Odds stacked against smallholder farmers to reach goals set by government

 

Various plans envisage a greater number of farmers, but the trend under pressure of neoliberal policies is the opposite

08 November 2018 – 16:38 Margareet Visser

Plans outlined in key government documents to simultaneously establish a new cohort of smallholder farmers, drastically increase farming jobs and improve their quality, and also guarantee food security for all South Africans, raise serious questions about implementation and potentially contradictory outcomes.

This was the conclusion reached by Dr Scott Drimie, Dr Stephen Greenberg and I in a series of papers commissioned by the Centre of Excellence in Food Security, hosted by the University of the Western Cape.

Drimie’s paper drew on key policy documents, including the National Development Plan (NDP); new growth path; the medium-term strategic framework; the agriculture, forestry and fisheries department’s agricultural policy action plan; and the national policy on food and nutrition security. These policies outline the government’s goals of speeding up land reform by establishing many more smallholder farmers; creating more rural jobs; and ensuring food security, primarily by allowing smallholders to create their own livelihoods.

Apart from job losses, the quality of agricultural jobs is deteriorating

When it comes to land reform the National Growth Plan (NGP) sets targets to increase the smallholder agricultural sector by 300,000 households (almost double the current number). Regarding agricultural employment, the NDP aims at 1-million new jobs in agriculture by 2030. The NGP revises this goal by targeting an additional 145,000 jobs in agroprocessing as well as better working conditions for 660,000 farmworkers.

When it comes to food security, the NDP expresses the hope that smallholder farmers will be responsible for one third of SA’s food trade surplus. The national policy on food and nutrition security aims to increase food production and distribution and support of community-based and smallholder production.

However, all these policies are thin on the details of how their targets will be achieved, not to mention the potential contradictions among them. This raises the question: will smallholder farmers be able to help achieve these lofty goals? The odds seem stacked against them. While the government wants to execute land reform by establishing more smallholder farmers, the trend in the sector is one of farm consolidation, leading to fewer and bigger farms.

Ironically, many of the seeds for consolidation were planted during a previous round of policy changes, as Greenberg’s paper shows. When the government revised its policy on trade and agriculture around 1994, the food system changed dramatically: the extensive state support to white farmers was reduced sharply. Farmers now face their customers on their own, and the major customers of farmers who export are global corporations that wield their immense economic power at the expense of the farmers.

These changes included dismantling the statutory marketing boards, which led to the fragmentation of producer power in the market place. Amendments to the Co-operatives Act allowed for the removal of co-operative infrastructure from the control of farmers, and then for co-operatives to be corporatised and privatised.
Co-operation was something to be forgotten: to be replaced by the new motto: each farmer for himself.

This neoliberal philosophy has opened the door to expansion of corporate power in the SA food system, fuelled by consolidation in the processing and retail environment. The latter major phenomenon is — remarkably — scarcely considered in policy analysis and prescriptions, despite its very real impact. The combination of market liberalisation and downstream consolidation in processing and retailing has led to significant farm consolidation.

Apart from being in the pound seats when negotiating food prices, retailers also set strict standards regulating food quality and safety. These have and continue to exclude many developing country farmers, particularly smaller farmers, from markets. A steady stream of farmers is exiting agriculture and those remaining are buying up land coming onto the market to reap economies of scale so as to ease pressure on their profit margins.

Today there are about 20,000 fewer commercial farmers than in 1994. The majority of the 40,000 farmers who remain seem to be barely getting by: about 57% of farms have an annual gross income (as opposed to profit) of R500,000 or less, and only 7% have a gross income of R5m or more.

But the restructuring that has flowed from liberalisation has produced a handful of winners: 0.6% (237 farm units) accounted for a third of all farm income in 2007. So here is food for thought. If a third of SA’s established commercial farmers have exited the sector due to increasing competition since 1994, will the new cohort of black smallholder farmers fare any better, and if so, how? Can the existing 167,000 smallholder farmers bank on the support of the government in this cut-throat trading environment?

Does the government have enough money to provide adequate support for the new smallholder farmers? Or are we headed for a game of musical chairs, with another round of farmer insolvencies and even more land eventually ending up in the hands of a tiny minority?

Drimie’s paper suggests that this is the likely outcome: he notes that despite the government’s rhetorical commitment to smallholder agriculture in policy documents such as the NDP and NGP, the available evidence suggests that actual policies favour medium- or large-scale emerging black commercial farmers.

The corollary of farm consolidation is increasing job losses. Apart from job losses, the quality of agricultural jobs is deteriorating and far from decent, as a report commissioned by the Centre of Excellence in Food Security  highlights. Most farmworkers no longer have permanent work; many live off-farm and earn far less than a living wage. Many others have exited the sector entirely and are migrating to urban areas, putting further pressure on urban food security. How will a new cohort of smallholder farmers succeed in creating more jobs that have decent conditions if the structural pressures that dog the sector remain or even increase?

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Finally, Drimie notes that while SA’s official approach to food security focuses on promoting smallholders to improve rural livelihoods, it fails to acknowledge that SA is rapidly urbanising and that these urban poor need to be fed. Will smallholder farmers indeed be able to create one third of SA’s food surplus? And even if they can, who will be responsible for the remaining two thirds? This is not clear from the policy documents.

Together, these papers suggest that policymakers need to think through their plans more carefully, identifying the obstacles and contradictions in advance rather than waiting for the fall-out that could occur.

Visser is a researcher with the University of Cape Town’s labour and enterprise policy research group.

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