The deregulation of South African markets meant reduced support for farmers (in the form of subsidies and protection from the global competitors). This came into the agricultural sector which is characterised by an uneven playing field, where the commercial farmers (mainly white farmers) dominate in terms of the land area and the output per farmer on one hand and on the other smallholder farming sector (mainly black farmers) operate under a poor farming system. As such, deregulation of markets presented farmers with new opportunities whilst, for others, it presented constraints.
Understandably, the common argument is that the ability of smallholder farmers to raise their incomes from agricultural production, natural resource management, and related rural enterprises largely depends on their ability to sell their produce not just at local, but also to regional and even international markets. However, in addition to challenges imposed by changing economic, environmental and socio-political conditions, these farmers must compete not only with their local peers, but also with well-established domestic and international agribusinesses.
Moreover, the shifting of the demand to high-value products as well as the rise of supermarkets around the world has implications for the procurement systems and introduces new quality and safety standards. Subsequently, smallholder farmers’ participation into the so called “high-value markets” is hindered by the lack of use of new technologies, high transactions costs, low volumes and credit constraints, among others.
It is appreciated that there are a number of intervention measures that have been instituted to support smallholder farmers through the likes of Land Bank, IDC, MAFISA, CASP, Lima, SEDA and so on. These support services vehicles present an opportunity for farmers to develop and be able to improve their welfare. However, the support arrives in bits and pieces and therefore it does not usually have the desired impact, thereby amounting to wasteful expenditure, particularly in cases where supported farmers still bow out of business.
So, if the argument is that the barriers to market access could be reduced for smallholder farmers, then the question would be which aspect should the support be channeled into? Is it on the inputs? On Infrastructure? On logistics? On safety and standards compliance (such as certification)? On skills development and so on?
A straight answer would be that the form and extent of support should be subject to the specific conditions of the recipients.
Now, as we are talking the language of commercialization of farmers, the support strategy should also change. The proposition is that we should adopt a model that says if a farmer has been identified for support, there must be thorough assessment of all the needs of that particular farmer or all the barriers he/she is facing. Then all the necessary structures required for full support including the issues of certification and Environmental Impact Assessment (where necessary) must be identified and be pulled together. Even if the support does not produce a fully-fledged commercial farmer, but, at least, the farmer should be in a strong position to farm sustainably and be able to qualify for credit if needs be.
At the end of the day farmer X must be moved from point A to point B and we move to farmer Y. This could also improve the monitoring system of the effectiveness of support services offered to farmers.
Kayalethu Sotsha is an agricultural economist by profession. He writes in his own personal capacity. The views expressed here are those of the author and not of Mzansi Agriculture Talk.
