Small-scale farmers reject R1.2bn government relief package as too small
Farmers say they cannot cover operational costs during the Covid-19 lockdown and jobs have been lost
While the agricultural sector escaped some of the strictest Covid-19 lockdown regulations as it is regarded as an essential service, small-scale farmers have spurned the government's R1.2bn relief package that was set aside to assist them as too little.
The small-scale farmers are the second business grouping to express dissatisfaction at the government’s support. Their counterparts in the taxi industry have rejected a R1.14bn relief package offered by transport minister Fikile Mbalula. Taxi owners rejected the amount — believed to be R20,000 per taxi — as too small, and were also irked by the conditions accompanying the package.
The farmers said they struggled to cover operational costs and were forced to retrench their workers to keep operations going, and it is likely to take a long time to recover.
Agriculture is among the resilient sectors in SA as it continued operating during the lockdown. It contributes about 3% to GDP and is responsible for about 900,000 jobs.
In April, agriculture minister Thoko Didiza announced the R1.2bn relief package to help the small-scale farmers weather the effects of the coronavirus lockdown on their operations, with priority given to women, youth and people with disabilities. The farmers have an annual turnover of between R20,000 and R1m.
The department said more than 50,000 applications were received. Successful applicants received assistance according to the size of their farming operations, up to a maximum of R50,000.
More than R500m has been disbursed so far, but the relief does not cover farmer debts, mechanisation, infrastructure and overhead costs.
Didiza’s spokesperson, Reggie Ngcobo, told Business Day more than 15,000 of the 50,000 applications had been approved.
Organic farmer Nomsa Ngwenya, who farms Moringa — a plant considered to be a highly nutritious superfood — at her 42ha farm in Phalaborwa, Limpopo, said she received R23,000 in relief funding from the state.
“It’s relief, yes, but it’s a drop in the ocean. I had to reduce my workers from 28 to 16 during the lockdown because we were not getting any income” she said.
“For small-scale farmers, Covid-19 was a big problem. It’s going to take us a very long time to recover from this pandemic. Before Covid-19 came we were experiencing the drought problem.”
Another farmer, Isaac Muvhali, who produces beef, pork, chicken and maize in Balfour, Mpumalanga, told Business Day on Thursday that while he had received R32,000 in relief funding, he had struggled to pay the salaries of his 15 workers during the lockdown.
“I think we are going to struggle for a long time as smallholder farmers before we can turn the corner. We could end up retrenching as a result,” said Muvhali.
Mayoyo Mngomezulu, general secretary of the Food and Allied Workers’ Union, said their members in the agricultural sector had to agree to salary cuts to “avoid retrenchments”.
“Others were infected by the Covid-19 due to non-availability of PPE [personal protective equipment] and as a result were discriminated [against] by the employer and dismissed,” he said, stressing they were fighting this through “legal processes”.
Vuyo Mahlati, president of the African Farmers Association of SA, which represents more than 300,000 smallholder farmers, said there was “no doubt that this support is not sufficient” because farmers operated at different levels.
“The majority of smallholder farmers did not get the relief, that’s the reality we face. They lost their market channels, in terms of [selling their produce to] informal traders and local events such as weddings [and] funerals,” said Mahlati.
She said government procurement was also a “big issue that needs to be challenged”. If the government had a structured procurement plan in place it could have helped ease farmers' financial burdens. There was nothing stopping the government from procurement of fruit, vegetables and other produce for the national school nutrition programme, or for its old-age care facilities, prisons and hospitals.
Mahlati said the fact that the Land Bank — the state-owned specialist lender to commercial and emerging farmers — “is in a crisis” did not help farmers during the pandemic.
“They could not assist farmers in their time of difficulty by disbursing funds and loans,” she said.
In June, the government allocated R3bn to recapitalise the Land Bank, which holds 29% of SA’s agricultural debt, after it asked for a R22bn cash injection to the plug holes in its balance sheet.
Transvaal Agricultural Union general manager Bennie van Zyl said the relief fund was not sustainable as most smallholder farmers were not even producing enough food to sustain themselves.
Van Zyl said the government must assist smallholder farmers to sustain their businesses because merely throwing money at them “is not sustainable”.
FNB Agribusiness senior agricultural economist Dawie Muree said the government must work with the private sector to ensure that smallholder farmers who benefited from its financial schemes could be sustainable in the future.
“The focus should be long-term sustainability,” Muree said.
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