Small-scale farmers should be the key beneficiaries of rural land reform
About 1.4-million jobs and livelihood opportunities can be generated over the next 15 years through government and land redistribution
The politics of land is boiling over, bringing immense dangers but also opportunities. Amending the constitution to allow large-scale confiscation of land without due process could lead to huge disinvestment and declines in production and employment. Rather, we should make land reform a higher priority, give it a larger budget, rethink failing policies and renew the institutions responsible for their implementation.
It is clear that new policy frameworks must include a focus on urban land. These must aim to enable sound planning for human settlement and deal with the apartheid geography still evident in our towns and cities. But the largest area of land affected will be rural, and clarity is urgent on who will acquire rural land and for what purposes. The answers are key to determining the degree to which rural land reform can help reduce unemployment, which is arguably our single most intractable problem.
Key subsectors in which smallholders can be competitive include vegetables, subtropical fruit and nuts, sugar and extensive livestock production.
President Cyril Ramaphosa believes that revitalised land reform can underpin growth and job creation. He is not alone in this; the National Development Plan (NDP) suggested a target of 1-million new jobs in agriculture and linked off-farm sectors by 2030. This would require a huge increase in the area under irrigation, investment in labour-intensive crops, bringing moribund land reform farms back into production and supporting agricultural development in communal areas.
We should re-examine these proposals, assess their feasibility and debate their implications for land reform policy. In my view, agriculture does have such potential but only if large areas of farmland are redistributed to smallholder farmers. In my estimation, 1.4-million jobs and livelihood opportunities can be generated over the next 15 years through a combination of government support for agriculture and the redistribution of 48-million hectares. This is 60% of commercial farmland.
From the total, I deduct 200,000 jobs potentially lost through mechanisation and displacement of farm workers through land reform, so the net gain would be 1.2-million jobs.
Key subsectors in which smallholders can be competitive include vegetables, subtropical fruit and nuts, sugar and extensive livestock production. Livestock is crucial, because most of SA is arid or semi-arid and unsuitable for cropping. Resilient small stock species such as goats and sheep survive droughts better than cattle. They are sold in large numbers in ceremonial markets in rural areas but have the potential to supply consumers in urban markets too. Wool farming by smallholders in parts of the former Transkei is increasingly profitable.
Stats SA suggests that about 200,000 market-orientated smallholders supply informal agricultural markets at present. If we include occasional livestock sales the number is probably larger — more like 500,000. These farmers should be the key beneficiaries of rural land reform. They have the potential to begin to accumulate “from below” and over time begin to challenge the dominance of white commercial farmers.
Opening up export markets for citrus and other labour-intensive crops could generate another 152,000 jobs. Enhancing livelihoods through communal area agriculture could benefit 194,000 people. (These estimates are based on those in the National Development Plan, but scaled back because water experts dispute its assertion that an additional 500,000ha hectares can be irrigated. I assume another 200,000ha.)hectares.)
A problem facing smallholders is that value chains of formal sector food processors and retailers are both concentrated, and tightly integrated and difficult to penetrate. Government procurement from smallholders could play a role, together with policies to support local, informal markets.
Bakkie traders who link farmers and consumers in the informal economy already exist in large numbers and could play a key role in efforts to invigorate the informal economy. Municipalities could provide space for food markets supplied directly by farmers as well as bakkie traders. Supermarkets in rural towns could also purchase fresh produce from such markets.
This line of argument cuts against the grain of conventional wisdom. There is a deep vein of scepticism in SA about small-scale farming. The dominant view among white farmers, bankers and agricultural economists, and perhaps ANC leaders and government policymakers, is that the beneficiaries of rural land reform must be black commercial farmers.
But this is a blinkered and narrow view, and potentially dangerous. Blinkered because it sees only large-scale commercial farming as “real farming” and ignores evidence of the productivity of small-scale black farmers. This view informs assessments of the “viability” of land reform projects and business plans, which are mostly drawn up by consultants, often retired or unsuccessful white farmers. Unsurprisingly, these plans always recommend commercial farming systems, never those practised by smallholders.
It is a view that is narrow in its strong focus on labour-saving technologies and in its disregard for informal agricultural markets (even though commercial farmers dispose of some of their produce in such markets). It is thus blinkered in its inability to understand smallholder production and livelihood systems on their own terms.
It is also a dangerous view. If a rural land reform plan aimed at deracialising commercial farming fails to deliver, it could gift the “land question” to populist politicians. By the 2025 elections, when youth unemployment is likely to be even higher than now, the constituency for this kind of politics will have grown considerably. The likelihood of short-sighted confiscation policies without an economic logic being adopted will be that much higher.
Of course, aspirant black commercial farmers deserve all the help the state and private sector can provide, including access to more land. But they face huge obstacles, especially in relation to finance and markets. To illustrate, the Land Bank is struggling to recover its loans to black commercial farmers. We should not underestimate the difficulties they face in attempting to enter a technologically sophisticated and competitive sector that is highly concentrated.
This means it is unlikely that much land can be redistributed to black commercial farmers over the next 15 years. If there are 5,000 such farmers at present (a generous estimate), and another 5,000 each acquire a farm of 1,500ha through land reform or market purchase by 2033, this will amount to 7.5-million hectares, a mere 9% of private agricultural land in SA. At double that rate, only 18%.
The problem with a rural land reform aimed at supporting only black commercial farmers is that the numbers simply do not add up. It is not a sustainable solution to an explosive political issue. To be clear, I am not arguing that we should try to recreate the African peasantry. We must look forwards, not back. But against all the odds, something like 200,000 small-scale, entrepreneurial farmers already exist.
Targeting such farmers as the key beneficiaries of rural land redistribution is the only way to square the circle of a land reform that achieves both its political and economic objectives.
• Cousins is a professor holding a DST/NRF research chair in poverty, land and agrarian studies at the University of the Western Cape.