South Africa's experience of agricultural transformation

When I was requested to make an editorial contribution to your publication, I leapt at the chance. I view this as the platform through which our country and the rest of the world could share the exciting times which we are living through around agriculture and rural development. After having tried for almost three and a half years now, the international community might be interested to know about the outcome of our efforts in trying to transform the agricultural sector. Clayton Manjome is the PRO for the Deputy Minister of Agriculture of South Africa. (Views expressed in this article do not necessarily reflect those of the Deputy Minister of the National Department) I begin this article by looking at the situation in retrospect. From this I move on to policy processes that we had to undertake in our effort to improve on the undesirable situation of the past. I will then give you a few examples of our real achievements during the three and a half years we have been trying. I conclude by discussing our vision for further development and expansion of the sector and potential impediments, both human made and natural. The present National Department of Agriculture inherited not less than ten departments that were fragmented across the country. They originated from past policies of the discredited, now defunct homeland administrative system. In real terms the so-called departments consisted of a well developed commercial sector that heavily relied on state subsidies for survival and sustainability. (As of December 1996 total debt of this sector to the State and other lenders was R17 billion). On the other extreme we had non-developed, forgotten and neglected largely peasant sub-farming sector. Sadly, the latter sustained and supported more than 80% of the population. Despite its potential to thrive, there was clear unwillingness by authorities of the day to invest in it. The result was that food security in those areas was drastically undermined. The people there remained poor, and became a net importer of food which, given the opportunity, they could quite easily produce for both consumption and commercial purposes. Taking all the relevant factors into account-positive as well as negative, we had to emerge with a new vision of agriculture that promoted and addressed the interests of all those willing to farm, and who could do so productively and profitably. Our White Paper on Agriculture, a document which is a product of a long, consultative process presents that vision thus: 'A highly efficient and economically viable market-directed farming sector, charaterized by a wide range of farm-sizes, which will be regarded as the economic and social pivot of rural South Africa and which will influence the rest of the economy and society.' As I have pointed out earlier on, we had two distinct groups of farmers - one largely white, well developed and heavily reliant on State subsides, either directly or through other statutory instruments. The other group was exactly the reverse. So naturally, this vision posed challenges to the sector concerning the managing of potentially conflicting requirements by these different kinds of farmers. To accomplish this vision, six critical agricultural policy goals had to be pursued. For the purpose of this article I will list only two that in my opinion have a direct bearing on the activities of the small-scale emerging farmers: The broadening of access to agriculture via land reform should be enhanced by adequate agricultural policy instruments, and supported by means of the provisions of appropriate services; and finance systems will have to focus on the resource-poor and beginner farmers, thus enabling them to purchase land and other agricultural inputs. The process to review the Agricultural Policy started shortly after the birth of the democratic government, and was in four phases. However, it only gathered momentum during the past two years. The first stage in the policy process towards this direction had a special focus on the broadening of access to agriculture - known as 'BATAT'. BATAT was a thrust, a movement aimed at a dramatic shift in thinking, a philosophy that aimed to transform the countryside in an equitable way. What we needed to do first was to put some of these policy changes into immediate practice. In the area around the provision of finance the National Department established a pilot finance assistance scheme that targets small and emerging farmers. All government had to do was to make the funds available for small to medium-term lending. Based on the principle that government is not a banker, the administration of the scheme has been largely left in the hands of private agencies. More than 20,000 farmers across the country have already benefited from this pilot scheme. There are also initiatives in place designed to address the long-term financial needs of the emerging and small-scale farmers. These too, were a result of consultation that looked into alternative ways of financing agriculture with the potential to address the disparities of the past. The first step we took was to abolish the Agricultural Credit Board. The Board, as its name suggested, was mainly sustained through direct state support and involvement in almost all the key aspects of its operation and management. The second was to establish what we see as a creditable, small producer-friendly financial institution called the Land and Agricultural Bank. This coming year the bank is set to launch a number of new products to offer emerging farmers. These will include new savings schemes, a risk insurance fund, a discount bonus and, most importantly, a more flexible criteria in the assessment of loans. Although we have seen successes in many instances as a direct result of our policy shift, the dry spell that had been forecast to prevail for the 1997/98 season is likely to curtail even some of the handsome progress so far achieved. South African farmers, have been taking precautionary measures to effectively deal with a possible drought. Some advice being given to small emerging farmers is to spread the risk by diversifying their crop base or shifting into other agri-business ventures on which they could fall back in times of droughts or other forms of disaster.When I was requested to make an editorial contribution to your publication, I leapt at the chance. I view this as the platform through which our country and the rest of the world could share the exciting times which we are living through around..