Ayanda Mdluli Rome
The agricultural sector in South Africa is in for an interesting shake-up this year. The government has set aside R4 billion to help develop smallholder farmers as it seeks to create more jobs in the sector, according to Langa Zita, the director-general of the Department of Agriculture, Forestry and Fisheries.
The department was rolling out a plan called Zero Hunger, which would play a central role in developing agriculture on smallholdings, he said. The programme is being run in partnership with the departments of Health, Education and Social Development. It aims to give preferential procurement status to smallholder farmers who are able to supply goods efficiently and sustainably.
“We are embarking on a comprehensive overhaul of the architecture of food production in the country,” Zita said.
Zita was adamant that by providing this lifeline to the farmers, the initiative would create 30 000 jobs.
In an exclusive interview at the 35th meeting of the governing council of the International Fund for Agricultural Development (Ifad) in Rome last week, Zita said more than R4bn was earmarked to help develop South Africa’s small scale farmers.
About $350 million of this amount, or R2.6bn, was provided by Ifad, a specialised UN agency, as a once-off loan to assist the country with its agrarian reform objectives.
Zita revealed that South Africa had a strong partnership with Ifad and since the country was part of the global community, it had to engage in global best practices to champion agricultural development.
Ifad believed that smallholder farmers “are the backbone of rural economies with major contributions to national food export markets”. This sector of agricultural production had massive growth potential if adequate investments in green technologies, energy, land, credit training and infrastructure were made.
The smallholder farming sector has been plagued with job losses and the country has battled to build sustainable farms in rural areas. The forestry sector alone has shed about 12 500 jobs since 2008.
The sector has been criticised for lacking black economic empowerment (BEE) and black emerging farmers complain about being at the tail end of lucrative markets.
An overall forecast by experts also reveals that the commercial farming sector has experienced a sharp decline since 1994. South Africa has 40 000 commercial farmers and this figure is expected to drop to 15 000 in the next 15 years.
In addition, consumers have suffered escalating food prices as commodities such as grain and chicken increased by between 20 percent and 100 percent last year.
It appears that the government has gone back to the drawing board to try and find specific solutions to these problems where the smallholder farmer is set to play a pivotal role in agricultural reform.
Ifad said it had more than 30 years’ experience in smallholder farming. It also served as a fund dedicated to providing funds to the farmers.
Zita said the government had found a way to unpack the relationship between agriculture and job creation. His department had realised that it needed to attract new players and help develop smaller players to satisfy the hunger for jobs and food security.
“We have seen that job creation in agriculture is in decline. Farmers are becoming few and it is no longer viable for farmers to have small farms. Also, the new generation has opted for life outside agriculture, which also brings in a social dimension. In some cases farms would be bought by neighbouring farmers when a farmer died.
“We have seen an increase in these consolidation farms. We have also seen an increase in the use of machinery, while other farmers do not have access to resources to… complete the capital-intensive route,” he said.
While mainstream commercial agriculture was capital-intensive and often put the smaller guy out of business, Zita pointed out that it was important not to marginalise commercial agriculture as bigger players in the industry could be used for foreign exchange and investment.
“We need to ask what is discouraging labour absorption. Are they battling because they can’t pay input costs? We need to engage with them and if we look at jobs in the industry, we need to protect the smallholder farmer as well. Agriculture is seriously untapped for job creation in the country,” he says.
To add to the tally of what one might expect in the sector, Zita said a new agri-BEE charter would be gazetted later this year. At least 10 percent of production and commodities in agriculture must be reserved for smallholder farmers. This would result in major retailers in the value chain implementing a compliance scorecard and the development of a system to monitor agri-BEE progress.