Policy Brief

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Jul 2, 2009 - Zuma presented this reshuffling as a sign that his administration will embark on a re-energised initiative for rural development, in line with.

Policy Brief

July 2009

Policy Brief

A fresh start for rural development and agrarian reform?

Ruth Hall

Abstract

1. Introduction

The new cabinet ushered in after

When

the 2009 national elections features

announced his new cabinet on 10 May

new and renamed ministries. Those

2009, he ushered in a new era for

expected to take the lead in a new

the state’s apparatus charged with

initiative to resuscitate the rural

responding to rural poverty: political

economy are the Ministry of Rural

and bureaucratic responsibilities for

Development

Reform

land reform, fisheries, forestry and

and the Ministry of Agriculture,

agricultural development have been

Forestry and Fisheries. While the

reshuffled, and are now clustered

newfound

into an array of new and renamed

and

Land

priority

placed

on

President

Jacob

Zuma

rural development is welcome, its

ministries and departments.

separation from the dynamic sub-

Zuma presented this reshuffling as

sectors in the rural economy is not.

a sign that his administration will

This brief shows how existing policies

embark on a re-energised initiative

are bifurcated between BEE models

for rural development, in line with

for the better off and welfare for

the ANC’s manifesto for the 2009

the poor. There is now a danger that

national elections which featured

the two ministries will replicate the

‘rural development, food security

dualism of the so-called ‘first’ and

and land reform’ as one of its top five

‘second’ economies – an approach

priorities.

that deepens exclusion from and

This signals a new commitment from

legitimises

the

a party that has historically relied on

economic core, and prevents the

an urban support base of the working

creation of a ‘missing middle’ of

class

successful small producers. What is

de-emphasised, if not quite ignored,

needed instead is rural development

the spatial legacy of apartheid and

that

the concentration of poverty in the

exploitation

restructures

sectors

of

the

in

commercial

agriculture,

forestry

and

unemployed

and

has

rural areas.

and fisheries, and the exploitative class relations (with workers and small producers) on which they are based, and which breaks down the concentration of capital and market power in few hands. Only then can redistributing

land,

forests

and

fishing quotas create new pathways

PLAAS

Institute for Poverty, Land and Agrarian Studies

School of Government, UWC

for ‘the rural poor’ to participate, and produce, in these sectors in ways that

2. Mix-and-match ministries For the future of the rural areas, the most significant changes in the new cabinet are the separation of land and agriculture, and the introduction of rural development as a ministerial mandate.

create livelihoods and jobs, and set

Responsibilities for land reform and

South Africa on a different and more

for agriculture have always been

appropriate growth path.

held by separate departments. But

1

Policy Brief

July 2009

for the past 13 years these have been

and People with Disability – what one

redistributed land and in the former

joined in one ministry – of Agriculture

might term ‘the ministry for nearly

Bantustans, whose type and scale of

and Land Affairs – headed by Derek

everyone’ – has been established

farming, and therefore whose needs,

Hanekom from 1996 to 1999, by Thoko

to deal with these groups who

might differ substantially. In this view,

Didiza from 1999 to 2006, and by Lulu

predominate among the poor in

the main virtue of this new cabinet

Xingwana from 2006 until the 2009

both urban and rural areas. How all

arrangement is that it ensures that

national elections.

of these institutions and mandates

land reform happens at the margins of

can be harnessed to respond to

mainstream commercial agriculture.

Now, the new-look cabinet places these

responsibilities

ministries:

a

in

Ministry

Development

and

separate of

Land

Rural Reform

(MRDLR) on the one hand, and a Ministry of Agriculture, Forestry and Fisheries (MAFF) on the other. Both are to be headed by former MECs for

rural poverty, unemployment and underdevelopment

remains

very

unclear – but it is likely that the Ministry for Rural Development and Land Reform will need to take the lead in providing some overarching coherence.

On the other hand, the new cabinet has drawn a more critical response from rural people’s organisations and lobby groups. Their main objection is that the core problem facing land reform has not only been its slow pace – just five per cent of commercial

Agriculture: Gugile Nkwinti from the

Are all of these new institutional

farmland has been redistributed in

Eastern Cape, and the Northern Cape’s

arrangements an apt response to the

the past 15 years – but the extremely

Tina Joemat-Pettersson, respectively.

seemingly intractable problems of

poor level of support for new, small

rural underdevelopment and economic

and cash-strapped farmers who have

exclusion?

been settled on this land. Agriculture,

But key decisions about government’s plans for the rural areas are likely to be taken elsewhere. At the heart of the new administration’s thinking on the future of the economy is a heavyweight triumvirate made up of the National Treasury headed by Pravin Gordhan, a Ministry of Economic Development under former unionist Ebrahim Patel, and a National Planning Commission in the Presidency led by Trevor Manuel. It is widely expected that they will tussle not only over state purse strings, but also the central questions of where in the economy to invest, whether

they insist, should be integrated

3. Separating Land Reform from Agriculture Separating

responsibility

with land reform and should be at the

heart

of

rural

development.

