By Sifiso Ntombela
In 2023, a prodigy and futuristic Wandile Sihlobo published his second book titled, “A Country of Two Agricultures”, where he asserts that South Africa has not been successful in closing the productivity and inequality gap between white and black farmers.
His book affirms that these disparities are a consequence of the historic laws that privileged white farmers, and instigated land dispossession and livestock plunder of black people. The notion of “two agricultures” which refers to a duality problem was first raised by Merle Lipton in 1976 in the context of differences in productivity between then well-supported white farmers and poor black farmers.
In his book, Sihlobo provides a series of practical and well-thought-out solutions that can help address the duality problem. Amongst these thought-provoking measures, is a paradigm shift in thinking and quantifying the progress on land reform as well as commercialisation of black farmers.
Essentially, Sihlobo argues that there are more positives on land reform that are not accounted for, thus painting an unnecessary failure of the government. He further states that the limited public resources could have more impact if channelled to few but better black farmers. In this article, I attempt to evaluate the plausibility of these two concepts.
Land Reform democratic dividend
Sihlobo together with Johann Kirsten, a director of the Bureau of Economic Research (BER) and a professor of agricultural economics at Stellenbosch University, posits that the government is selling itself short on the land reform successes.
According to the Department of Agriculture, Land Reform, and Rural Development, almost 10 million hectares have been acquired by the state through the three pillars of the land reform program, namely, restitution, tenure security, and redistribution.
Under the restitution, an additional R22.5 billion has been spent on financial compensation for those beneficiaries who elected for the money instead of land between 2019 and 2023. This equates to roughly 10% of the farmland transferred since the dawn of democracy in 1994, which falls short of the 30% target.
Wandile and Johann explain that when you translate the financial compensation into land, an additional 2.6 million has been acquired. In addition, the policy framework on land since 1994 has enabled black people to acquire about 1.9 million hectares through private means. So, the holistic number of transferred land is 24.7% when one considers both government and non-government-acquired farmland. I call their concept a democratic dividend on land.
Although they used guestimates, however, the democratic dividend narrative is sound and needs to be explored further. It is premised on accounting for policy changes that have deracialised the land market and recording the progress made by the government to restore the dignity of black people and help them accumulate assets in the form of land, in particular women and youth. The concept of democratic dividend recognises that more can still be done, however, significant strides in redressing land hunger and inequality have been made to date.
Effectively, the concept of a democratic land dividend implies that the government must review its land audit of 2017 to include non-government land acquisitions. It further implies that the land administration in its current form requires a significant review and improvement.
Commercialising few but better
South African agriculture has undergone a rigorous consolidation process underpinned by market deregulation and trade liberalisation in the past three decades.
Consolidation is the process where innovative and competitive farmers gain a market edge and outpace smaller, less-resourced, and uncompetitive farmers. As a result, the number of farmers reduces while the size of farm units increases as competitive farmers gain economies of scale. The advantages of this phenomenon are that as farmers gain economies of scale, they also attain efficiency, and can participate in the export markets, which helps them and the country to generate foreign earnings and attract modern technologies.
The blind spot of this concept is that it assumes there is only one agriculture, but in reality, South Africa has two agricultures, as outlined in Sihlobo’s book. Secondly, this concept assumes black people are interested in being farm employees and do not necessarily want or know how to farm. Thirdly, the few, but better concepts are likely to deepen inequality not only between white and black farmers but also among black farmers.
Lastly, it will compound the food insecurity problem because it promotes profit maximisation and foreign earnings and less food security. The country exports more than half of its production yet food affordability is becoming a major problem.
The concept of few, but better farmers needs to be reviewed because South Africa needs both small and large-scale farmers to ensure we promote foreign earnings and efficiency gains on one hand while we also encourage food affordability and job creation on the other hand.
Sifiso Ntombela (PhD) is an agricultural economist. He serves as the Special Advisor to Minister Thoko Didiza, in the Department of Agriculture, Land Reform and Rural Development. He is also an elected President of the Agricultural Economics Association of Southern Africa.