Jaco Minnaar, the president of Agri SA, which represents commercial farmers, says farmers are quitting agriculture because of policy uncertainty around property rights, land ownership and expropriation without compensation.
According to a recent study at Stellenbosch University, 20% of the country’s most experienced and qualified farmers are planning to quit.
“A reason we’re losing these farmers is the policy uncertainty we have in South Africa,” says Minnaar, 45, an agricultural engineer who farms in the Free State.
“There is so much policy uncertainty that you don’t get long-term investment in agriculture. What we need to understand is that agriculture is a long-term investment environment. You don’t invest for one or two years, you invest for 10 or 15 years.
“To invest in the long term you need to be sure about your investment. We’ve seen in the figures that policy uncertainty has hampered investment in agriculture in South Africa.”
This, together with dysfunctional infrastructure, has contributed to a lack of global competitiveness. Local farmers are competing against the rest of the world and need to employ the newest and best technology, which is extremely capital intensive.
“This is an imperative. We don’t have the best environment. A lot of our competitors have much better environments.”
But while expensive technology can make farming operations more efficient, what happens outside the farm is largely outside the farmer’s control, he says.
“You need an enabling environment from the government side to support more efficient production.”
The moment you lose your road and rail infrastructure and you lose your ports you lose your competitive advantage towards the rest of the world.
This is something South African farmers, unlike their global competitors, don’t have. And the whole country suffers.
The agriculture sector as a whole contributes 14% to GDP, but with a more conducive environment this could increase, Minnaar says.
“We’ve seen in the last four or five years that agriculture is actually carrying this country, but it’s carrying the country in terms of exports. The moment you lose your road and rail infrastructure and you lose your ports you lose your competitive advantage towards the rest of the world.
“This is going to be a major concern for us for the next five-10 years. How is our infrastructure going to be built up again so we can use it to export and get competitive advantage for South Africa?
“We’re not going to be globally competitive for much longer unless these infrastructure problems are dealt with.”
A recent study by Trade Research Advisory in association with North West University shows that R350bn in potential agrifood exports to the EU is going begging.
The inability of local farmers to export the right amounts into the right markets at the right time is “a probable cause of this”, says Minnaar.
“It’s a specific time slot we have to utilise to get our best prices and be most profitable,” he says.
“Especially for fruit, when you pitch in the market and where you pitch is very, very important. Most of the time we’re not managing to compete with other countries in the same time slot.”
Because of unreliable, broken or dysfunctional infrastructure such as roads and ports, South African farmers often miss this ideal time slot, after which there is too much supply, prices drop and they can’t compete.
Labour laws also jeopardise the global competitiveness of local farmers, he says. “The amount of protection our labour has got in terms of the labour laws makes it very difficult for the general farmer to employ seasonal workers.”
Lack of clarity around water rights is also not helping.
“There’s not enough water to expand our agricultural productivity to such an extent that we can fill that R350bn gap in the EU market.”
A sudden change in government policy has made it illegal to transfer water usage rights between farmers, which is being challenged in the Constitutional Court in August.
“This is a right farmers have, which they’ve paid for, but can’t transfer or sell.”
He suspects the government is using water rights to drive transformation, “but with them blocking the transfer of water rights even the developing farmer who wants to buy water rights from any other farmer, black or white, can’t get the right transferred into his name either”.
The biggest obstacle to transformation in the sector, he says, is the government’s failure to give developing farmers property rights.
Two weeks ago, the agriculture sector signed the Agriculture & Agro-Processing Master Plan, a government-private sector initiative begun in 2019 to address growth in the sector.
Infrastructure, its maintenance and development, is one of the pillars of the master plan, Minnaar says.
“It's very much part of the plan, but the test will be implementation. The problem we have with government is implementation. The capacity within government is not very good.”
The agri sector has been holding biweekly meetings with the Transnet port authority to address specific issues and is encouraged by the possibility of allowing the private sector to develop parts of the harbours to help with exports.
Although roads are in the master plan, Agri SA has been trying to “reach out” to the department of transport for three-four years “to no avail”, says Minnaar. Meanwhile, some roads farmers depend on have become unusable.
“At least now we’ve got it on paper, so the government knows what it needs to do. And because it’s in the master plan we as the private sector can now put pressure on them to deliver on what they’ve committed to.”
How much political clout does Agri SA have?
“It’s not just Agri SA, it’s a sector master plan and we’ve all signed it. So as the private sector I think we’re in a stronger position to hold the government accountable. Government is desperate to get something right now, so they will try to focus on the low-hanging fruit to get at least something in terms of this master plan right.
“We certainly don’t live in the illusion that tomorrow everything is going to be right, but I think there might be some movement, some things we can see that are getting better.”
