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AGRICULTURAL POLICIES AND ITS IMPLICATIONS TO RURAL DEVELOPMENT

DR M.E MOGAJANE

DEPARTMENT OF AGRICULTURE FORESTRY AND FISHERIES

PRIVATE BAG X250

PRETORIA

SOUTH AFRICA

DDGPRM@DAFF.GOV.ZA

DEPUTY DIRE

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“Abstract”

South African history of apartheid and colonization has determined the shape of South

African economy. For more than a century, the growth path was defined by extracting

minerals, selling them on the world market and using the proceeds to fund a high

standard of living for a small minority of the population. (treasury, 2010) The South

African agricultural policies still faces the dual challenge of addressing the imbalances

and injustices domestically, but also faced with the challenge of ensuring efficient global

competitiveness. Over the past 15 years, far-reaching agricultural policy reforms and

support instruments have been introduced into the sector affecting both its structure and

performance. These measures have attempted to improve the efficiency of the

commercial sector, while addressing the structural inequality that characterizes South

African agriculture. The widespread domestic and international market liberalization,

introduced in the early 1990s, has had a strong, catalytic effect on commercial

agricultural production. Attempts to deracialize the sector via land and labour market

reform have been less successful – the agricultural economy continues to wrestle with

entrenched inequalities and rising unemployment. The government of South Africa has

good policy frameworks but the challenge lies in their implementation. More importantly

is the disjointed implementation of government strategies. Cooperative governance

requires effective management across all three spheres of government, sector

organizations, and farmers. Without an integrated approach and effective management

of actions, roles and responsibilities, most strategies devised by Agriculture resulted in

ineffective implementation. The scenario current data sketches is that despite field crop

production increasing by 13 %, horticultural production by 62 %, and livestock production by 29

%, for between 1990 to 2008/09, staple food production is currently lower than consumption

requirements. Thus the Government of South still has to do more in support of small scale and

subsistence farmers. The case study presented here reflects the experiences of South Africa

with regard to facilitating poultry production in the Limpopo province.

Mogajane M.E; Visser M and Mohlabi S; Department of Agriculture forestry and Fishery,

Pretoria, South Africa.

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INTRODUCTION

South Africa is characterized by high degrees of socio-economic inequalities which

exacerbate poverty levels, hunger, morbidity and mortality linked to racial socio-

economic differentials. Food insecurity is directly linked to poverty and poverty is directly

linked to income inequality. Poverty furthermore spreads along racial lines in South

Africa [with estimates indicating that 56% of black people are poor compared to 36% of

colored people, 15% of Indian people and 7% of white people] This is an indication that

on the 6 million households that are vulnerable to food insecurity the majority of the

number constitutes of the previously disadvantaged and over 72% of them resides in

rural areas of the country(Stats SA, 2009).

South Africa is part of the world economy. In recent years, emerging markets such as

Brazil, China and India have become leading and trading nations, with expanding

economies that are creating jobs and contributing to significantly lower levels of poverty.

According to the 2008 World Bank study, more than 80% of the poverty reduction that

has taken place over the past decade has occurred in the fast -growing economies.

South African Agriculture accounts for just 5% of total employment is South Africa,

absorbing a far lower share of labour supply than in other emerging markets and

developing countries where one in five work in Agriculture. In South Africa employment

in Agriculture has fallen by almost 45% since 1995. Production has lagged behind

economic growth, partly due to rising input costs; investment diversification from

agriculture by entrepreneurs especially from the white community and uncertainty

concerning land reform. Job creation has also been hindered by more capital intensive

growth and low agricultural labour intensity, which reflects the dominance of commercial

faming rather than small scale production of cash crops or subsistence agriculture.

(treasury, 2010)

The large-scale, commercial sector, is made up of an estimated 40,000 farming units,

which cover a production area of approximately 82 million hectares; and is responsible

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for more than 99% of South Africa’s marketed agricultural output (Stat SA, 2007;

Tregurtha and Vink, 2008; DAFF, 2009). An emerging or small-scale sector, in contrast,

consists of 1.3 million farming households, and has an estimated 14 million hectares of

agricultural land, concentrated principally in the former homeland areas of the country

(Tregurtha and Vink, 2008). The emerging or small-scale farmers, typically, have low

levels of farming technology investment; low levels of production efficiency, and engage

in agricultural production to supplement their household food requirements rather than

for cash and trade considerations

The dualistic nature of the agricultural sector in South Africa is a result of the previous

discriminatory laws and regulations. The small scale agricultural sector which is

predominately black is characterized by low productivity, lack of access to capital and

product markets, lack of access to market information and lack of production

infrastructure in rural areas.

