Small-scale farmers can contribute to food security

Some commentators might believe otherwise, but SA’s policymakers need to focus on small-scale farming. It’s pivotal to the sustainability of the country’s economy, says Nico Groenewald, Standard Bank’s head of agribusiness.

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Governments the world over are coming to realise the important role that small farms can play in modern economies.
Strange as it may seem, given the dominance of large-scale and corporate farming businesses over the past several decades, the mainstream agricultural supply chains and conglomerates still cannot provide and distribute enough food for the world on their own. Neither can they create the jobs needed in emerging economies such as ours.

Big businesses run extremely lean because they can afford the latest technologies in order to be highly efficient. This reduces their reliance on entry-level labour. At the same time, the number of large organisations is decreasing all the time. Agricultural analyst JP Landman reports that the number of commercial farmers in this country has dropped from 66 000 in 1990 to around 37 000 today.

This trend is not unique to South Africa, and results from low margins at farm-gate level. These force commercial farmers to consolidate in order to gain economies of scale. However, even giant value chains cannot exploit all the land that is available. In fact, most of the developing world’s available agricultural land is in the hands of subsistence, small-scale or family farmers. And the world has now realised that these farmers can play a key role in eradicating hunger, reducing rural poverty and improving global food security – but only if these farmers are assisted to achieve sustainable agricultural production.

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Celebrating family farming
The UN, through the Food and Agricultural Organisation (FAO), has declared 2014 the International Year of Family Farming. Governments around the world have been invited to:

  • Place small-scale farming at the centre of regional, national and global agricultural, environmental and social policies;
  • Elevate the role of smallholder farmers as stewards who manage and protect natural resources and drive sustainable development.

Farm size is not the issue
Currently, large- and small-scale farming seem incompatible. Large commercial producers operate within systems dominated by multinational corporations with influence across the entire food supply chain. By contrast, small-scale farmers exist either at subsistence level or are able to sell only small surpluses on their local markets. But when looking to improve the contribution that small-scale farmers can make to society, it is important to remember that the descriptor ‘small-scale’ does not necessarily refer to the size of the land.

It can refer to the type of product the farmer is producing, the market in which he is operating, or the farmer’s reasons for farming. Often, ‘family farming’, for instance, is about a way of life and not only about commercial ambition. However, if a small-scale farmer wants to be profitable – or become part of the commercial value chain – there are some basics he can easily apply to his operations to quickly create meaningful and visible change.

The first is knowing the market that is available; there are crop and market combinations that suit smaller operations better than large ones. Logistics should also influence production decisions, because they dictate how, when, in what condition, and at what cost produce can be taken to the market.

Government’s crucial role
At the same time, government has a role to play in terms of refocusing policy so that it enables closer relationships between producers and consumers. It is only at macro level that local or regional markets can be revitalised and organised in ways that create space for small-scale farmers.

The next step is to join forces. Collaborating with like-minded or like-sized farmers can create a unit that acts as if it is a large-scale producer. This results in more cost-effective purchases, more favourable insurance negotiations, access to extension services and the ability to sell in bulk, which helps reduce the cost of logistics. Collaboration also helps small-scale farmers to create contract opportunities, limit price risk and make finance more accessible.

It creates the opportunity to develop a better understanding of the value chain, which could open doors for farmers to actively contribute to the value chain by adding value to the product they present to the market. In addition, effective producer organisations serve as a source of knowledge and mentoring.

However, collaboration needs the right combination of managerial expertise, capital investment, and structuring of the group. Even with shared interests, members within a group must be highly motivated to work together, and proper principles and rules are essential to ensure cohesion of intent and action. In addition, before involving other farmers, it is important for a small-scale farmer to make sure that what he is doing right now in his operations is top-rate. Involving more farmers means growth. Growth based on a flawed operation will fail. Small-scale farmers should therefore strive for excellence before going big.

Finally, just as the small-scale farmer needs to do a little more to become commercially viable, mainstream agriculture also has a role to play.  What is needed here is to focus on how to develop and integrate small farmers into an overall system that becomes self-sustaining and ensures job creation, economic stability, food security, and food self-sufficiency.

Email Nico Groenewald at
[email protected].

The views expressed in our weekly opinion piece do not necessarily reflect those of Farmer’s Weekly.