Former SA president Thabo Mbeki spoke of two juxtaposed worlds in South Africa: addressing the University of Chile in 2005, he talked of South Africa’s “two worlds of poverty and affluence”. Again later, he spoke of the huge gap between the “unemployable” of this country and a highly skilled sector. He also talked of a divided South Africa – one black, the other white. In May 2012, Mbeki’s brother author and commentator Moeletsi Mbeki spoke of the gap between two more groups in South Africa – the builders whom he referred to as “Afrikaner nationalists”, and the breakers and destroyers, the ANC nationalists.
South Africa’s history has always been factional and fractious. A further dichotomy is that between those who talk about agriculture and make laws about it, and those who actually work at it: the farmers, the labourers, the researchers, the veterinarians, the technicians, the breeders, the exporters, the support organisations and all those who are part and parcel of actually putting food on the table for upwards of 50 million people.
The amount of government effort dispensed in talking about land reform, in criticizing commercial agriculture, in putting out green papers, white papers and discussion documents on how to “reform” South African agriculture is only matched by the time spent at conferences, summits, forums and political congresses by officialdom proposing “turn around strategies”, “restructuring exercises” and the “rethinking” of yet another “five point plan”! The screeds written by academics at think tanks and universities and the long epistles composed by expensive consultants expounding the ideological theories of those who wouldn’t know a corn stalk if they fell over one, are prolific.
Valuable time and money is wasted by commercial agriculture reacting to the above. If some of the politically ideological schemes had been allowed to take root without the robust response and resistance from organized agriculture, South Africa would have been a net food importer a long time ago.
Most people haven’t the faintest idea about what goes on in South African agriculture, about the diverse facets of farming life, and what it takes to produce enough food to feed the country. It may be time to look at this, given the SA government’s planned jamboree to be launched on the South African public and internationally around the forthcoming 100th anniversary of the 1913 Land Acts. Demands will be made for “more land”, that land is an “emotive issue”. With the 2014 elections around the corner, the ruling ANC has nothing to offer other than the hoary old land issue. White farmland is as good as it gets as an ANC rallying call for redress for the land that was “stolen” by the white colonialists and apartheid practitioners.
(TAU SA intends to address the question of land ownership, the history of land in South Africa and the current question of productivity in forthcoming International Bulletins).
ON THE GROUND
It’s time to examine what happens on the ground, so to speak, as opposed to judging agriculture through the prism of the SA government’s portrayal of farmers as recalcitrant, parsimonious, obstructionist and a group which needs to be “brought to heel”. The suffocating legislation already in place has done much to drastically reduce the number of the country’s commercial farmers, as has the farm murder rate, the debilitating taxes, the stock theft, the lack of subsidies and the conciliatory attitude displayed by government towards militant and politically-directed labour union violence and destruction.
Who makes the wheels turn in South African agriculture? A quick flip through an agricultural magazine reveals who the real underpinners of food security in South Africa are. While the government talks, the farmers produce with the help of myriads of people and groups who are supplementary to keeping SA farming up there with the best in the world.
An editorial “The worth of water and civil servants” (Farmers Weekly 22.3.13) should be required reading for everyone who cares about his next meal. The editor bemoans the fact that water is wasted to such an extent that 30% to 37% is lost to theft and leaks. But government is slack in the planned recovery they promised: efforts to get municipalities to plug their leaks and reduce losses “have been in vain”, says the editor. “Leaking infrastructure must be repaired immediately”, but we know it won’t be. Not taking cognizance of this serious breach in the chain of optimal food production exposes this chasm between the reality and the ideological. (TAU SA has warned about SA’s water issues for years.)
Further articles cover food safety and how a Northern Cape farmer has mechanized as a result of the recent wage strikes: “Using a self-propelled grape harvester, he completes the entire harvest in about a week, with one or two workers. In the past it would have taken between 60 and 70 workers at least three to four weeks. Thousands of rands have been saved on labour alone”, says the farmer. There’s a story about a black couple who were land beneficiaries, who worked very hard and struggled because of the government’s inability to provide them with back up. “We received nothing apart from the land itself. I used my own savings, had to start from scratch, buy livestock, fix fences and restore the arable land”, said the new owner. He nearly went under but his farm is now being “recapitalized” by the government. (How can a farm be handed over without support to the beneficiaries?)
How to grow apples successfully is a good story, while the latest dairy prices and the decline in milk production caused by high input prices and no government price protection is reported. Drought conditions and beef prices are discussed, as are wool farmers’ harvests and shearing shed hygiene. Abalone farming in South Africa is currently so progressive that the country is now one of the biggest producers outside Asia. Columnist Peter Mashala criticizes the government land reform policy – “government throws a fortune at small-scale farmer development – yet fails to monitor the results”, he writes. High food prices are explained, how to “design” a herd through cross-breeding is discussed. There are tips on horse breeding and care, auction notices by the score and, importantly, a record of recent farm sales all over the country. (Why does the government talk of farm expropriation when there are plenty of farms for sale at market prices?)