Small scale producers are located in the more rural areas of the country and contribute

to the agricultural economy. The agricultural sector is structured in such a manner that

agro-processing facilities and cold storages are located in big cities. The separation

over long distances between primary production areas and processing facilities

contribute negatively on food prices, particulalry of small-sacle producers. Logistics and

transactions costs thus constitute a higher percenetage of the final retail price and thus

depressed farm-gate prices for the small-scale producer.

According to the National Agricultural Marketing Council report (NAMC) , the cost of the

food basket expressed as a share of the average monthly income of the poorest 30% of

the population increased from 28%in April 2008 to 33% in April 2009, while the cost of

the food basket expressed as a share of the average monthly income of the wealthiest

30% of the population only increased slightly from 2.2% to 2.6% over the same period.

(NAMC, May 2009)

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The total cost of support to the agricultural sector, measured as percentage of the GDP,

decreased from 1 % in 1995-1997 to 0.59 % in 2005-2007. This is considerably lower

than the average of 0.97 % for developed countries.

South Africa does not produce enough staple food to meet consumption demand.

Unfortunately, the country faces some real constraints in terms of its agricultural

potential, which is generally lower than that of many of its Southern Africa counterparts,

and therefore limiting any prospects for physical expansion. In addition, the smallholder

sector has missed out in terms of institutionalized and well-organized support services

and incentives that commercial agriculture has received for decades. The bad state or

non-existence of on-farm and off-farm infrastructure in the former homelands create a

disincentive for investment in agriculture in these areas. Any additional potential for

expansion of agricultural production will come from utilization of underutilized land is

some parts of the former homelands. This will require an enabling environment to be

created and incentives for farmers in the former homelands to put land into production

to be provided.

The main change in field crop production has been in the area planted, and in industry average

yields. The area of maize planting has declined by at least 40% (from 5 million hectares in 1980

to some 3 million hectares 2007) over the past three decades (Tregurtha & Vink, 2008).

Variations in crop production are largely derived from the variability in maize production, which

is in turn influenced by climatic conditions and producers’ willingness to plant maize (i.e.

whether it will be profitable) (NAMC, 2009).

Thus rural poverty should be seen as development challenge in South Africa.

Agriculture has long been viewed as an option for improving rural livelihoods, however it

should be remebred that not all rural dwellers are net food producers. Thus policies for

intervention should ensure linkages between primary production , agro-processing and

accessibility to markets. In addition rural areas should not only seek to address human

development and social justice, but be fully recognized and secure in their rightful place

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as key contributors to national and global economic development and environmental

sustainability.

FAO (2009) and Schultz (1978) argues that per capita agricultural output in developing

countries could only come about if farmers gained access to new and more productive means of

production” i.e. productive land, appropriate agricultural technologies, access to markets, and

the skills and support to exploit them”. Poor productivity in developing countries is not a function

technology can resolve alone. Comprehensive Farmer Support Packages are thus essential

in unblocking challenges faced.

Table 1; Population distribution according to the geographic type of each province Source:

Stats SA [GHS; 2007]

Estimated Number of Households Per Province Per Geography Type

Geography Type

Province Rural

Formal

Tribal

Area Urban Formal Urban Informal Total

Eastern Cape 12,411 159,214 108,748 26,717 307,090

Free State 17,822 12,606 100,557 20,629 151,614

Gauteng 16,850 0 482,573 67,902 567,325

Kwa-Zulu Natal 38,761 166,267 181,280 53,831 440,139

Mpumalanga 26,050 56,949 61,349 12,104 156,452

North West 21,992 87,564 74,597 11,599 195,753

Northern Cape 8,583 202 31,710 1,857 42,352

Limpopo 24,388 190,198 30,690 4,745 250,021

Western Cape 21,855 0 195,364 23,397 240,616

Total 188,713 673,000 1,266,868 222,781 2,351,361

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AGRICULTURAL POLICIES AND THEIR IMPLICATIONS ON RUR AL

DEVELOPMENT.