Separating agriculture from both rural for

agriculture and land reform into separate ministries is a surprising move, apparently at odds with the ANC’s manifesto promise to ‘ensure a much stronger link between land and agrarian reform programmes’ (ANC, 2009:9).

development and land reform, then, is to move in the wrong direction. Yet if one considers the track record of the past decade or so, responsibilities for agriculture and land reform have never been effectively integrated, despite being in the same ministry since 1996. None of the three ministers of Agriculture and Land Affairs were able

the rural areas can become a source

There is disagreement on whether it is

to solve this problem while they were

of jobs and growth, and therefore

a good thing or not.

responsible for both departments.

whether or not to retain existing

The separation of the two has been

And land reform has been crippled as

approaches to industrial policy and

welcomed by some in the agricultural

a result.

spatial development.

establishment who, pointing to dips

The blame for the dismal track record

A

to

in output on redistributed farms, see

of production on redistributed farms

the ministries will affect the rural

land reform as a threat to commercial

must fall largely on the national and

areas. Water Affairs and Forestry

farming, which they wish to see

provincial departments of agriculture,

becomes Water and Environment.

insulated from the reform process.

which have simply failed to come to

Environmental Affairs and Tourism

In this view, there are two types

the party. Despite the introduction of

becomes simply Tourism. Provincial

of

and

some agricultural support and funds

and

becomes

subsistence – and the agriculture

for land reform beneficiaries in recent

and

department should be freed up to

years, the agriculture departments

new

focus on commercial farming, rather

have remained biased in favour of

Ministry for Women, Youth, Children

than the new and poorer farmers on

commercial farming and unsupportive

number

Local

Cooperative Traditional

of

other

changes

Government Governance Affairs.

And

a

agriculture



commercial

2

Policy Brief

July 2009 the

partnerships (often with the previous

agribusinesses and supermarkets, as

production systems of the poor. Less

owners) through long-term leases or

well as the oligopolistic agro-food

than 1 in 20 land reform beneficiaries

joint ventures to ensure continuity

processors and manufacturers that

have benefited at all from either

of production. But this also involves

have been able to fix prices and raise

Comprehensive Agricultural Support

continuity in other areas: while having

food costs.

Programme (CASP) grants or Micro

a stake in commercial farms, claimants

Agricultural Finance Institutions of

remain in overcrowded conditions in

South Africa (MAFISA) loans. And land

communal areas, reliant on uncertain

alone does not produce livelihoods or

future dividend payments, and usually

development.

no new jobs are created.

The notion of a need for ‘integration’

At the other end of the spectrum,

overriding trends towards capital-

of

the demand for land and farming

intensive

though, fails to capture the scale of the

opportunities

poor,

challenge. It elides the fundamentally

and consolidation of both land and

compounded by the sharp increase in

political tension between promoting

agricultural capital in fewer hands –

food prices over the past 18 months,

business-as-usual

the

trends that are antithetical to rural

has spawned initiatives to support

productive sectors of the economy

development. And neither approach

food production by the poor, often in

(agriculture,

fisheries)

tackles the really contentious work of

the form of ‘starter packs’ of seed and

and restructuring them through a

restructuring the ‘core economy’ in

implements. This response, driven by

thoroughgoing redistribution of assets

recognition that its dynamics generate

provincial departments of agriculture,

and wealth.

poverty and exclusion.

can be characterised as food security

of

smallholder

land

farming

reform

with

and

agriculture,

growth

forestry,

in

by

the

scale – an approach reiterated in the ANC’s manifesto in which it commits

Land and agriculture have been caught up in the contradictions of government programmes that address the problem

with the worst excesses of rural hunger and to deracialise commercial farming (and farmers). But so far, redistributive measures seem peripheral to the

through self-provisioning on a micro

4. Dualism and the ‘missing middle’

It is, of course, important both to deal

to expand food production among the poor, including community schemes to produce food ‘in schools, health

farming,

job

shedding,

Between these poles of food security gardens and big commercial farms is a missing middle: the untapped potential

for

smallholder

farmers

who want to produce for their own consumption

and

for

a

market.

of ‘dualism’ by dealing with each of the

facilities, churches and urban and

Existing approaches have failed to

so-called ‘two economies’ separately.

traditional

create opportunities for such people.