The diversity of farming in South Africa is laid bare in these agricultural magazines, from the dry cattle farms of the North West to the Western Cape’s wine industry. The relatively new fish farms are gaining traction in leaps and bounds, while the Eastern Cape’s mohair farmers produce the best clips in the world. The country’s north east delivers top quality macadamia crops, bananas, semi tropical fruits and outstanding vegetables, while Kwa Zulu/Natal’s sugar farmers offer bumper harvests each year. Then there are the huge swathes of corn fields in the centre of the country that produce the staple food of South Africa’s 40 million odd black population.
South Africa’s commercial farmers received a bad press during the protests, riots and the inevitable violence that occurred some months ago as trade-unions and political wannabee’s stoked the fires for an increase in minimum farm wages which incidentally, have been set by government. (There’s an interesting Facebook contribution in the magazine from a farmer’s wife in reaction to the Western Cape strikes: “We have noticed that three farms in the district are now working at 40% of their original staffing levels, and the price of cattle is about 20% down on last year. I cannot see that anyone is happy with the new minimum wage levels”.)
A really succinct summary of what it means to be a farmer in South Africa appeared in an Afrikaans Sunday newspaper some months ago, just after the minimum wage strikes and violence. We translate this for our international readership.
Farmer Dries van Schalkwyk says it upsets him badly to read trade union leaders’ statements that farmers are “terrible” and “bad” because they pay their workers R69 per day, as if this figure alone represents the complete picture as far as labour is concerned on his farm.
“I am one of those “terrible” farmers who actually pays more than the basic minimum wage. There is a waiting list of workers who would rather work for me than live in a squatters’ camp, or work for someone in town who does not give any of the supplementary benefits I give my workers. So let’s look and see what I provide for them.
“They live in free housing which is of better quality than any low-cost houses in South Africa. I paid for these houses myself. Each house has a solar water heater, a full bathroom with a shower and a flush toilet. I also provide water and electricity, and proper sewerage. On top of this I am the service provider and maintenance man – the local municipality doesn’t even answer the phone, never mind deliver service.
“If on a Sunday morning there is a shortage of water because someone left the tap on, or for some other reason, I cancel my church visit and immediately commence pumping water so that my workers can have water within an hour. In contrast to this, the neighbouring town has been without running water for two weeks! The sewage situation there is not much better, considering the stench emanating from that part of the world. It is so bad that my workers prefer to stay at their “terrible” boss’s farm for their times off rather than go into town.
“In winter each house is warm because of the Fire World stove which I’ve provided to keep the residents warm in the cold Free State winter. My tractor is always ready to assist my workers to collect as much wood as they need for the stove.
“Every morning each worker receives two litres of fresh milk for his family. (If he buys this in town it will cost him around R450 a month). The local taxi driver asks R800 per month to drive my workers’ children to school – I do this for nothing. I do most of my worker’s grocery shopping for them in town, including the batteries for the stand-alone TV’s which I bought for them and installed in each house. I take sick people who don’t even work for me to the doctor in town. My wife acts as midwife for new births in the middle of the night because there’s no ambulance. I stand in a queue at the bank to pay maintenance on behalf of my workers. I supply the corn for the workers’ chickens, and then there’s the free biltong which I give to each house every year, fruit from the orchard and medicine when they are sick.
“I recently invited an inspector from the Department of Labour to tally up the full cost of what each worker receives in cash and in kind, and this came to more than R2 000 per month. And this doesn’t include the building and maintenance of their houses.
“No one is forced to work for this “terrible” farmer. They work for me because they know the total packet is a better alternative than what they would receive in town. This is their choice. And ask them if their employer in town will unblock their toilet before church on a Sunday morning!”
(Van Schalkwyk says that the minimum wage of R105 per day will increase his yearly expenses by R84 000. At the same time he must absorb a lower price for lamb at R14 per kg less than a year ago. For 800 lambs that is a decrease of R400 000 per year, while his wage account increases by R84,000 with the new minimum wage! What must he do? Only one solution – he must retrench his workers!)
This rural South African reality is so far removed from the talkers in government that something will have to give. In effect, however, the farmers have the power. They produce the food the ANC can’t, and they provide the jobs for thousands of unskilled people who cannot find employment under an ANC government. In the end, the commercial farmer will decide the future of agriculture in South Africa. We believe the talkers know this only too well!
TAU SA has expressed its deepest concern to the Constitutional Court's ruling on the mineral rights.
Despite the word play which the Constitutional Court apparently used to determine weather mineral rights were expropriated or not, the practical reality is that landowners lost their mineral rights and that the State acquired that right and is now handing it out left, right and centre. Farmers now have the problem that prospectors simply arrive on their land and start prospecting.
The Constitutional Court also determined that property owners are not entitled to compensation. TAU SA’s President, Mr. Louis Meintjes, said that this could create a dangerous precedent. "The fact is that landowners have lost their ownership of mineral rights without receiving compensation. This judgement could give legislators the impression that they can create or change other laws so that any kind of property can be taken away without compensation. While a new Expropriation Act is under discussion we are highly concerned about this ruling," said Mr Meintjes. "It will have definitely a very adverse impact on investor confidence."
