Finding Common Ground: Land, Equity and Agriculture

By Wandile Sihlobo

‘My hope is that people can grow to appreciate this sector – its challenges and opportunities, but most importantly, the role agriculture can play in improving South Africa’s rural economy, creating jobs and bringing about much-needed transformation (or inclusive growth).’

Wandile Sihlobo is perfectly positioned to provide a well-rounded, accessible view of agriculture in South Africa. He spent his school holidays in the rural Eastern Cape, studied agricultural economics at university, has worked in private-sector agriculture, consulting with farmers across the country, and has been an adviser to government as part of South African policymaking bodies.

Finding Common Ground is a selection of key articles from Sihlobo’s regular Business Day column, framed with insightful commentary and context. The book covers the broad themes that have marked current discussions and outlines the challenges and opportunities faced by South Africa’s agricultural sector, including:

• The contentious and complex issue of land reform;
• The potential for new leadership to revive the sector;
• How agriculture can drive development and job creation;
• Cannabis as an exportable commodity;
• The urgent need for agricultural policy to address gender equity and youth involvement;
• Technological developments and megatrends that are underpinning agricultural development;
• The importance of trade in growing South Africa’s agriculture; and
• Key lessons that South Africa and other African countries can learn from one another.

Ultimately, Sihlobo is optimistic about the future of South Africa’s agricultural sector and shows us all – from policymakers to the general public – how much common ground we truly have.

• Language: English
• Publisher: Picador Africa
• Release date: Apr 1, 2020
• ISBN: 9781770107175

Book preview

PREFACE

I never planned to be an agricultural economist. In fact, as far as I can recall, for the better part of my high-school years I did not even know there was such a career. I grew up in the former Transkei – a region that did not, and still does not, have vibrant agricultural activity.

What I saw while I was growing up was mostly smallholder farming, of the type where you wonder whether it is really farming, or if it’s just that someone has a garden as part of a plot of land.

I spent the school term in an urban environment, but during the school holidays, when all the family gatherings happened, we would flock back to our rural homes. Our family was scattered throughout the Eastern Cape, so I spent time in different towns: Lusikisiki, Engcobo, King William’s Town, East London and Stutterheim.

In Lusikisiki and Engcobo (small towns, with a population of less than 15 000 people combined), you’ll find the heartlands of smallholder farming. Here, I herded cattle during school holidays and gained first-hand experience of smallholder farming in our family fields (known in isiXhosa as ‘Amasimi’). By comparison, East London, King William’s Town and Stutterheim are relatively big towns (with populations of 267 007, 34 019 and 24 673, respectively).¹ Growing up, I encountered limited agricultural activity in these towns, although later, when I was already at university, I noticed that there are quite a number of commercial farming entities outside East London and Stutterheim (I don’t know how I missed this in my younger years!).

Generally speaking, I think a person’s view of agriculture is shaped by the environment that they grow up in, the schools they attend, and the information they have access to. Many people might not have a full sense of what the value chain, and industrial or commercial farming look like. The first time I encountered commercial agriculture was in high school, when I assisted a community poultry project (my aunt was a member) in Ndimbaneni location in Lusikisiki. It was the first time that I saw how commercial poultry projects were run in communities, and how they supplied the surrounding areas. The infrastructure and the professionalism of the management of the project were impressive. Most importantly, the project supplied the surrounding communities with affordable poultry, and was loved by many small businesses who got their stock from here.

But my work there was physically demanding: feeding chickens in the early mornings and evenings, and doing sales to community members during the day, so at that stage, I had no urge to pursue a career in agriculture. I also didn’t see agriculture as a particularly sensible career choice. From a young age, I noticed that, when people around me talked about agriculture, the conversation was mostly about the small, struggling farmer. It was only much later, with access to information, that I developed a full appreciation of commercial farming and the possibilities in such a space.

I was 17 when I matriculated in 2007, with plans to study towards a Bachelor of Commerce in accounting at the University of Fort Hare. This was partially influenced by the South African Institute of Chartered Accountants, which had promised to award me a scholarship, and by the fact that there are three accountants in my family who weren’t doing too badly for themselves. Also, at the time, it seemed like everyone around me was studying accounting, education, medicine or engineering. These are exactly the areas in which many of my cousins are involved today.

When I first arrived at the University of Fort Hare in Alice, Eastern Cape, in 2008, I was placed in a residence with students in the agricultural sciences field who later became good friends. One of them was already a second-year student. These friendships gave me new insights into agricultural sciences and the day-to-day hustle of the academic work. One day, I sat in on a friend’s agricultural economics class, which gave me a view of the industry.