They have fallen victim to this way of

2009:11).

thinking, and have perpetuated it.

Addressing direct consumption needs

As a result, state policy has become

is an important and overdue response

bifurcated in recent years. On the one

to poverty and hunger but, while

hand, transformation of commercial

it is likely to have popular appeal, it

agriculture is now largely pursued

is ultimately limited. First, without

through

strategic

redistributing land and water for

economic

agriculture, ‘own production’ by the

joint

partnerships

ventures,

and

black

authority

areas’

(ANC,

And the most likely candidates – the approximately 4 million ‘semisubsistence’ and 200 000 small- and medium-scale producers – are in the communal areas of the former Bantustans, which have attracted the least agricultural (and infrastructural) support and investment. A serious approach to food security would

deals

that

poor via starter packs, particularly

but

leave

in urban areas, is unlikely to be at

production

and

the scale required to be a workable

– and ultimately the

solution to food insecurity. Second,

impact on the economy – largely

the poor are to produce – but at the

unchanged.

most

margins rather than in the commercial

evident where land claims on high-

farming heartland. In no way will this

value farmland have been settled,

change who profits from producing

This

increasingly with the proviso that

and selling food, or pose a challenge

assumptions

the claimants neither live on nor

to the large players who dominate

‘development’ that underpin many

farm

the market: the big farmers, the

past government policies, and a bias

empowerment deracialise patterns

ownership of

employment

their

(BEE)

This

land,

has

but

been

enter

into

enable them to produce and market on non-exploitative terms, to bypass (or transform) the mass retail markets in which just four large supermarkets dominate, and to benefit from rising food prices. bifurcation in

emerges conceptions

from of

3

Policy Brief which (and

July 2009 equates

commercialisation

industrialised

production

at

scale) with development – even when this aggravates patterns of economic exclusion. The dualistic thinking that results is evident also in other sectors of the economy on which rural people depend. Look at fisheries, forestry and

the ability to process and sell their

focused on ‘commercialisation’, often

own harvests, are unaffected by the

as part of ambitious (and risky) joint

provision of rights to the poor.

ventures for the production of cash

In the forestry sector, the centrepiece of

transformation

has

been

the

creation of a BEE sector charter, still in the early stages of implementation,

crops like cotton and tobacco which have tended to land marginal farmers in stifling debt. Small to medium producers aiming to produce at a

which aims to force the small handful

level beyond household subsistence

of dominant market players to bring

have been stymied by a ceiling on

In fisheries, the allocation of quotas

black partners on board. So far this has

allocations for subsistence (so-called

has

companies.

brought little benefit either to workers

‘Schedule One’) water use.

Transformation policies have focused

or people living on or near private

Put simply, many of these policies

on increasing BEE shareholding within

and state forests. ‘Empowerment’ in

have aimed to deracialise the ‘first

these, which has been done with

the sector has mostly taken the form

economy’ without transforming it,

some success, as well as allocations of

either of narrow BEE shareholding or

and so entrench the class relations

smaller quotas to black entrepreneurs

externalising risk through converting

that

who, because these were insufficient,

employment

on

estates

marginality – which gets called the

tended to sell these ‘paper quotas’ on

into

insecure)

contracting

‘second economy’. Little attention

to the larger companies. Litigation in

arrangements.

unbundling

has been given to dismantling the

2007 against unfair quotas successfully

of state forests has promoted the

divides between the two and so those

prompted a new focus on small-scale

growth of large companies with BEE

eking out survival on the margins are

or ‘artisanal’ fishers in poor coastal

shareholding,

to

prevented from filling the ‘missing

communities,

allocations

transfer smaller state plantations in

middle’. The stark contrast between

have since been increased. Yet both

communal areas to rural communities

wealth

the quota system and the inability

to be cultivated as ‘woodlots’ are yet to

president Thabo Mbeki once described

to

vessels

be implemented. The one area where

as two economies has in many respects

financial

production by the poor is on the rise

been made even starker by the very

constraints, and also to some extent

is through outgrower schemes where

policies his government pursued. Will

business skills, prevent these small

they produce for and sell to the large

Zuma’s government continue on this

fishers from expanding their scale of

companies like Sappi and Mondi.

path?