South Africa has undergone enormous economic, social and political change since the

beginning of democratization process in 1994. Important and wide ranging reforms

liberalizing domestic and foreign trade and lowering support to agriculture were

implemented in the 1990s. Policy changes that impacted on agriculture included

deregulation of the marketing of agricultural products; abolition of certain tax

concessions favouring the sector; reductions in budgetary expenditure on the sector;

land reform (restitution, redistribution and tenure reform); trade reform and new labour

legislation.

Over the past 15 years, far-reaching agricultural policy reforms and support instruments

have been introduced into the sector affecting both its structure and performance.

These measures have attempted to improve the efficiency of the commercial sector,

while addressing the structural inequality that characterizes South African agriculture.

The widespread domestic and international market liberalization, introduced in the early

1990s, has had a strong, catalytic effect on commercial agricultural production.

Attempts to deracialize the sector via land and labour market reform have been less

successful – the agricultural economy continues to wrestle with entrenched inequalities

and rising unemployment.

Agricultural reform continues with a series of measures to address past injustices

including land redistribution, agricultural support programmes to disadvantaged farming

communities and a broad based programme of economic empowerment of Black

people in the agricultural sector.

Policy interventions can affect the direction and rate of change in the performance of

any sector, and thus play a critical role in the performance of Agricultural Production. A

detailed evaluation of the implementation of South African policies is critical in the

assessment of, and planning of South Africa’s strategic interventions for improved

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agricultural production. The following agricultural policies have been identified as having

major implications, namely:

STRATEGIC POLICIES

Agricultural reform continues with a series of measures to address past injustices

including land redistribution, agricultural support programmes to disadvantaged farming

communities and a broad based programme of economic empowerment of Black

people in the agricultural sector.

Policy interventions can affect the direction and rate of change in the performance of

any sector, and thus play a critical role in the performance of Agricultural Production. A

detailed evaluation of the implementation of South African policies is critical in the

assessment of, and planning of South Africa’s strategic interventions for improved

agricultural production. The following agricultural policies have been identified as having

major implications

Within the context of government’s development agenda, Tregurtha and Vink (2008)

identify four main strategic policy documents that shaped South African agriculture, post

1994. These include the White Paper on Agricultural Policy, the Agricultural Policy in

South Africa Discussion document, the Strategic Plan for South African Agriculture,

“Sector Plan”, the Accelerated and Shared Growth Initiative for South Africa (ASGISA)

The Department of Agriculture Forestry and Fisheries (DAFF) Ministerial meeting in

August 2009 identified policies and their support programmes which impacted on

Agriculture and Rural development since 1994. Table 2 reflects the policy areas:

YEAR POLICY OR RPOGRAMME 1995 BATAT(Broadening access to agricultural

thrust. 1997 Deregulation of the Agricultural markets 1995 White paper on Agriculture 2001 Strategic plan for South African Agriculture 2002 Integrated food security programme 2004 Comprehensive agricultural support

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pogramme (CASP) 2006 Department of Agriculture and Department of

land affairs Leadership alignment process 2008 5 year Review of the sector plan 2010 Draft Agricultural Production strategy

1. BATAT

BATAT is a programme produced by the then Department of Agriculture in 1995. This

programme was the application of the Reconstruction and Development Programme

(RDP) within the Agricultural sector.

An analysis of the last 15 years Department of Agriculture Annual Reports and Budgets

reveals that initiatives of transformation are notably seated in the Broadening of Access

to Agriculture thrust (BATAT), developed as an initiative of Ministerial meeting and

recognised different roles played by National and provincial departments. BATAT

focussed on broadening access to those who lacked it previously, BATAT identified the

following key areas for intervention; financial services, human resource development,

technology development, delivery systems, marketing and agribusiness activities

The priorities in the implementation of the BATAT programme were to train farmers &

extension officers, institutional reform and information systems, design twinning of new

players with experience, facilitate exposure visits to smallholder farming outside SA and

implement a dedicated communication strategy.

In the review process it was recommended that National and provincial Departments of

Agriculture must develop the potential for small- and medium holder agriculture, bring

about market reorientation in this regard promote participatory research and technology

development, and improve the role of agriculture

2. The White Paper on Agricultural Policy and The A gricultural Policy in South Africa Discussion document;

The White Paper on Agriculture (1995) main policy objectives was to align the

agricultural sector with the principles and objectives of the then “Interim Constitution of

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the Republic of South Africa”, and to align the sector in achieving the objectives of the

Reconstruction and Development Programme (RDP) (DoA, 1998). The “White Paper”

also furthermore aimed to distinguish between national and provincial responsibilities

and its different role-players set a vision for the sector as: “A highly efficient and

economically viable market-directed farming sector, characterised 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 (Tregurtha & Vink, 2008)”.

