On June 9, I presented at the South African Cane Growers Association’s annual general meeting. My talk was, titled South Africa’s agriculture in the economic reconstruction and recovery narrative.
I reflected on South Africa’s agricultural performance over the past decade, which has been fantastic. The volume of production has expanded by 19% between 2010 and 2020. Over the same period, the value of production has grown by 44%. This growth has been widespread across all agricultural subsectors – horticulture, livestock, field crops and animal products. The only weakness over this period is that inclusion – share of black farmers participation – has remained negligible in several subsectors, at best averaging between 5-10%, according to data from the National Agricultural Marketing Council. The only subsectors with encouraging numbers are the sugar and livestock industries, where commercial share contribution by black farmers is over 20%.
We all know that effective partnerships between commercial farmers and new entrants into the sector have been one of the ingredients for this success. But this is not a focus of this particular note.
At the end of the presentation, we had an open discussion about a range of issues from land reform, climate change and trade matters, amongst other aspects. But what stuck to my mind is a concern expressed by some producers (farmers) about the failing small towns across South Africa. The poor service delivery by municipalities is driving business away and leading to ghost towns. We have recently learned of a similar situation with Clover leaving Lichtenburg because of poor service delivery by municipal officials. This challenge is not unique to Lichtenburg but familiar across many towns across South Africa.
In 2019, following a farm tour I did in the Eastern Cape, I recounted my experience there in a blog post. My reflection drew from a 2017 essay by Phumulo Masualle, former Premier of the Eastern Cape. In it, Masualle called for the revitalisation of rural, small towns.
In short, he argued that the demise of South Africa’s rural small towns stems from the lack of economic opportunities and declining quality of life owing to poor infrastructure and a lack of new private investment. This is partly a result of the reluctance to transfer excess public land to black South Africans and also the fact that the South African government have failed to transfer land rights to land reform beneficiaries, and also address the tenure issues in communal land, amongst other factors.
Importantly, the reluctance to transfer ownership to land reform beneficiaries also means that the municipalities cannot levy rates and taxes. In this sense, the tenure arrangements are starving rural municipalities of their ability to raise their own funds and makes them overly reliant on the equitable share from the National Treasury. In Metros, where title deeds are commonplace, the municipalities are for the most part self-sufficient as they can raise their own revenue via the Local Government: Municipal Property Rates Act. As long as the majority of land continues to be owned by the state (e.g. the former homeland areas), there is no legal basis for municipalities to leverage rates & taxes from occupiers.
In that same 2019 fam tour, I stopped at Cradock, a small Eastern Cape town, to give a brief talk at a farmers’ meeting. Thank goodness the town at the time didn’t precisely fit Masualle’s description of the situation in other small rural towns across South Africa. The only factor differentiating Cradock from some small rural towns until this day is its vibrant wool, beef, dairy, fruit, lucerne, and mohair industries. The commerce and services that occur in the city centre are one way or another linked to the health or sustainability of the agricultural businesses, which in the recent past have not been smooth sailing. (By making this statement, I am not ignoring the drought challenges facing the southern regions of the Eastern Cape at the moment. The good rains that most regions of South Africa enjoyed since the start of the 2020 summer season didn’t reach much of the province).
Drawing from conversations with farmers in Cradock in 2019; climate change, biosecurity, water regulations, and land reform were amongst the factors that keep some farmers up at night. Sadly, we have not made much progress in all these aspects three years down the line. Covid-19 has also done its fair share of disruption from the work plan of both industry and government.
Still, the important thing is that these matters are within the regulator’s or government’s control, which I hope will continue to have close cooperation with organised agriculture groups in addressing them. Such progress should happen while pursuing the transformation objectives in the agricultural sector at the same time. An avenue to address all these challenges is the Agricultural and Agro-processing Master Plan, which is at its final stages. All social partners are currently at consultation stages with their constituencies about it. I hope that there will be broad consensus on its vision and unity to push for its implementation, right after the publication which I hope will be within the next two months.
A practical implementation of the Agricultural and Agro-processing Master Plan, coupled with the government’s intention to release land rights to the proper beneficiaries — not the politically connected and the weekend farmers’ crowd — would be a step in the right direction towards revitalising the small rural towns. But also crucial in the process would be to focus on beneficiation of some agricultural products, particularly in the former homelands’ small towns where the only economic activity seems to be retail on the back of remittances and government social support finances.
So, to former Eastern Cape Premier Phumulo Masualle’s proposition of revitalising rural small towns. I would present to him, as I did in 2019, that this should start with the revitalisation of agriculture and, in the process, enticing agribusinesses to expand operations to such towns, then focus on beneficiation. Importantly, the revitalisation of agriculture will help nothing if the management of small towns are not improved. Such improvement in the management of small towns requires a qualified financial officer, qualified civil engineer and electrical engineer, proper billing, a non-corrupt mayor and councillors and a reduction of the large bill and salaried staff to the bare minimum so that money can be used for waste removal, waste management, sewerage systems, roads, water provision, etc. These are tough decisions but all essential if we are serious about transforming South Africa’s small towns from “Ghost towns” status to vibrant towns.
These improvements need to happen simultaneously and not before or after agriculture revitalisation, which will be supported by the Master Plans. Crucial to remember is that the beneficiation of agriculture (locally) can only happen if the towns are functional. The same for businesses – they cannot operate if the basics are not in place. So, if, as South Africans, we are serious about creating employment, and boosting economic growth in rural areas, the key will be the local towns, not agriculture on its own.