Farming Faces Unique Challenges

The dawn of democracy in South Africa brought significant changes to the agricultural sector. The marketing boards abolished in 1998 brought an open market system, eliminating limits on land ownership and paving the way for greater inclusion in the agricultural sector.

While transformation in agriculture has lagged in progress, the demographics of agriculture are far more inclusive than what is popularly portrayed by the government in its arguments in favour of land expropriation without compensation.  

The Agricultural Business Chamber’s chief economist, Wandile Sihlobo, points out that while Statistics SA does not have comprehensive data on farmers, accurate figures can be assembled when taking the population census into account as well. “There are 242 221 commercial farming households in South Africa, of which only 18 per cent are white commercial farmers. If we consider only the agricultural households with agriculture as their main source of income surveyed in the 2016 Community Survey, we end up with 132 700 households of which 70 per cent are black farmers.”

The figures show that commercial farming in South Africa consists mainly of small-scale family-based operations, with almost 90 per cent of all VAT-registered commercial farming businesses classified as micro- or small-scale enterprises – earning less than R2.5-million annually. These farmers are responsible for only 23 per cent of total farm income but 37 per cent of all farm employment. Large-scale enterprises with more than R22.5-million turnover per annum, however, take up 67 per cent of total farming income and employ more than half the labour force, while taking up only 6.6 per cent of farming units.

Sihlobo states that generalisations of the South African farming landscape should be avoided since the statistics show that not all white commercial farm operations are “large-scale” and not all black farmers are “small-scale”, “subsistence” or “emerging”.

While the agricultural sector is changing and has grown to include a substantial number of black farmers, the increasing global tendency towards fewer, larger farms has raised concerns. Economies of scale make it easier for farmers to overcome production challenges, hence the global movement, but South Africa also faces unique challenges that prevent smaller farms from succeeding.

Lack of government support 

Prof Johann Kirsten, director of the Bureau for Economic Research at Stellenbosch University, says the lack of government support, rampant crime, excessive logistic costs due to poor roads, electricity shortages and underfunded research and development means that farmers have to undertake and fund multiple tasks themselves. Tasks that would usually be provided by the government. 

“The only way they can fund these ‘support services’ is to grow the business to the point where the additional costs can be carried and justified. The failure of the state has led to a situation where small- and medium-scale farmers struggle to survive.” All farmers face production challenges, but small-scale farmers especially are hard hit. Malapane Thamaga, agricultural economist at the African Farmers Association of South Africa (AFASA), explains that while small commercial farmers have the passion and commitment to keep producing, getting the produce to the market and earning a competitive income for it is one of the biggest challenges.

“It serves no purpose if produce is produced and packaged, but can’t get to a marketing platform. In addition, if transport must be sourced, it comes at great cost and is one of the biggest challenges facing small commercial farmers.”

He adds that without reliable transport continuously delivering produce as it is harvested is not possible. This hinders farmers from establishing trust with buyers and building a trusted brand.

“This is where we need the government’s support to ensure that farmers can get their produce to consumers. If we can get this right, we will be one step closer to a more inclusive agricultural sector, motivate small commercial farmers to stay in the game and ensure greater food security and rural employment. In the long run, this is what will grow our economy. Achieving food security is only possible if true inclusivity is established. We are a long way from this point. The current norm is no longer good enough and we must all push hard to change our environment for the better.”