extraction, and limit them to fishing at

With regards to water, reforms to

Back to his new cabinet, then: the

a lower level and delivering what they

separate the ownership of land from

imminent danger is that MAFF will

catch to the established companies for

the ownership of water rights is

focus on these productive sectors

processing. So while reallocation of

yet to be fully thought through or

with a view to stimulating ‘business-

quotas has made some contribution

implemented, and so large farmers

as-usual’ growth, both to respond to

to alleviating poverty, it has only

and agro-industries (as well as mines)

local demand and to develop export

aimed to enable the most marginal

continue to dominate the use of scarce

markets, while MRDLR is saddled with

to subsist and, as in agriculture, the

water resources in rural areas. Once

addressing

real money is made in downstream

trading in water rights gets underway,

reshaping these key sectors in which

activities

water, for instance.

and

favoured

secure

larger

whose

larger

equipment

like

fishing

due

to

processing

(often

timber The

while

provisions

produce

and

exploitation

poverty

rural

that

poverty,

and

former

without

and

as provided for in the Water Act, it is

the poor participate, often in marginal

marketing, where ownership remains

expected that commercial interests

ways – in other words, that the two

highly concentrated. The structure of

– both agricultural and mining –

ministries replicate the dualism of the

the sector is intact: the (deracialising)

will buy up these rights from poor

so-called ‘first’ and ‘second’ economies.

top-end of fishing companies and

communities. Meanwhile, important

MAFF will deal with ‘wealth’ and

processors still dominate the market

initiatives to rehabilitate irrigation in

‘growth’

and, as long as fishing communities

the former Bantustans – such as the

forestry and fisheries while MRDLR will

are prevented from scaling up to

Revitalisation of Smallholder Irrigation

deal with the former Bantustans. This

become independent operators with

Schemes (RESIS) in Limpopo – have

division of labour must be avoided.

for

commercial

farming,

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Policy Brief

July 2009

5. Rethinking rural development What is needed now is fresh thinking about the future of rural South Africa and a vision which confronts the stillstark divides within the commercial farming heartland of former ‘white RSA’, as well as between it and the ‘Bantustans’ – and aims to transform

with rural development (as well as

The ‘Rural Cluster’ must promote and

land reform) will have to deal with

invest in:

logistical and institutional problems in

• Redistribution of land and water

defining its remit – and it will have to

rights in areas of high demand and

confront the potential for duplication

regions close to urban markets;

with the tasks of other line ministries as it focuses on rural (and agricultural)

• Irrigation

for

horticulture,

land reform, rural job creation, rural

small-scale

including

through

the creation of infrastructure for

infrastructure, rural housing, rural

rainwater harvesting;

both of them. The core challenge

transport, rural education, rural health,

is to enable large numbers of the

and so on. There is no coherent policy

rural poor to participate in economic

to frame rural development, and

activities – to produce, process and

there will inevitably be confusion as

• Fencing for smallholder farmers

market – on beneficial terms in order

this new ministry attempts to delimit

in communal areas, as well as in

to

a coherent boundary to its work and

transport and sorting, packing and

rural

establish sensible and cooperative

storage infrastructure;

poor, not only welfare. This would

relations with other line departments.

enable

employment

self-employment)

for

(including the

reduce rural poverty and create new livelihoods and jobs, but also set South Africa on a different and more appropriate growth path. Taking charge of such an ambitious and all-encompassing plan for the rural areas must be a new ‘Rural Cluster’ that includes the two ministries but also the economic powerhouse of government:

• Agricultural cooperatives for input supply, processing and marketing;

• Fresh produce markets in towns and villages as outlets for producers

Top priority therefore is for a collabo-

of small surpluses of fruit and

rative initiative to develop overarch-

vegetables;

ing rural development policy, which was lacking under the previous admin-

• Affordable, subsidised interest rates

istration, and to place the dynamic

for credit from, and competent

sub-sectors of real wealth in the rural

management in, the Land Bank.

economy at its centre.

These

will

require

support

for

subdivision of larger properties to

the National Planning Commission.

6. What are the policy alternatives?

Unless this happens, MRDLR will be

Core to rural development will be the

relegated to junior status within the

redistribution of both land and water

cabinet

for agriculture, to make possible

to

the

from

particularly in sectors that provide

employment and self-employment, in

highly seasonal patterns of income

particular, and promoting low-input,

and labour demand, and perhaps

small-scale

of

most importantly, a combination of

food for consumption and sale. The

regulation and incentives to counter

The central position that rural develop-

greatest potential for small farmers of

the monopolistic character of food

ment now occupies in the thinking

fresh produce is in the high-potential

of government draws attention to

regions of KwaZulu-Natal, Limpopo,

Interventions such as these have the

Mpumalanga and the Western Cape,

potential to support food production

in particular.