This vision posed challenges to the sector concerning the managing of potentially

conflicting requirements by the different types farmers (i.e. commercial vs emerging vs

subsistent), and defining the different roles between provinces and national. To

accomplish this, the following critical agricultural policy goals were stated:

i. Developing a new order of economically viable, market-directed commercial farmers, with the family farm as the basis.

ii. The broadening of access to agriculture via land reform should be enhanced by adequate agricultural policy instruments, and supported by means of the provision of appropriate services.

iii. Financial systems should focus on the resource-poor and beginner farmers, enabling them to purchase land and agricultural inputs.

iv. Trade in and the marketing of agricultural products should reflect market tendencies.

v. Agricultural production should be based on the sustainable use of the natural agricultural and water resources.

vi. Developing agriculture's important role in the regional development of Southern Africa and other countries.

The task set by the department after the White Paper, was “to establish an environment

where opportunities for higher incomes and employment are created for resource-poor

farmers alongside a thriving commercial farming sector” (DoA, 1998). To do this, the

Department set three major goals for policy reform. These are to build an efficient and

internationally competitive agricultural sector; to support the emergence of a more

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diverse structure of production with a large increase in the numbers of successful

smallholder farming enterprises and to conserve our agricultural natural resources and

put in place policies and institutions for sustainable resource use.

3. The Strategic Plan for South African Agriculture , “Sector Plan”,

The Strategic Plan for South African Agriculture, better known as “ The Sector Plan of

South Africa” was released by the Presidential Working Committee on Agriculture in

2001. Sector Plan was an attempt to foster closer collaboration between government,

the commercial farmers’ union, Agri South Africa and the emerging black farmers’

union, National African Farmers Union (NAFU)(Agriculture, 2001). The Sector Plan

provided a common agricultural perspective to which government and industry could

commit their efforts and resources in its implementation, with a common vision of “ A

united and prosperous agricultural sector”. Three core strategies were adopted in

support of the sector were to enhance equitable access and participation in the

agricultural sector, improve global competitiveness and profitability and ensuring

sustainable resource management.

The plan intended to establish an implementation plan and ensure that the sector pays attention to the three core strategies.

4. Integrated Food security programme.

The Integrated Food Security and Nutrition Strategy (IFSS) was approved y Cabinet

and is designed to streamline, harmonize and integrate the diverse food security

programmes into a single framework. The objective to attain universal physical, social

and economic access to sufficient, safe and nutritious food by all South Africans at all

times.

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Meyer et al. (2008) argues that unless government acts meaningfully and support

agriculture in the application of corrective policies and possibly emergency measures,

rural and urban poor economies could collapse. The long-term sustainability of food

supply will depend on the interrelationship of the natural resource base (affected by

earth warming and climate change), energy supply (which is finite), international food

production and competitive trends, demographic trends, level of technology, level of

fixed investment and the research capability of a country, among other things (Meyer et

al., 2008). This situation clearly emphasizes the vital role of farm level production,

environmentally adapted farm technology and early warning systems for future food

policies and food security strategies. A productive farming sector at commercial and

small-scale levels must be viewed as an important feature in future food security

strategies.

5. Comprehensive agricultural support pogramme (CAS P)

The Comprehensive Agricultural Support Programme (CASP) introduced in 2004

and is currently introduced at the provincial level. The aim of CASP is to enhance the

provision of support services for agricultural development. CASP targets beneficiaries

of the Land Reform and Agrarian Reform programmes, dealing with the allocation of

agricultural support to various groups of beneficiaries including the hungry and

vulnerable, subsistence and household food producers.

