How has South African agriculture fared since the advent of democracy in 1994?
One should be careful to talk about agriculture since 1994 in general terms. The industry is very different from 20 years ago. It is certainly more commercialised with fewer producers, farming on a much larger scale. South Africa is now also very competitive in many international markets. Democracy has opened up the international economy to South Africans and the agricultural industry has responded well. However, democracy did not bring about the policy certainty and investor confidence, which could lead to increased productivity in the sector, thereby enabling it to become internationally competitive.
We will have to invest a lot more in mechanisation as well as research and training. Agriculture has made hay from the rand’s depreciation during the past 20 years, and the relatively favourable weather conditions in much of the country up to 2008, helped to keep the industry afloat. However, we are certainly not in the league of our competitors in South America or even New Zealand, in terms of managing our international market share.
But, agriculture policies in those countries may also be significantly more predictable, if not more favourable, than ours. In this country, the relationship between state departments and agriculture is still too strained for us to take full advantage of our capacities.
What was the biggest mistake the commercial agricultural sector made since 1994?
Firstly, the government has been allowed to take the initiative with land reform, with organised agriculture mostly reacting defensively to government policy. But, neither the state nor commercial agriculture have an inventory of what they are arguing about. It is in the interest of the ruling party’s post-liberationist discourse, to use ideology rather than data, statistics, and good governance to re-engineer land ownership. The fact is that the state has been the sole beneficiary of land reform.
Land bought from white farmers, comes under the authority and control of the state, not the new black ‘owners’. Even the former homelands belong to the state. It is absolutely incredible that we still have no independently-researched land audit. Too often, the president or cabinet ministers argue in parliament that 87% of the land belongs to whites. Organised agriculture has no factual response to this ideologically-driven intent to stigmatise white land ownership. As a result, all municipal land as well as land already purchased by black South Africans become categorised as ‘white land’.
You previously said commercial farmers do not market their industry aggressively enough?
The point is that land owners must market themselves as food producers, rather than farmers. It will be easier for political managers to factor agriculture into financial equations if farmers are marketed as economic entities with diverse interests. This way, they will be regarded as representatives of a complex economic and business system.
Food producers should establish a plethora of complicated relationships with groups ranging from researchers and financial institutions, to the manufacturers of products and services (such as tractors or fertilisers), as well as their international trading partners. Such a large and complicated economic entity will be a forceful presence when policy is negotiated.
You’ve said whites in South Africa have transformed from a civil servant economy to the mainstay of the economy since 1994. What about agriculture?
Agriculture is primarily a business. The capital required to sustain the process of food production is massive and the risks complex. However, profit margins often do not allow for anything other than a perfect balance between a complex number of variables. It helps if producers are educated, experienced and professional. They have to know how to read a spreadsheet, be able to study trends in local and international markets, and also know how to negotiate their position in that market.
Due to the labour-intensive nature of agriculture, commercial farmers also need the necessary skills to manage human resources professionally, and in accordance with a very complex statutory regime. Despite certain shortcomings, food producers are much more professional, experienced and skilled than before 1994 and their businesses are managed accordingly.
Agriculture provides direct employment to more people than the mining industry, and the socio-political environment in agriculture is not nearly as unstable as that of the mines. Agriculture rely on the state to assist in negotiating international markets for the sector’s produce, but other than that farmers have to largely fend for themselves, and they have done so very well.
Private land ownership is the reason South African farmers have always re-invested heavily in their own industry, and we now pick the fruits of that investment. South African agriculture plays off a good wicket – if the industry can settle the moral question of land distribution with the state, the sector’s contribution to the economy can become a remarkable story.
Is there something wrong with commercial farmers’ collective mentality? Are they as prejudiced, intolerant, and narrow-minded as is sometimes claimed?
Although there certainly are individuals who display these attributes, sanity has prevailed with regard to the ‘collective mentality’, often under very strenuous conditions. Strong leadership is required to bind the varying, and often contending, interests of the industry together.
To achieve this objective, it makes sense to stay clear of the politics of ideology. In the post-liberationist discourse, it is often implied that farmers are ‘volkstaters’ who isolate their interests from the national agenda. This is a fallacy. Research indicates that most farmers want a government which governs well, regardless of the ‘colour’ of such a political system. Although white farmers could be labelled as conservative, it should be noted that the liberal-democratic constitution of South Africa allows for conservatism. Being conservative and being racist is not the same thing.
Does the industry suffer from polarisation?
I don’t think the industry is polarised in a general sense. I suspect the inability of organised agriculture to focus on issues which threaten the durability of their industry, is related to contending interpretations of the threats to the industry. Ineffective risk management, be it financial or political, will come at a cost that is too high to bear.
Labour should be an asset, not a risk; government should be a partner, not a competitor, and the fluctuations of markets and policy should be approached with rationality and from a well-informed power base. People underestimate the power of being reasonable and knowledgeable, instead of practising the politics of strong wills. In addition, the legal system, which has served civil society well up to now, should be used to resolve disputes with authorities.
What is the single most important mindset change the sector will have to make to survive the next 20 years?
The industry will have to manage its internal diversity better, specifically human resources. It will have to take the initiative in doing the ‘right thing’. Land reform, and a more just distribution of land ownership, is too important to be left to the government alone. It also makes socio-economic sense to get the ‘dead capital’ land of the former homelands into production. White farmers have to take up the cause of black, private-ownership with the same determination they fight for their own constitutional rights.
In addition, they have to take a measurable degree of responsibility for the socio-economic complexities of their human resources. Workers are not a commodity, they are as important as any other individual in the process of production. It not only makes moral sense to be concerned about the conditions faced by your labour force when they are not at work, but it also makes business sense.
The worst case scenario versus the best case scenario in 20 years’ time?
The worst case scenario must be the nationalisation of land and inability of commercial agriculture to reach the necessary consensus to take a proactive role in the land reform debate. We will destroy an industry which is at the forefront of a rapidly modernising economy.
Agriculture production in South Africa is cutting edge, and it is truly one of the sectors of our economy which has the organisational architecture to compete internationally. However, the absence of a credible land audit, which differentiates between the diverse agricultural capacities and the value of farms, will convolute the discourse, and as a result, advance the interests of those with destructive intent.
The best scenario is, of course, that the government focuses on the millions of hectares of land readily available on the market, for purposes of land transfer. The former homelands should be privatised and handed to the people who live on it. Through private ownership these people will then be able to access loans and receive assistance from the state to develop their land, or sell it and move to urban areas.
Much of the capital generated in this way could be invested in the informal economy to generate jobs. The same rule should apply to urban land owned by the state but occupied by black South Africans. This will address land ownership in a relatively short space of time, and also economically empower millions. This model is not only politically sensible; it also makes the most economic sense.
Email Dr Piet Croucamp at [email protected]
This article was originally published in the 12 July 2013 issue of Farmer’s Weekly.