"Where the Constitutional Court has to test any legislation to the country's Constitution it can be accepted that the Constitution in fact provides for the disposition of property without or inadequate consideration.
"The Constitution asserts that it is in line with international law. It may have now become necessary that the South African Constitution should be evaluated internationally to determine whether it is the case,” said Mr Meintjes.
During the NERSA public hearings, TAU SA raised its voice in sympathy with the vast majority who opposed the proposed Eskom tariff increases. In a written submission to NERSA, the union expressed its concern about expenditures of millions to establish the role of Eskom in society whilst the organisation has no competitors. Furthermore, independent media reports indicated that Eskom’s salary packages were very high. It is also unexplainable why Eskom applies the tariff increases to all the components, and not only energy, which are reflected on the client’s monthly account.
Although the tariff increase was restricted to 8%, in Rand and Cents terms it represents a considerable increase in a farmers’ monthly expense account. The fact that farmers, producers of food, are price takers who are not able to recover rises in input costs because they depend on market prices for their produce, creates an untenable situation when not only Eskom tariff increases, but also higher wages for farm workers, fuel prices, toll fees and probably higher municipal rates and tariffs are considered. This in no small way affects the profitability and sustainability of commercial agriculture which impacts not only on food production, but which can also result in unemployment and growing poverty in rural areas.
“If government is not going to consider ways and means to support the producers, the South African population is indeed facing a bleak future”, said Mr Louis Meintjes, President of TAU SA
The latest increase in the price of diesel by 56 cents per liter and that of petrol by 81 cents per liter is bad news for the agricultural community.
Today the excessive increase in minimum wages in the agricultural sector comes in operation, Nersa yesterday announced an eight per cent increase in electricity tariffs, and now this increase. Further more the existing toll tariffs are due to increase next week, while the Finance Minister announced a further 23 cents per liter fuel levies during his Budget speech, which will come in operation next month.
The decreasing value of the Rand could result in another fuel hike next month.
"Essentially, all these increases include an increase in tax revenue from which the State benefits," said Mr Louis Meintjes, TAU SA President. "On the other hand, farmers remain price takers, which means that they cannot recover higher input costs and taxes. The farmer is expected only to pay and to keep on producing. For some time now organized agriculture has pleaded for a change in the diesel rebate so that farmers could remain profitable on their farms in the interest of food security. Those reasonable requests were simply ignored," said Mr Meintjes.
"The government should take note that if they are not prepared to accommodate reasonable requests by farmers regarding total package of additional increases and taxes, it could have disastrous consequences for the country's food security and agricultural economy," warns Mr Meintjes.
TAU SA understands the fact that the Minister of Finance did not have much room to move in his annual budget.
However, TAU SA is most concerned about the increase in the public debt. If government would curb State theft it would not be necessary to borrow money. Government intends to give out more than it budgets for in revenue. This spending of more money than then income is becoming a pattern. This money will probably be acquired through loans. Loans must be repaid and the more that is borrowed the more difficult it will be to pay it back.
The labor unrest at Marikana and the Western Cape has caused the decline of foreign investments in the mining sector and investors are starting to withdraw. Agriculture is busy reorganizing. The higher wages in these two industries is more than likely to cost the country a loss of 300 000 - 500 000 jobs. This would mean that government’s expected growth rate will be difficult to achieve and making debt repayment even more difficult.
Too little savings measures have been announced for government itself. While the so-called rich are once again targeted for their hard work and productivity, it seems if government can proceed with its exorbitant expenditure.
We should not pat ourselves on the shoulder that our public debt will be just 38.6% of GDP. This figure does not include the billions of municipal debt.
Government is making the country less competitive by its policies. The newly announced agricultural wage increases will contribute to make the country dependent on food imports. Marikana and the State's inability to handle the situation will result in many South African mines becoming non-profitable and the impact will be reflected in a weaker Rand due less exports, less tax money to fund governmental expenditure and a massive increase in unemployment.
The cost of doing business in the country becomes too high due to, amongst others, Eskom, whose costs are out of control. The budget speech would have been the perfect opportunity to announce that Eskom is to be privatized so that lower costs could benefit the national economy. The high cost of Eskom services is starting to threaten food security.
TAU SA is of the opinion that the increase in fuel levies will be an economic damper, and especially the agricultural sector will hit hard. Where the low value of the rand and the high oil price has led to record high fuel prices, the extra 23 cents to fuel levies are inappropriate at this point in time.
The amount of tax actually paid by taxpayers is not really reflected in the budget. If informal tax would also be taken into account, taxes will have a drastically negative impact on economic growth.
The inability of the State, as practical experience has confirmed, to govern effectively and to combat corruption and crime is not reflected in the budget. The more important question is whether government can deliver.
The expansion of social grants is not sustainable in the long term. Due to ANC policy social grants are ever increasing while job opportunities are reduced. To rectify this situation it should have been expected that the Government would reduce and slacken labor regulations.
"South Africa needs economic stability and cannot afford any financial experiments. Agriculture can make a significant contribution to ensure a high degree of economic stability as long as the sector is not utilised a guinea pig for failing political goals, "said Mr Louis Meintjes, TAU SA’s President.