6. Department of Agriculture and Department of land affairs Leadership alignment process

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LA

ND

&A

GR

ICU

LT

UR

E

REPUBLIC OF

SOUTH AFRICA

Goals, Strategies & Objectives

Job Creation6 million

Economic Growth

6%

PovertyEradication

50%

Sustainable AgriculturalResource Use

Profitability &

Competitiveness

Access &

Participation

Good

Governance

Objectives Objectives

StrategiesStrategies

GoalsGoals

Agribusiness

Services

Production

Land Reform

Exports

Source: Department of Agriculture; 2006

LARP created a partnered delivery paradigm for agricultural and other support services based

upon the concept of “One-Stop Shop” service centres located close to land reform beneficiaries,

its principles are: concentrate on focus areas (farm dwellers, corridors, commodities etc),

aaligned comprehensive support, ccooperative government (joint planning, budgeting, approval

& implementation up to municipal level through the Integrated Development Plans-IDP),

decentralised implementation to lowest level, ppartnerships for delivery and ssustainable

individual project success. Unfortunately this document was developed at a concept level

without an implementation plan. This concept document had 5 targets which are to rredistribute

5 mil ha to 10 000 new entrepreneurs, iincrease black entrepreneurs by 10%, uuniversal access

to support (including all economic & social services), iincrease agricultural production by 10-

15% and increase agricultural trade by 10-15%

7. Five year Review of the Strategic Plan of South African Agriculture

The sector plan was reviewed in order as to assess the progress with implementation

and to highlight possible shortcomings which could lead to a revised Plan. The review

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presented clear evidence that there has been widespread buy-in into the philosophy of

the plan with generally good intentions amongst all stakeholders and Government

departments. At the intellectual level, the notions of Unity, Cohesion, Nation Building,

Reconstruction and Transformation of the economy and society in general permeate the

discourse and literature of the partners. Some of the unity initiatives included the signing

of Memoranda of Understanding (MoU) between NAFU and AgriSA, which was

intended to guide the parties’ conduct relative to each other. (Agriculture, 2008)

The review process has found that the Strategic Plan Implementation Committee, which

would have given coherence to the overall governance of the Strategic Plan

implementation, was not established as intended. Little evidence has emerged to show

that the stakeholders deliberately integrated or aligned efforts to translate the global

master sector plan into a coordinated and complementary implementation work

breakdown. What is emerging is that the attempts at implementation happened in silo

formation resulting in parallel processes thereby losing the opportunity for resource

sharing, economies of scale and joint learning.

Each stakeholder that had adopted a sector plan based on the master Strategic Plan,

delivered and accounted to its principals accordingly. The lack of a Strategic Plan

Implementation Committee means the loss of opportunity to realign the goals,

objectives, programmes, structure and resources of the Department of Agriculture and

Provincial Departments of Agriculture to the Strategic Plan for South African Agriculture.

8. Trade policies

Agricultural trade policies can be divided into 2 main categories. The first looks at

policies and instruments aimed at the stimulation of output markets and covers trade

liberalization and market deregulation, while the second category focuses on those

policies and instruments aimed at strengthening the performance of factor markets –

land, labour and capital. The key feature of post-1994 trade policy in agriculture was the

replacement of direct controls over imports and exports by tariffs, and the lowering of

those tariffs below the bound rates agreed to in the Marrakech Agreement of 1993. In

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addition, countries in the Southern African region have been granted preferential access

through the abolition of quantitative controls over agricultural trade within SADC, a

range of bilateral treaties and free trade agreements. These changes are in accordance

with national trade policy, whose aim is to lower the average level of tariffs and to

simplify the tariff structure.

The tariff structure that has resulted from the changes in trade policy generally affords

greater protection to value-added products as compared to commodities. One result is

that farmers generally sell their products into oligopolistic markets, and buy their inputs

from oligopsonistic suppliers, which adversely affects their terms of trade. These effects

can be countered by increasing multifactor productivity. However, continued increases

in productivity are dependent on new technologies, which in turn are partly dependent

on state funding.

Until early 1998 the marketing of most agricultural products (some 70% of output by

value) was extensively regulated. With the introduction of the NAMC, the former control

boards were dismantled. Whereas the main function of these institutions created under

the previous Marketing Act was to implement market interventions, the main function of

the NAMC is to monitor those few interventions that are permitted to ensure that they do

not create market distortions that could adversely affect the welfare of the sector, as

measured by the objectives of the Act. The effects of deregulation differed between field

crops, the horticultural and the livestock sub-sectors of agriculture, partly because of

their different modes of production, and partly because the nature of control under the

old Act differed between different commodities.