I had also started reading about the issues of rising global food prices, and the potential scramble for land in Africa. In 2008, agricultural news and discussions centred around increasing investments in Africa, and land grabs by multinational companies that were buying up resources on the continent as global food prices were rising.² For me, it was a fascinating time in geopolitics and economics. It was time to say: hold up, who’s producing the world’s food, and how is the global food system really set up? Also, what is South Africa’s place in all of this?

Further conversations with the agricultural science students, as well as the scholarships that were available, quickly persuaded me to change my area of study to a Bachelor of Science, majoring in agricultural economics and economics.

When I went home for a holiday, my parents picked up one of my transcripts and were rather surprised to see subjects like physics and chemistry on it. They asked me, ‘What does all this have to do with accounting?’ and I had to tell them that I had switched to agricultural science. There wasn’t anyone in my community who had studied anything similar so I wouldn’t have blamed them if they were worried about job prospects. Fortunately, they accepted my new direction quite easily, after I explained my reasons behind this change.

Alice is a small rural town, and I believe this influenced the approach of the University of Fort Hare’s professors in their teaching of agricultural sciences. The department’s philosophy during my time there was to emphasise rural development, with a smallholder-centric approach. At the time, given my own background, and with a growing desire to see improvement in agricultural activity in the former Transkei region of the Eastern Cape, I enjoyed this focus and found it most relevant. I believe that these teachings and my experiences at Fort Hare, specifically the university’s commitment to rural development, set the stage for my career’s future focus. My work since then has been to advance this cause in various forums that I have been privileged to participate in.

Upon graduating, I joined Stellenbosch University in 2012 for a Master’s degree in agricultural economics. Some of the university’s academic leaders were the likes of the inimitable professors Nick Vink, Mohammad Karaan and Johan van Rooyen, who themselves had spent many years in the agricultural policymaking circles of South Africa. With the department focused more on agricultural policy, I was able to develop broader perspective around agricultural issues affecting South Africa. The hours I spent studying agricultural economic history gave me a deeper understanding of how South Africa’s modern agricultural sector (which is dualistic: commercial sector on the one hand, and smallholder sector on the other) came about. We also explored the policies and government incentives that underpinned this structure, with a key focus on deducing possible interventions to uplift the likes of former homelands and other regions of South Africa that have not seen progress in agricultural development.

It is also at Stellenbosch that I received training in international trade. I went on to write my Master’s thesis on this, under the supervision of Ms Lulama Ndibongo-Traub (who has become a great mentor and friend).

I started practising as an agricultural economist at Grain South Africa in 2013, covering a wide range of subjects – mainly grain markets, international trade, macroeconomics, and general agricultural policy. This, again, was an important period in my career, as I was working with experienced agricultural economists and other colleagues in the organisation. It was also at Grain South Africa that I began meeting with farmers – learning how the analysis of what we do in the office translates into decisions at farm level. My job required me to have a solid view on commodity price forecasts (maize, soybeans, sunflower seed and wheat). Jozeph du Plessis, a grain farmer from the North West province town of Schweizer-Reneke, was part of the Grain South Africa executive team at the time and would always keep a note of my price forecasts. This was either to congratulate me later, or take me to task when they turned out wrong. This was fun, and during this grooming stage, it helped me to develop a better understanding of the fundamentals of global grain commodity markets, in addition to the broader agricultural policy work.

While at Grain South Africa, in 2015, I became involved in the Agri-Sector Unity Forum (ASUF), a grouping of all farmer organisations that discussed and lobbied in a united voice on issues of interest. My involvement there was mainly as part of the secretariat of a land reform working group. This gave me first-hand exposure to how South African agricultural leaders approach land reform, and the dilemmas of the chair in trying to forge a unilateral voice from a wide range of stakeholders.

Fresh out of university, I was privileged to experience these developments, and it meant that my views on land reform policy were largely influenced by published research work that some of the agricultural leaders who were part of ASUF brought to the table, and not necessarily by the real-time events that could so easily sway one’s judgement and be affected by bias. I certainly was exposed to the dilemmas that real-time events can cause, and saw how fair decision-making could be implemented in policy discussions. For example, each farmer group organisation that was part of ASUF would have to present its view on any policy in discussion, and this would be debated robustly by other groups around the table to find common ground. Ultimately, the policy would be a holistic representation of the whole membership’s views.

Policymaking involves bargaining, negotiating, trying to get everybody together, and trade-offs. It is invaluable, when advising policymakers in agriculture, to anticipate people’s possible reactions to whatever view you are proposing and to find different ways of communicating it to people. For this reason, being able to relate to and reflect on different sides of the arguments or perspectives of people is a huge strength in the agricultural policy space.

