By Michael Schmidt

The grey drizzle hung over the small Free State town like a pall of despair.

Jagersfontein was the second town in South Africa to be electrified and was once hailed as the boondocks where the 637-carat Jubilee diamond in Queen Elizabeth's crown was mined.

Now it is the place where the dreams of poor white people go to die.

The spectre of rural white poverty once drove Afrikaners to form a range of social, financial and industrial institutions to uplift their people, a sort of Afrikaner affirmative action.

Now a combination of black affirmative action and white entrepreneurial laziness has contributed to the reappearance of poor whites on the political landscape.

It's a novelty that has attracted the attention of President Thabo Mbeki, who said last month that the government would have to examine whether its policies were causing white impoverishment.

At Jagersfontein, a corrugated iron-roofed town in the far western Free State, the shrinking white population bears the scars of an earlier de-industrialising phase when, more than 30 years ago, the once-lucrative De Beers diamond mine shut down.

The few white people who remained eke out a living any way they can.

Marthinus van Vuuren, 75, has run his general dealership at the entrance to the town for 19 years, but he also supports his wife and sons on the interest of a small investment he made years ago.

"The blacks now pay cash, but the whites need credit," he said. "But I stopped extending credit because too many people just can't pay the instalments, while others try to sell the goods and run off to Joburg. I'm owed about R120 000."

His son, Marthinus junior, described the store as "a white elephant", saying that the town had once been well-maintained and people ate well, but now they were reduced to eating "tinned sardines, Fray Bentos and bully beef".

Father and son expressed disdain at the "ex-maid who is now a councillor and drives a BMW" - an example, they felt, of the misuse of developmental funds. But they acknowledged that poverty affected all residents, black and white.

Mayor Sello Ntaitsane, the executive of the Kopanong local municipality which embraces nine small towns, said Jagersfontein was "a good example of an integrated community", but said he was concerned at the constant loss of young white people to the bright lights of Bloemfontein.

Adruska Marais, 19, dreams of training to be an ambulance driver, but the Jagersfontein teenager has found his desires reduced to dust by poverty.

After doing piece-work on dismantling the old De Beers plant a year ago, a self-starter project of his - making lamps and clocks out of dried cactus and garingboom - failed because locals were too poor to afford the R150 price tag.

Today, not able to land the town's sought-after R750-a-month bottlestore job, Marais gets by doing odd jobs where he can get them.

"Jagersfontein is going to become a ghost town. The only place to relax is Diamonds, a restaurant and bar, but they harass you if you just want to sit there and you can't afford a beer."

Today, the pool stands empty and desolate, as do the tennis courts.

The manicured bowling green next to the courts show that Jagersfontein has become a town of pensioners.

Louis Olckers, 50, worked for 26 years on road crews that built most of the roads in the district, but was then laid off. He washed up in Jagersfontein because the rent on the houses, mostly owned by white people who managed to escape to Bloemfontein, is cheap at around R300 a month.

"I earn a bit driving people to the pension office, or to Bloemfontein to buy groceries. Why don't they start a road upgrade project here?" Olckers said. "Look at all the potholes."

The difference in the financial status of the white versus the black and coloured communities in Jagersfontein is illuminated by the sepulchral St Joseph's Catholic Church with its famous stained-glass windows, which has been boarded up for the past two decades. A brand-new Catholic church in the "township" of Itumelong is thriving.

As with all dying towns, the one person that invariably does well is the undertaker.

Christo Hendrikz, 29, did a stint in the local market before going to work in the family's funeral business.

He promises residents a satin-lined wooden coffin, corpse storage and dressing and a full burial service for R4 350, affordable to even Jagersfontein's white paupers on a R22-a-month plan.

"The one's death is the other one's bread," he said, quoting a Hendrikz family graveside truism.

Mayor Ntaitsane has met with De Beers in an effort to convince the diamond giant to remine the tailings dump at Jagersfontein.

De Beers has expressed interest in the proposal and its tests show the dumps are viable - a few years ago, a gardener found a thumb-sized gem near the mine - but infrastructural problems remain.

A steelworks project earmarked for Jagersfontein failed to get off the ground because the electricity supply was unreliable, so the investor simply moved the project to Botshabelo, east of Bloemfontein.

Jan de Wet, the chairperson of a new pilot project formed to deal with the problem, said: "Affirmative action has cost people a lot of posts. But a lot of white people were a bit spoilt under the previous dispensation. Our entrepreneurial skills have been lost and to start up again in order to be self-sustaining is very difficult."

Even if Jagersfontein is restored to its former glory as a diamond-mining centre, it is likely that the sons of the former white supervisors who once oversaw the flow of its wealth will in future be part of the workforce that physically wrestles its gems from the ground.