by the poor (facilitating household

Treasury, Economic Development, and

and

within

government’s

agenda; it will be expected to achieve the impossible and will be little more than a latter day Department of Native Affairs, brought back from the apartheid past.

the multidimensional nature of rural people’s livelihoods – a recognition that land reform cannot be entirely

expansion

of

primary

incomes

production

make

possible

smallholder

units,

revamping of agricultural extension services, the resuscitation of targeted subsidies for inputs and implements, public

support

extend

for

into

smallholders value-adding,

processing and marketing.

food security) and at the same time

about agriculture, that people want

Practical interventions are needed to

and need land for a variety of purposes,

support smaller farmers as well as the

engage in ‘accumulation from below’.

and that rural people participate in a

emergence of a ‘missing middle’ of

Poverty reduction and kick-starting

variety of economic activities for their

producers able to market their surplus

a new rural growth path must be

survival. But the new ministry charged

in local – or even national – markets.

compatible, not ‘either-or’ options.

promote rural entrepreneurs who can

5

Policy Brief

July 2009

7. Conclusion The dynamics (and class relations) that produce wealth for some produce poverty and exclusion for others. But this does not mean that we should have policies for the rich and policies for the poor, ministries for the rich

Economy Strategy produced in early

Thanks to Andries du Toit, Barbara

2009, which emphasises the need for

Tapela, Moenieba Isaacs, Ben Cousins,

employment creation ‘from below’

Mafaniso Hara and Karin Kleinbooi

in the rural areas, including through

for comments and suggestions on this

micro-enterprise and self-employment

paper.

in

smallholder

agriculture

and

cooperatives.

and ministries for the poor. High-

The new political priority placed

level coordination will be needed to

on rural development is a great

ensure that the new ministries build

opportunity and new approaches are

an

people’s

urgently needed. Rural development

rights to natural resources, which is

must not be limited to ad hoc and

equitable

regime

of

a precondition for emergence and survival (let alone success) of smalland medium-scale farmers who can and want to produce for themselves and for a market.

localised ‘projects’. A new policy framework must set out an ambitious agenda for structural change in the key rural economic sectors. It must change the ways in which the poor

South Africa has been described as

participate in, own, control, use, and

having ‘two economies’, but it is more

produce in the rural economy, and

accurate to characterise it as having one integrated economy that is unequal, fragmented and segmented.

find new pathways of production and

New

accumulation.

‘Another

The implications are now starting

Ruth Hall is a senior researcher at

to be seriously explored. Breaking

the Institute for Poverty, Land and

this cycle of economic exclusion is

Agrarian

the focus of the Presidency’s Second

University of the Western Cape.

PLAAS

Institute for Poverty, Land and Agrarian Studies

School of Government, UWC

Studies

(PLAAS)

at

the

book

from

PLAAS:

Countryside:

Policy

Options for Land and Agrarian Reform edited

in by

South

Ruth

Hall

Africa’ can

be

ordered from www.plaas.org.za

Selected references Cousins, Ben. 2007. ‘Agrarian reform and the “two economies”: transforming South Africa’s countryside’ in Lungisile Ntsebeza and Ruth Hall (eds) The Land Question in South Africa: The Challenge of Transformation and Redistribution.

PLAAS engages in research, policy support, post-graduate teaching, training and advisory and evaluation

Cape Town: Human Sciences Research Council: 220–245. Hall, Ruth (ed.). 2009. Another Countryside? Policy Options for Land and Agrarian

services in relation to land and

Reform in South Africa. Cape Town: Institute for Poverty, Land and Agrarian

agrarian reform, community-based

Studies, University of the Western Cape.

natural resource management and rural development.

Isaacs, Moenieba, Mafaniso Hara and Jesper Raakjaer. 2007. ‘Has reforming South Africa’s fisheries contributed to wealth redistribution and poverty alleviation?’ in Ocean and Coastal Management, No. 50: 301–313.

School of Government,

Second Economy Strategy Project. 2009. Second economy strategy: Addressing

University of the Western Cape

inequality and economic marginalisation. A strategic framework. January 2009.

Private Bag X17, Bellville 7535,

The Presidency and Trade and Industry Policy Strategies (TIPS).

Cape Town, South Africa

Tapela, Barbara N. 2008. ‘Livelihoods in the wake of agricultural commercialization

Tel: +27 21 959 3733;

in South Africa’s poverty nodes: insights from small-scale irrigation schemes in

Fax: +27 21 959 3732

Limpopo Province’ in Development Southern Africa, Vol. 25, No. 2. Special issue:

[email protected] www.plaas.org.za

Living on the Margins. June 2008: 181–198.

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