Not for the poor: in farming nothing comes for free

Roelof Bezuidenhout, regular Farmer’s Weekly journalist and farmer in Steytlerville in the Eastern Cape, proposes that the success of land reform will depend on solving farmers’ cash flow woes.
Issue date 24 August 2007

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One of the most grossly neglected issues in land reform debates is the cost of farming: how much money farmers must have available on a monthly basis, irrespective of loan repayments, just to cover the costs of running their businesses from day to day. E ven in the Karoo, which is supposed to be a low-input farming region, it costs twice as much to operate a farm than the average land affairs official earns in a year. Intensive farming systems swallow up even more. Wherever you are, a quick visit to the co-op for a few odds and ends seldom amounts to less than R1 000. Add to that regular maintenance expenses for your stock watering system, fencing, fuel, electricity, transport (at R7/km), vehicles and machinery, labour, stock remedies, and predator control, to name just a few, and it becomes clear why so many farmers fold as a result of droughts, price slumps or interest rate hikes. More than anything else, it’s the cost-price squeeze factor that has and will continue to put the smaller, less efficient commercial farmers out of business. T hose derelict farms shown on TV don’t necessarily come about because farmers don’t know how to work the land. More likely, they’re the result of a lack of the ready cash needed to produce goods for the market at a profit, while covering the family’s living expenses. If your farm needs a new pump today you must have the money at hand to buy and install it right away. If you can’t buy your tractor a new tyre you’ll soon be looking for a job in town. S o many young white farmers who’ve had the benefit of growing up on commercial farms, followed by the best agricultural training available, have failed as farmers.

This proves know-how isn’t everything. Mentorship programmes and crash courses in animal husbandry or cropping will certainly help emerging farmers, but they won’t solve their cash flow problems. M aking the situation even more difficult, getting ahead in farming demands not only the maintenance of infrastructure but also continual improvements and expansion. Need more water for your livestock? Drilling a shallow well, erecting a second-hand windpump, and laying on the water will easily set you back R50 000. Want to build a new fence? Be ready for R15 000/km. hat’s why moneyed city professionals often make the “best” farmers. They can buy up run-down properties, develop them, buy in the best genetic material, pay for sound advice, and offer the best wages. In effect, they import capital – a very scarce commodity in the platteland. But, as a retired stockbroker turned farmer once said, “Farming can change even a rich man into a pauper.” Indeed, spending money on a farm is sometimes like investing your last dollar on a wallet to put it in. You don’t always get a return. Adjust land reform policies Plainly, displacing established commercial operators and trying to settle thousands of emerging farmers in the vacuum is asking for serious trouble – perhaps more trouble than the skewed landownership scenario itself has caused up to now. Given the nature of agricultural economics, most of those new farmers won’t survive without huge and permanent government subsidies, paid out promptly every month.

No wonder beneficiaries see hiring out their newly acquired land to the previous owner as an attractive, risk-free proposition. Of course, this turns the land reform effort into a question of land ownership exclusively, with little pretence at establishing a new generation of viable commercial farmers. Subsistence farmers number among the poorest, most helpless people on the globe and no country would want to create more of these. If we genuinely want new farmers the first step should be to stop handling land reform as a sociopolitical experiment and get back to the basics. Good farmers are those who can earn enough out of their property to maintain a reasonable standard of living, without overexploiting the natural resources. Anything else will be unsustainable. Another truth is that “born” farmers are individualists. The best of them will always try to break away to farm on their own. They don’t want to be held back by loafers or passengers. o, calculate how many farmers the country’s natural resources can realistically support, be more careful about selecting candidates, and limit the number of beneficiaries per farm. Then keep the politicians and their advisers who don’t understand the practicalities of farming in South Africa out of the process.

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