I worked with the big commercial farmers while I worked at Grain South Africa – including some conservative white farmers, but also conservative black subsistence farmers and black commercial farmers. I took the time to listen to what informed their concerns and ways of thinking, and I walked away with much more than just a position for or against them. Similarly, for someone young who, let’s say, is from Stellenbosch, who has never spent time in the former Transkei or in the rural parts of KwaZulu-Natal, the whole world in those places is new. The way of farming will seem strange. But if you have been to those places, it is easier to relate to both sides, and to the broader world of farming. When you approach people with a certain mindset, you can easily assume that you know how they feel about an issue. But when you begin to have a conversation, you learn where they’re coming from.

I believe this equipped me for engagements in agricultural policy going forward. I acquired a much softer understanding of the human side, the psychological side, of why people think the way they do. This is important, since in South Africa, because of the painful history of colonialism and apartheid, one can never divorce agriculture from the political economy. As I’ve mentioned, we currently have a dualistic system of agriculture in South Africa – large commercial farmers, mostly white; and smallholder farmers, mostly black. This setup can be traced back through the country’s history: from the 1913 Land Act, which marginalised black Africans, disallowing the ownership of land, to other discriminating agricultural policies, such as farmer support programmes that favoured white farmers in the years that followed.

Having worked with the commercial farmer, as well as the smallholder farmer, I have a sense of the challenges each group faces, and as I think about development, it helps me to consider what needs to be put in place so that these worlds can one day merge.

I can now confidently say that changing my area of study to agricultural economics was one of the best decisions I have made. Through agricultural economics, I have been fortunate to be part of some of the forums that discuss and assist in making the most important policies in this country; forums in which our judgement, in one way or another, has a direct impact on the functioning of some of South Africa’s most important entities.

In September 2018, I was officially appointed as one of the ten-member panel to advise the president and Cabinet on land reform and agriculture policy in South Africa.³ My academic background, as well as my experience at Grain South Africa and as a lead agricultural economist at the Agricultural Business Chamber of South Africa (Agbiz) from 2016, prepared me for the land reform discussions. The diversity of views that I had come across among farmers and agricultural leaders was mirrored in the ten-member panel; together, we were all able to make some trade-offs and arrive at a conclusive view when our Advisory Panel report was completed in May 2019 (published later in July 2019).

In 2018, I was also appointed as Commissioner of the International Trade Administration Commission of South Africa (ITAC). Here, too, the international trade lessons from my Stellenbosch University days under Ms Lulama Ndibongo-Traub and Dr Cecilia Punt proved invaluable at the Commission, in which, at the time of writing in 2019, I am still serving.

Having been part of these South African policy organs, and having worked in private sector agriculture, I am optimistic about the future of South Africa’s agricultural sector, despite the uncertainties that are often caused by a lack of clarity about some of its policies, and by the changing climate. I also think that people tend to overemphasise the failings of policies such as land reform, instead of learning from the increasing number of examples of successful black-owned agricultural projects and using them to find far-reaching solutions. The problems of dualism in farming and poor economic activity in the rural areas of South Africa do still exist, and this means we should keep our ‘development hats’ on at all times. In this spirit, I think there is a need for the revitalisation of agriculture in South Africa in the near to medium term, with a specific focus on the former homelands and underperforming land reform farms.

In the face of rising unemployment and inequality in the rural areas, more and more commercial farmers and agribusinesses are realising that they cannot stand on the sidelines, as these issues might indirectly affect their businesses. Some have also expressed frustration that there is no clear and practical path for them to contribute to the vision of building the South African rural economy, hand in hand with the government. I hope that the Agricultural Master Plan that, at the time of writing in December 2019, is being developed will respond to this ‘gap’ by identifying priority agricultural subsectors (this could be horticulture, field crops, etc.), rules of engagement, priority regions for development and available incentives, among other matters. Some of the aspects that could be included in the thought process are what South Africa’s Treasury Department has already started to hint at, highlighting in its policy paper that agricultural development requires ‘creating an enabling environment for investment, including financing solutions for farmers; adequate and affordable agricultural insurance; improved extension services for smallholder and emerging farmers; enhanced trade promotion, market access, and access to water for irrigated agriculture; as well as investment in establishing innovative market linkages for smallholders’.⁴ A focus on agro-processing (value addition in agricultural products) could also provide much-needed jobs and keep small towns and rural economies alive and vibrant. On this note, it is important to remember that to attain a million potential agricultural jobs mentioned in Chapter Six of South Africa’s National Development Plan,⁵ advancing agro-processing is key.

Still, growth is beginning. Look at the maize industry. In the Eastern Cape, parts of KwaZulu-Natal, Free State, North West, and Mpumalanga, there is a thriving new class of commercial black farmers, along with coloured farmers in the Western Cape. This goes to show that there is transformation happening in South Africa’s agriculture sector.

Let’s look at the citrus industry in the Eastern Cape – real transformation is going on there, and I have seen