The economic concept known as opportunity cost is what needs to preoccupy the minds of those who are involved in policy development and implementation. Policy development is always faced with two or more potential scenarios. The art of careful considerations, weighed balancing of convergences and divergences forms the backbone of policy making.
Perhaps, it is important to outline that the policy making process briefly discussed in this piece is that which is led by government as the custodian of the interests of the country’s majority. The agricultural sector like any other sectors in South Africa is also faced with difficult policy choices. This is the case because, among other things, South Africa’s agriculture has a history that is associated with the Native Land Act of 1913.
This Act is one of the pieces of legislations that led to the racial skewness in land ownership. It is intuitively obvious that the biggest losers because of that piece of legislation, Native Land Act – 1913, were Africans. The current structure of the sector to date still possesses some of the remnants of that Act and other pieces of legislation.
The minimal participation of black role players in the different value chains is a reality that was created by the history of separation and segregation treatments. The market forces had a less role in creating the present problem – government strong hand created what government of that time wanted.
Producer representation on the Policy discussion
The voice of the organised big (in value or volume) farmers, who are predominantly white, is consolidated through different structures at commodity levels that filters to the national level. The interests of these farmers in respect of their continued viability are safeguarded by the representative bodies.
On the other hand, the voice of disorganised small (value or volume) farmers, majority are black, is represented by different organisations. It is worth to noting that some of the representative bodies of the small farmers are well organised while some still have a room to improve.
The interests of both big and small farmers have many areas of convergences and because of historic laws and practices; there are obvious areas of divergences. On convergences – it is important to note that increased diplomatic relations the South African government create, the better is the prospects of trade relations (regional or bilateral). It is in the interest of all farmers for research to be conducted on the treatment of diseases and pests or genetics aimed to create tolerances on some of the natural events. The list of areas of convergences is long and the highlighted one are the most obvious.
On divergences – the issues of equitable access to productive land and associated water-use rights are an emotional one. Interestingly water access is emerging as one of the areas where there are reservations. Perhaps one of the most obvious is the issues of access to formal markets. In this piece I intent not to address how these need to be addressed.
Differences in role-player interests
The policy discussions across different and within different sectors of any economy are characterised by different viewpoints. The producers or farmers are not the only affected stakeholders in policy discussions within agriculture. Government, labour, value chain actors, products and civil society formations all have roles to play or represents specific interest.
These viewpoints in policy discussions are not only different but more often opposite on some of the most fundamental issues. In pursuit of each stakeholder participating with the interest of positioning their possibility of benefiting positively from any potential policy changes – they stand to present scenarios that will benefit them even if they are to the detriment of others. Unfortunately, some of those will create direct confrontations.
The manner in which the policy actors navigate through their differences is very delicate and often lead to the collapse of the talks. It is almost impossible to imagine a policy discussion where all stakeholders agree on every aspect of the decisions, hence the importance of a policy concept of trade-offs. In order for trade-offs to be made there must be a realisation that the present state is not the desirable and the envisaged state is better. In order to get to the envisaged state, it is in the interests of all actively participating to moderate their expectations (potential benefits) in order not to squeeze life out of the other participants.
Businesses invest with the aim of getting returns from their investments. The jobs that are created by businesses as they invest are on the inputs side of their production equations. This means in order for businesses to generate returns they need to employ a certain number of labour hours needed to generate the envisaged value. Therefore, in cost minimisation approach ideally investors need to get these labour hours at the lowest cost possible. The voice of labour – is aimed at ensuring that labour hours are paid the best prices possible (in this case labour and business have clashing needs).
That is in the interest of business to get the highest level of output per unit of labour hours – productivity. Considering that labour time is hired, labour ought to give the best to businesses. However, the levels of productivity levels in South African agriculture still need to improve. I must admit that it is not the sole responsibility of labour to have this challenge addressed but a responsibility of the employer as well. South Africa’s agriculture saw a phenomenon of labour losses and casualisation with technology coming on board at high levels.
The arguably low wages in agriculture led to the process of setting up minimum wages in South Africa. These minimum wages were primarily driven by government and labour to improve the living standards of workers. Whether or not this led to the achievements of the desired objectives I will not address it in this piece.
Policy discussions, unlike playing with numbers, do not have definite answers to all interests of different stakeholders. Until all agree that the envisaged future direction is better than the present, progress will always be stalled. Policy decisions are by design not simple and straight forward, and that is informed by the configuration of actors in a system. Arguably, every thing regarding policy discussion is contestable. The power dynamics of stakeholders need to be managed to ensure that the ultimate direction is the most desirable – in terms of its welfare effects.
Disclaimer: The views and opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of Mzansi Agriculture Talk or its members.