At the recent Agribusiness Trends Dialogue Teddy Matsetela, chairperson of the Farmers Development Trust, told delegates that 80% of black producers in South Africa are subsistence farmers, 19% are emerging farmers and a mere 1% commercial. The disturbing question is: what is keeping our black subsistence and emerging farmers from going commercial? Wilma den Hartigh reports.
One of the biggest problems crippling emerging South African farmers is ineffective agricultural extension services, according to Teddy chairperson of the Farmers Development Trust. “Although the legislative framework for sector transformation is in place, we contend that this framework has failed to transform the sector with the existing support systems.” M atsetela said the absence of effective extension services affects more than just on-farm production – it also prevents the emerging farmer from becoming active in the commercial farming sector. B ecause new farmers in settlement areas find it difficult to start or even maintain production operations, they are reluctant to further invest the little cash they have where possibilities for expansion exist. “We need capacity building at production level. Extension officers shouldn’t be sitting in offices. They have to work on the ground.”
Land reform beneficiaries often fail to move beyond subsistence farming, said Matsetela, leaving large areas of high-potential land underutilised. He said the need for institutional capacity support could not be overemphasised. “It is one thing to have a piece of land, but another to make good use of it for agricultural production.” Creating support for small-scale farmers I t is difficult enough to obtain land as it is so expensive. But if a farmer does manage to get hold of land, developing it is out of the question as most of the funds have been used for land acquisition.
Emerging farmers must move into commercial production, believes Matsetela, but for this to become a reality a database identifying the entire emerging farmer constituency is needed. This database should contain information about what farmers do, what services they have access to and the support available to them. At present the agriculture department does not have such a database. F urthermore, in South Africa farms are run as businesses and consequently need business support. Coupled with this, Matsetela suggested that research and development should focus more on the emerging farmer.
Hamish McBain, a consultant for Tiger Brands, said government had shown commitment to increase its spending on agricultural research, but agreed that more could be done with extension support. “If [government] worked more closely with bodies such as Grain SA and Agri SA and combined their resources, the extension service could be phenomenally better.” Lindie Botha, an agricultural economist at the Agricultural Business Chamber, said improving the infrastructure would benefit both the emerging and commercial sectors. Agribusiness: the way to economic growth Jeff Velelo, GM of business development at the Mpumalanga Agricultural Development Corporation, said a turnaround strategy is needed for all population groups to become involved in the production of the country’s food and fibre. All participants should share both the risks and rewards of producing, processing, distributing and marketing products and services throughout the value chain. Velelo said lessons learned in Mpumalanga have made it clear that for the province to contribute to South Africa’s economic growth, the emphasis should be on agribusiness development.
Value-adding in the agricultural sector needs more attention, according to Velelo. “Efforts should be directed not only at primary production but right through the value chain,” he said, adding that in comparison with international agriculture, Africa is generally more focused on the primary production of commodities. “Provinces in South Africa are exporting their produce to other countries, value adding is done there and sold back to us,” he explained. If more value is added to produce closer to the farm gate, the producer will have higher returns. Collaborative effort needed Farmers, government and the private sector must join hands to make agribusiness opportunities a reality. Although government must create an enabling environment for the private sector, it is not solely its responsibility to improve the situation. Finally, to promote stability, growth and transformation in the agricultural and agribusiness sector, said Matsetela, clear-cut policies must be put in place. These policies must focus on farmer settlement, food security, rural development, the development of cooperatives and agricultural risk and disaster management. |fw
Mounting the emerging agribusiness horse
Jeff Velelo compares agribusiness development to horse racing:
Step 1: Develop the “jockey” – the farmer or entrepreneur – through training and capacity building. Training farmers in business acumen ensures competency.
Step 2: Choose the right horse. “Identify which enterprises will create economic growth in a particular area,” he says. For this purpose anchor projects have been developed in Mpumalanga.
Step 3: Attend to the race course – the soil, and infrastructure such as roads and logistical requirements.
