/Land reform that unleashes a rural economic miracle should be the goal

Land reform that unleashes a rural economic miracle should be the goal

2019-07-28 07:21

If integrated agriculture value chains are combined with improving the quality of public schools, hospitals and infrastructure in towns, the flight from rural areas to cities can be slowed down and an economic miracle could be unleashed, writes William Gumede.

Only focusing on the transfer
of land to previously excluded communities as a measure of successful land and
agriculture reform, as currently appears to be, is spectacularly misplaced.  

Successful land reform
is developing the entire commercial value chain that brings the agriculture
product from raw material in the field to the refined product, its by-products
and services.

This would include the
inputs to agriculture, whether the consumable ones, such as seeds, fertilisers
and oil; and capital inputs such as tractors, machineries and tools to produce
the agriculture product.

It also includes agriculture-based
manufacturing, machinery, equipment and tools, and technology production. Very
few developing countries link agriculture to manufacturing. The inputs for
agriculture manufacturing have great catalytic power to boost manufacturing
across economic sectors. 

The agricultural
logistics, transport and branding are crucial commercial elements. But it also
includes agriculture education – from vocational education, colleges to
high-end research at specialised agricultural research and higher education

Developing and
maintaining rural infrastructure, environmental management and tourism are
critical to the value chain. It also includes private and public financial
services focusing on land and agriculture.

The catalytic
development, jobs and wealth are not in producing only the raw material – as the case in many African and developing
countries with abundant land. The jobs, industrialisation and growth take place
in processing, adding value and providing niche products out of the raw

Sadly, most African
and developing countries export raw materials, with the processing, value-adding
and manufacturing taking place in other industrial countries, and increasingly
in emerging markets such as China, India and South Korea.

The raw material
exports from African and developing countries typically produce less jobs,
wealth and growth; while the value-add process in industrial countries create
more jobs, wealth and growth. African and developing countries then import the finished
products at higher prices.

An integrated land and
agriculture reform programme in South Africa should therefore encompass the
whole private, public and infrastructure value chain of land and agriculture.

Overall, land and
agriculture reform must be done in a way that protects food security, by retaining the existing competitive
agriculture sector, and making blacks already
farming, whether informal, small scale and emerging farmers, more
efficient, diversified and export competitive.

A core pillar must be
to ring-fence commercial agriculture to keep the country food self-sufficient,
retain current agricultural jobs, high-grade farming skills and export income.

In commercially viable
farms, where practical, legitimate farm employees who are active in agriculture, could be given shareholder options,
profit-sharing and of course treated with dignity.

Any empowerment in the
land and agriculture sector should be focused on building pragmatic, honest and
merit-based black economic empowerment in the entire value chain. 

A new lease on life for countryside

A number of South
Africa’s declining rural towns can be given a new lease on life by being turned
into agribusiness towns – where products can be processed and beneficiated. Bigger
rural towns can also be transformed by establishing agricultural vocational education,
research and technology hubs.

In order to develop
land and agriculture value chains, communal land must be transferred to
individual households. Newly empowered recipients of communal land can then
enter into commercial agriculture cooperatives, to collectively access
training, new productive methods and markets.

Of course, it will be
crucial that emerging or new farmers diversify farm products, farming products
that the country, Africa and the world needs. Furthermore, emerging farmers
must focus on the export market.

A good example of successful cooperative small-scale farming is Italy’s Emilia
Romagna region, where cooperatives produce 30% of the region’s GDP. Furthermore,
many food processing companies in the rural areas of Italy, Uruguay and the
Quebec region of Canada, are cooperatives.

Brazil is an example
where there has been a focus on export agriculture manufacturing, producing new
products such as biofuels from raw materials and creating a technology industry
linked to agriculture and land. Brazil has established agriculture-based
schools, vocational institutions and higher research institutes in rural areas.

Young people are kept
in the rural areas during agriculture based technical education, manufacturing
and farming. Brazil has successfully managed to get small farmers to diversify
their products, created agribusinesses in rural areas and built a farming
machinery industry. Its “More Food Program” encourages smaller
farmers to produce diversified products that are sold to government agencies,
such as the army, schools and feeding schemes.

A rural economic miracle is possible

If integrated land and
agriculture value chains are combined with improving the quality of public
schools, hospitals and infrastructure in such rural towns, South Africa’s rural
areas can be re-energised, the flight from rural areas to cities slowed down and
a rural economic miracle could be unleashed.

Available state land, whether under the control of SOEs, municipalities or
provinces, should be made available to farmers already active in farming – not
given to political farmers.

White individual
farmers, agricultural companies and the private sector can mentor, partner with
and share markets with black farmers. Where practical, white farmers must
create social pacts with their employees – in which they provide housing,
skills and profit-sharing. Such social pacts at the farm level will better
protect farmers against political “farmers”, local opportunists and crime. 

To foster a
manufacturing sector out of agriculture – focusing on new agricultural products
which the global market needs, agricultural processing and beneficiation, South
Africa will have to use foreign policy more strategically, to open up new
foreign markets in Africa and the developing world for the produce of black

To make land reform
more pragmatic, sustainable and inclusive will need heavy doses of political
will, which is currently in short supply. Sadly, aspects of land and
agriculture reform have already been captured in the same way that black
economic empowerment (BEE) has been captured.

Under no circumstances
should land be transferred as part of “restitution” to the
politically connected, traditional leaders or to the state – that is a repeat
the empowerment of the connected as seen under BEE. And to perpetuate the
collapse of commercial agriculture, food security and jobs.

Some political
leaders, civil groups and actors are pushing land reform for purely
ideological, populist or self-enrichment reasons, yet claiming they are calling
for land reform to reduce black poverty. Others use land reform to secure votes,
and therefore will oppose more sustainable land reform.

The opposition to
pragmatic, inclusive and long-term industrialisation enhancing land reform is
massive. Some politically connected “businessmen and women” will
oppose any pragmatic reform because they are looking forward to enrich
themselves out of land reform. Many African traditional leaders
would of course vehemently opposed the transfer of communal land to
individuals, even if doing so empowers the very “subjects” whose
interests they claim to serve.

Many traditional leaders insist communal land remain in their “trust”,
rather than being transferred to individuals, because it entrenches their stranglehold
over public resources and is a source of patronage and self-enrichment.

Land and agriculture
reform that develops the entire agriculture and land commercial value chain is the
best strategic option for South Africa to create jobs, reduce poverty and lift
growth levels.

– William Gumede is associate
professor at the Wits School of Governance and author of South Africa in BRICS (Tafelberg). This is an edited version of a
keynote speech at the 10th Annual Departmental Extension and
Advisory Services Symposium, Department of Agriculture, Western Cape, 17-19
July 2019.

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