A positive spin on agriculture

Kerneels Pietersen, president of Agri Eastern Cape, talks to Roelof Bezuidenhout about the organisation’s views on land reform and BEE, and his hopes for farming in the province.
Issue Date: 9 March 2007

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Kerneels Pietersen, president of Agri Eastern Cape, talks to Roelof Bezuidenhout about the organisation’s views on land reform and BEE, and his hopes for farming in the province.

You are upbeat about farming, despite the political rhetoric. Why?
 There’s a lot of goodwill between commercial farmers and the emerging sector. Agri EC and the provincial Department of Agriculture are starting to find one another, partly because the department has realised it needs our expertise. The recently formed East Cape Agricultural Forum – in which all role-players are represented and discuss matters ranging from stock theft to job creation – is coming into its own.
Farmers are increasingly showing support for and confidence in organised agriculture, even though we’ve increased our annual membership fees by 43%. And they are paying promptly, thereby ensuring that we run an effective organisation.

Will you be able to overcome the ideological obstacles?
I’m convinced that as long as we avoid meaningless political arguments and focus on economic realities we’ll continue to make progress.
Eventually, as always happens, economic forces will prevail and dictate markets and events.

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A re the land reform goals attainable?
The Eastern Cape already exceeds 30% of the agricultural land transformation set for 2014. Looking at potential rather than square hectares places the issue into true perspective. The fact is that, given the soils and rainfall of the eastern part of the province, black farmers actually control 30% of the province’s carrying capacity. Looking only at size, commercial farming consists of 6 700 units covering 11,5 million hectares. Communal and emerging farmland consists of 310 000 units, covering 5,6 million hectares. There’s no need to tamper with the “willing buyer, willing seller” concept as more than enough land is available for redistribution. There were nearly 23 500 land transactions in the province between 1996 and June last year. The province has more than 17 million hectares of agricultural land – currently available land should be divided and used to its full potential before exerting unnecessary pressure on white commercial farmers. Sadly, no scientific study has ever been done to support redistribution policies and actions.
Nobody knows how many new farmers can be effectively settled or what the eventual socio-economic outcome will be.

What are the main short-term problems?
Government statements still tend to deviate from the original Codesa agreements made in 1994. For example, at that time, the aim was to transfer 30% of agricultural land to blacks within five years. Nothing was said about redistributing white commercial farms. Land tax was supposed to be collected only from unutilised land (although the term remains undefined), with the revenues generated earmarked for land reform. In addition, the minister of agriculture does not appear to want to recognise farms as small businesses, nor that farming needs its own and not a generic score card and code of good practice (COGP). If the minister insists on R1,5 million turnover instead of R5 million as a cut-off point for exemption from compliance with the BEE charter, and proceeds to raise the ownership of black partners from 25% to 30%, we will use our substantial legal aid fund to challenge whether the minister is acting within the law.
We seriously warn farmers not to take uninformed decisions regarding BEE transactions – at least not before the final recommendations are published at the end of March.

What is your standpoint on BEE?
Agri Eastern Cape requested in its original proposal that before a mandate be given, final negotiations be held with stakeholders and that core recommendations, such as the provision for voluntary participation, be regarded as non-negotiable. We also demanded that a transformation charter for AgriBEE be negotiated according to Section 12, Act 53. We asked for a pilot implementation period of five years for teething problems to be addressed and to secure buy-in. Only thereafter should a COGP be developed for implementation, according to Section 9, Act 53. At the same time independent research should be done on the uniqueness of the agricultural sector. Case studies are needed to measure the successful practical implementation of AgriBEE.

Land affairs still seems to be giving trouble?
We need an integrated Department of Agriculture and Land Affairs at provincial level. On its own, the Department of Land Affairs remains an embarrassment to good governance. The claimants target high potential, well-developed farms for restitution but then fail to finalise the deals, inter alia Tsitsikamma and Queenstown. In the latter case land affairs officials have been dragging their feet for nine years.

How does the eastern region of the province compare with the western region?
The former homelands have huge potential and it would be possible to settle many thousands of new farmers there. Indeed the so-called “six-peg policy” promises to revitalise communal irrigation schemes, totalling more than 12 000ha, that should create almost 4 000 jobs at a cost of R650 million. Fortunately, it is being realised that 30% of South Africa’s water runs away along the Mzimvubu River and if harnessed could even feed the Olifants River in the Western Cape. It makes sense to invest most of the agricultural development budget in the former Transkei and Ciskei regions. But calling in Israeli advisors to help with these developments is wrong as we have the know-how and experience right here. We also have good mentorship programmes in place but we’ve decided not to help rescue ill-conceived farming projects. We’d prefer to be involved right from the start. In the commercial farming areas the focus for redistribution is in the Fish River, Sundays River and Gamtoos irrigation areas which have well-developed irrigation farms and which export 90% of their produce.

What else are you concerned about?
Other problems include the continued lack of a realistic disaster policy – which could turn out to be a very expensive blunder – and labour legislation that discourages job creation. Commercial farmers are under tremendous financial pressure and this forces them to employ fewer and not more workers. Ultimately this will result in increased mechanisation, as well as the growth of entrepreneur-driven farm labour services that specialise in anything from fence building, maintenance work, and livestock management to harvesting. We’ll need more training programmes to fill the gap in this unique market. Agriculture has not yet transformed to the same degree as other sectors such as mining and the financial sector but, being a “Cinderella”, that is to be expected. However, the changes have to be carefully watched and managed to ensure economic stability, increased productivity, and a safe and secure environment. We need good farming practices to secure our precious natural resources. Emerging farmers need good training and that includes education about issues such as minimum wages. We must oppose any move that could further erode the availability of productive land and so put even more pressure on commercial farming. For instance, we are closely monitoring a new trend in which developers are planning to spend huge amounts on upmarket “lifestyle” projects which sidestep environmental legislation and the laws on the subdivision of agricultural land. |fw