State aid not getting to black farmers
Study shows corruption a hurdle for access to limited available funds
In post-apartheid SA, land is one of the most fraught issues, yet the government, the potential kingmaker for transformation of ownership, uses vital resources for politicians’ self-enrichment and nepotistic favours.
An intern at the Institute for Poverty, Land and Agrarian Studies — a leading research and policy organisation — Mnqobi Ngubane, a PhD candidate at the University of the Western Cape, examined the government’s support for black commercial farmers in the eastern Free State and found it failed them badly.
Land redistribution and loans from the Land Bank are the foremost means for black commercial farmers to acquire land. The specialist agricultural bank was formed in 1912 — just before thousands of black farmers were reduced to poverty by the 1913 Land Act that reserved most land in SA for whites — and has a mandate to provide financial services to commercial farming and agribusiness.
In democratic SA, the Land Bank’s mandate is to avail appropriately designed financial products to facilitate access to finance by new entrants to agriculture from historically disadvantaged backgrounds. Land redistribution is a post-apartheid government-led initiative intended to restore property to previously dispossessed people.
Ngubane analysed how income from grain production helped new farmers in the Free State generate profits.
"Farmers who are on upward trajectories of accumulation access off-farm capital, including retirement or resignation packages from skilled employment, especially civil-service, some small-scale business and other resources obtained through means which includes — but is not limited to — state corruption," he says.
Struggling farmers do not have ready access to off-farm capital and need state assistance for their farms to produce, compete and have some longevity. Often, the go-to racist narrative is that black farmers cannot farm successfully, but Ngubane says the reality is that they do not have the means to do so.
State support for farmers was successful during the apartheid era, but is unable to assist previously dispossessed black farmers in the post-apartheid dispensation. White farmers in the colonial and apartheid eras, received immense government assistance, which helped them grow and create a bountiful economic sector.
"Where state support is evident … farm productivity increases and there are greater chances of re-investment and sustainability," Ngubane says. "There is room for political will on the part of state actors to support a broader, more-deserving constituency of struggling farmers on redistributed land in SA."
The Department of Rural Development and Land Reform offers support through recapitalisation funding for struggling farmers, but this is not equitably distributed, he says. The African Farmers Association of SA (Afasa), the primary representative body in the Free State, prioritises its members and more successful farmers for support, says Ngubane.
"When state resources are distributed via the farmer representative structure, they do not filter all the way to struggling farmers," he says.
He draws parallels with the mine workers in Marikana in 2012. They rejected the National Union of Mineworkers as their representatives, accusing them of selling workers out. The Association of Mineworkers and Construction Union quickly became the major union there.
The farmers claim Afasa’s leadership in the eastern Free State negotiated rental agreements with struggling farmers for their own benefit when the organisation claims that it supports emerging farmers.
However, the struggle is not confined to mine or farm workers, but is part and parcel of the system of racialised capitalism that continues to define the economy today. Black farmers want state support to be paid to them directly, not via so-called farmer representatives.
A farmer who requested anonymity told Ngubane: "I’m not a member of any farmers’ organisation because there are no benefits. There is corruption, it’s a waste of time and only a selected few get benefits in farmers’ organisations."
In his study of 62 farmers in the eastern Free State, Ngubane’s data "showed a drop of 55% [in farmers’ organisation membership], meaning that farmers are distancing themselves from these organisations due to the lack of resources".
He emphasises that the bureaucracy farmers face attempting to acquire resources was not always the norm. Agriqa, which later became AgriEco after it was disbanded in the mid-1990s, was a parastatal that subsidised comprehensive farming inputs through loans payable at the end of each farming season.
Farmers spoken to said that what Agriqa did well was that it allowed them to "farm productively". Agriqa’s dissolution, Ngubane argues, had more to do with the company’s racial composition than their efficiency.
"Their personnel should have been kept for technical advice. Yes, the white administrative elite of Agriqa was backward in its racialised stances during apartheid, but in scientific terms they were economically sufficient when it comes to the technicalities of farming," he says.
Its dissolution in the mid-1990s has created two polarising farming groups — which he terms "struggling farmers" and "successful reproducers and accumulators". Of the 62 farmers he studied, 71% were struggling and 29% were successful.
Successful reproducers are farmers who can make back the money they invested at the start of a season. Ngubane did not expect them to make much profit, just enough to farm again the following season. Successful accumulators are those who make a profit (and by virtue of that are already reproducers).
Struggling farmers are those who battle to make it to the next season by virtue of not having off-farm income and they often have to sell pieces of land to keep farming – a vicious cycle of uncertainty.
"These farmers are largely unknown and differentiate in scale and methods used to acquire land and location, but what unites them is mainly their lack of the means to invest in capital-intensive farm production to meet latter-day market demands within a capitalist world economy," Ngubane says.
"The struggling farmers in the eastern Free State are aware of current state support mechanisms such as recapitalisation funding and other forms of support such as mechanisation, as well as drought and fire-relief packages available for black commercial farmers. However, the distribution of such state support is problematic — only a few politically connected people seem to be major beneficiaries."
The struggling farmers need income to make their farms profitable and become reproducers to keep the Land Bank from auctioning off land that they acquired through bank loans. In a bid to achieve this, many struggling black farmers have resorted to renting land to white commercial farmers.
Ngubane holds there is hope for these farmers, particularly because there was a successful funding model as SA began its transition into democracy. Needed is effective and equitable redistribution of resources; fair and fit representation in farmer organisational structures, and partly freeing state support from these structures to ensure they do not monopolise resources.