cape Colony. There is a historical mission that we ought to complete.
Fortunately, or unfortunately, that task lands itself in the form of the AgriBEE codes.
The land question is at the centre of a political crossroad that we find ourselves at as a country. We carry the hopes and dreams of the men and women who worked the land before us many moons ago. The silenced voices of our successful and highly skilled ancestors who, through a stroke of a pen, had their fortune turned and propelled into a cycle of poverty with which we are still dealing. Centuries later we must honestly reflect on the fact that we are the ones holding the pen right now, as business, commodity groups, government, non-governmental organisations and unions.
While the popular narrative would have you believe that a working relationship between black and white farmers is like oil and water, the historical fact is that there was a symbiotic relationship between black sharecroppers, such as Kas Maine, and white landlords.
Essentially, AgriBEE is about a working relationship between blacks and whites to equally share in the agribusiness spoils. It has been done before and we can most certainly do it again. To achieve that, we are going to need honest and ethical leadership.
How have we fared? What has been the progress? What are the key AgriBEE milestones?
It has taken us more than 14 years. That’s about the time it would take for a child to go from Grade 0 to matric and to do his or her final year of a three-year bachelor’s degree at university. This cannot possibly be right. Unfortunately, when it comes to implementation of the raging land debate we do not have the luxury of time. Agribusiness remains the least transformed industry in the country.
A quick glimpse of the agriculture boards’ composition would have you believe that there are no black people in South Africa. There is virtually no black representation in the boardrooms.
This task to review and charter a new way forward requires honest and ethical leadership. We must be brutally honest with ourselves.
What percentage of produce traded at the Johannesburg or Tshwane Fresh Produce Market comes from black suppliers? How do we expect a tomato smallholder farmer in Mooketsi, Limpopo, to send their produce and compete at the market with the biggest tomato producers?
The government spends more than R8bn on school-feeding schemes, providing meals to 9.2 million pupils in 19 800 schools. The number increases significantly when you add all the government spending on the army, hospitals and prisons. Who supplies government? Why don’t we have provisions set aside to procure much of our produce from black entrepreneurs, producers and companies?
Everywhere you go there is a retail store popping up in the villages, townships and next to taxi ranks all over the country. What percentage of agricultural produce comes from black suppliers? Who are the biggest customers of those retailers? Ours cannot be a role that is relegated to being only consumers.
History has taught us that first you have the agrarian revolution before you can even speak about the fourth industrial revolution. You need the raw inputs before you build the processing facility or factory.
What is the state of primary production by black farmers compared with their white counterparts? Even if we build a tomato paste factory in Coega, will it have enough tomato supply? Or will it shut down because of lack of feed stock to keep the factory running at full capacity? Is the government extension functional? What is the ratio of farmer to extension officer in government compared with the private sector? Have they kept up with new technologically advanced cultivation practices? Why is it that virtually all commercial farmers use hybrids and genetically modified organisms while most black farmers are stuck with old, open-pollinated, low-yielding and disease-susceptible varieties?
The government’s agricultural procurement system is defunct, particularly with regard to seed, which is the foundation of production.
The procurement is highly technical and specific to have the normal system of procurement. We, for example, supply our farmers with the cheapest seed from the bidder, ignoring that open-pollinated seeds result in lower yields and are more susceptible to disease. We ignore the fact that specific cultivars are bred for specific areas for a specific time. It doesn’t make sense to appoint a service provider with the cheapest winter cabbage seeds when you plan to sow in summer.
We should acknowledge that agriculture has a small specific window period to apply fertiliser, to lime, to spray for pests and diseases. Therefore, it doesn’t help to deliver the fertiliser bags late into the growing season after having followed all the Public Finance Management Act processes.
Agriculture is said to be at the top of the agenda for the country, but our budget allocation suggests otherwise. Institutions such as the Agricultural Research Council and the National Agricultural Marketing Council need to play a more critical role in increasing the yield of farmers per hectare by providing technical advice and the necessary research and access to markets. Instead, the budget is cut yearly. What role can the entities that receive statutory levies play? What percentage of that allocation is spent on improving black farmers?
Can the Hortgro, SA Grain Information Service, Meat Industry Trust, Mohair Trust, National Lucerne Trust, Wool Trust, Maize Trust, Oil and Protein Seeds Development Trust, Sorghum Trust, Winter Cereal Trust, Citrus Industry Trust, Deciduous Fruit Industry Development Trust, Potato Industry Development Trust and SA Wine Industry Trust play a more central role in the developmental agenda of the black farmer?
The Land Bank historically administered preferential loans to commercial white farmers, but in the new dispensation it operates as a commercial bank. We need to reform the financial instruments of the bank to once again be of use to the marginalised farmers and agripreneurs. We need a new financing model better suited for smallholder farmers and entrepreneurs.
A few years ago, the agriculture, fishery and forestry department had an AgriBEE fund that it failed to spend. In fact, R229m was returned to Treasury in one of the financial years. The fund was partly a grant that was meant to facilitate the entry of black business into mainstream agriculture, mainly through equity transactions. We need something similar to complement the gazetted AgriBEE codes. How else do we expect to finance black entrepreneurs, famers and companies to equity partners and full ownership of the various value chains? We need the fund to have realistic requirements taken into account, particularly the marginalised youth and women.
South Africa is classified as a semi-arid country. Water rights allocation remains one of the biggest challenges for black farmers. It cannot be that you have a stream that passes through black farmers who can’t use the water, while the white commercial farmer down the valley has all the water rights. We need to give attention to water rights allocation.
In the 1970s, Steve Biko wrote: “The blacks are tired of standing at the touchlines to witness a game that they should be playing. They want to do things for themselves and all by themselves.”
There is no time to dilly-dally around AgriBEE. This sector is inextricably linked to the question of land. We cannot afford to drag our feet.
The BEE commission needs to look at the lack of transformation in this industry with magnifying glasses.
We are aware of deals that were set up in bad faith with some farmers and companies, creating employee trusts without any board representation, diverting and avoiding dividend payouts.
The AgriBEE codes could have been more forthcoming when it came to equity and procurement. Given the significance of the industry to rural development, the two elements should have carried more weight.
How can we expedite our historical mission? How do we finally bring justice and honour to the men and women sharecroppers represented by the likes of Maine? How do we honour their memory?
The past 24 years have clearly demonstrated that the industry is almost incapable of transforming on its own. It is our duty to assist the agricultural sector with transformation.
We must not forget our historical mission. We dare not flinch…
- Zungu is president of the Black Business Council
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