Article 6.2 of the Agreement on Agriculture is a specific provision for developing

countries to support low income and resource poor farmers with investment and input

subsidies without this expenditure being counted under the amber box. The “Green

Box” is a support that is non, or at least minimally trade distorting. This includes

measures such as agricultural research, extension, off-farm infrastructure development,

SPS measures and domestic food aid (e.g. school feeding programmes). It also

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includes direct payments to supplement farmer incomes (not linked to production or

yields), contributions to income and crop insurance programmes and environmental

programmes. All South Africa’s support was notified under the green box since year

2000.

9. The Sanitary and Phytosanitary Agreement (SPS).

System for Sanitary and Phytosanitary measures in the rural areas of Soouth Africa still

needs to be strengthened. In terms of the SPS agreement, members shall ensure that

their sanitary or phytosanitary measures are based on an assessment, as appropriate to

the circumstances, of the risks to human, animal or plant life or health, taking into

account risk assessment techniques developed by the relevant international

organizations. Thus for the rural areas it is important for government to invest in

systems which will ensure reductions in risks associated in plants and animal diseases.

10. Access to finance

Internationally it is recognized that the nature of agricultural production makes it difficult

and costly to finance farmers. Firstly, agriculture is concentrated in rural areas with poor

infrastructure. Secondly, unlike other sectors, farmers not only have to contend with

market risks, but also with environmental factors such as weather. Furthermore, land

absorbs a large percentage of farmers` capital requirements with long periods needed

to generate returns to pay for land. Moreover, in South Africa , there is a skewed

distribution of production with about 20% of farms producing the bulk of the output.

Therefore, governments world-wide have adopted a wide range of measures to support

farmers` access to financial services. In South Africa, the Land Bank was established in

1912; the DoA established the Agricultural Credit Board (since disbanded); the IDC

finances primary agriculture on a project basis; levies approved by the Minister on

advice from the NAMC, which includes the funding of the `rural development and

poverty alleviation` element of the AgriBEE scorecard; and the establishment a

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government agency in 2004 – MAFISA – to help close the funding gap and initially

earmarked with R1 billion for this purpose.

AgriBEE also has a role to play in making factor markets more equitable. While the

programme encompasses the whole economy, the focus is on the priority sectors that

government has identified in the Industrial Policy Aton Plan (IPAP), including agriculture

and agro-processing. The agricultural sector has drafted its own charter and scorecard.

The main strength of the scorecard approach is the manner in which enterprises are

`linked` together through the preferential procurement element. In this manner, while

participation in BEE is nominally voluntary, the policy does not share the weaknesses of

some contemporary policies aimed at redress, such as the Employment Equity Act and

the application of labor legislation in agriculture, where compliance is difficult to enforce

because of the structure of the sector. Pressure to participate in BEE will, in other

words, come from within the programme.

The total cost of support to the agricultural sector, measured as a percentage of the

GDP, decreased from 1 % between 1995 and 1997, to 0.59 % between 2005 and 2007

(NAMC, 2009). This is considerably lower than the average of 0.97 % for developed

countries (NAMC, 2009). Ineffective farmer support programmes on a meaningful scale,

have mostly disadvantaged the subsistent, emerging, and struggling commercial

farmers, and thus threatens the growth and development of commercial agriculture

11. Competition Act

Since the deregulation of our domestic market as a result of the implementation of the

Marketing of the Agricultural Produce Act of 1996, the food industry has since seen a

trend of food prizes collusion. The Competition Commission in-acted in 1996 investigate

uncompetitive behavior of businesses within the food value chain and penalizes such

behavior to protect consumer from cartel induced prizes. Most if the food products

consumed by the rural communities is produced and processed outside of their vicinity,

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dependency on the value chain is inevitable. This therefore posses a challenge on the

food affordability thus impede their food accessibility.

12. Zero rating of key food and non-food

There are about 19 food and non-food that are exempted from taxation in

South Africa [i.e. brown bread, illuminating paraffin, salt, maize meal, fish &

vegetable oil, tinned pilchards and sardines etc]. The main policy objective

of subsidizing these products was to increase their affordability thus

improving their accessibility as well. These are products that constitute

almost every household food and non-food expenditures. Most of the rural

communities were heavily reliant on the fuel wood and paraffin for their

household energy consumption, subsidization therefore eased the

affordability burden.

13. Other policy and programmes which impact on rur al development

(a) The White Paper on Land Policy (1997)

This links land reform to the promotion of both equity and efficiency through a

combined agrarian and industrial strategy in which land reform is a spark to the

engine of growth. The main objectives of land reform are to redress past

injustices, foster reconciliation and stability, support economic growth, improve

household welfare and alleviate poverty.

(b) The Land Redistribution for Agricultural Developmen t (LRAD)

The LRAD programme (2000) was designed to provide financial assistance to

black South Africans to access land specifically for agricultural purposes.

(c) Agricultural research

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Agricultural Research reforms envisage re-orientation of applied research

towards the requirements of small famers and the creation of incentives for the

private sector to invest in agricultural research. Investment in agriculture,

forestry and aquaculture research and the maintenance of national assets will be

of priority within the next coming 5 years. Exploring opportunities in SADC and

other priority African countries and harmonizing policies within the SADC region,

will be of priority to the Department to ensure that there is increased food security

in the region.

(d) ASGISA (The Accelerated and Shared Growth Initiativ e for South Africa

In contrast to the formal policy documents on agricultural policy that have

progressively stressed the need for greater equity in the sector, the ASGISA

strategy launched in 2006 explicitly identified a number of agricultural projects

and programme areas aimed at realizing more balanced agricultural growth.

These include 50% increase in land under irrigation, improved livestock

productivity incl. goat and goat products, aaccelerated land reform and Bio-fuels

Within the context of these initiatives, special emphasis was placed on

smallholder agricultural development and as such ASGISA signalled a policy shift

towards greater support for the country’s 1,3 million small-scale, resource poor

farmers.

Conclusion

South Africa’s approach to agriculture and rural development is built around the concept

of developmental local government. The democratization of South Africa is associated

with a policy of decentralization in which services are increasingly being devolved to the

local level. The government has adopted an inter-governmental planning system. which

includes a Medium Term Strategic Framework (MTSF) at the national level, Provincial

Growth and Development Strategies (PGDSs) and municipal Integrated Development

Plans (IDPs).

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Agriculture's role in the economy goes beyond pure economic considerations since its

importance to the economy cannot only be argued on its economic contribution (Vink,

2003). The importance of agriculture is rooted in its economic contribution, social

impact, providing food security and nutrition and contribution to the sustainability of the

environment (NAMC 2009). It further argues that agriculture may be used as a strategy

for poverty alleviation and social integration.

In the light of global warming agriculture has a role to play in balancing the ecology. Our

contribution into the rural development strategy will be guided by the production

strategy. Government of South Africa will work with other state owned entities (Land

Bank, DBSA; ARC and DFI’s) to ensure that spatial planning and land use management

concepts are part of our rural development. Furthermore, collaboration with Department

of Rural Development and Land Reform in the implementation of Comprehensive Rural

Development Programme (CRDP) in indentified areas is crucial for harmonized action

and financial resources investment.

References

DoA. (1998). White Paper on Agricultural Policy. Pretoria: Department of Agriculture.

Meyer, G., Breitenbach, M., Fenyes, T., & Jooste, A. (2008). The Economic Rationale for Agricultural regenration and Investment in South Africa. Journal of Development Perspectives , 3 (1), 72-92.

NAMC. (2009a). Food Cost Review, 2009. Pretoria: National Agricultural Marketing Council (NAMC).

Vink, N., & Kirsten, J. (2002). Pricing Behavious in the South African Food and Agricultural Sectors. Pretoria, South Africa: National Treasury.

Vink, N., Tregurtha, N., & Kirsten, J. (2008). Presidency fifteen year review report- review of agricultural policies and support. Pretoria, South Africa: ComMark Trust.

CASE STUDY

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The case study to be presented during the conference focuses on the broiler production

in the Limpopo province. Initially the province started with small poultry project of about

500 to 100units. These small producers could not survive in the South African market as

their production was relatively uneconomical. Farmers in these small units had to save

money for the next cycle but in some instances they had to purchase other things.

Electricity, water and purchase of medicines and feed resulted in the situation where

these farm units could no longer be sustainable. Farmers ended up purchasing

uncertified medicines and feed which led to increased mortalities. These small farmers

were not taken seriously by the market due to inconsistency of supply and the fact that

their orders were considered last as they were procuring small amounts as compared to

bigger production. Limpopo province then developed their own economic model where

the supply were linked to abattoirs . So far 26 houses of 40 00 units has been

established. The example use will reflect an example of a farm owned by a woman. She

is now building a second house without government assistance.