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22 February 2022 | Story Leonie Bolleurs | Photo Leonie Bolleurs
smallholding symposium
Talking about the future of smallholder farming in South Africa, were from the left: Prof Linus Franke, Prof Philippe Burger, Dr Qinisani Qwabe, and Prof Ken Giller.

On 17 February 2022, the Department of Soil, Crop, and Climate Sciences at the University of the Free State (UFS) presented a symposium on the future of smallholder farming in South Africa on its Bloemfontein Campus. Head of the department, Prof Linus Franke, says with this symposium they aim to contribute to a change in the conversation about smallholder farming. 

Prof Philippe Burger, Pro-Vice-Chancellor: Poverty, Inequality and Economic Development at the UFS, presented on The forgotten: South Africa’s former Bantustans today. He believes in 30 years – although the first democratically elected government introduced new labour legislation, abolished the Bantustans, and created a single non-racial education system – not much has changed for the former Bantustans.

“Communal land in South Africa, mostly the former homelands such as the Transkei, Ciskei, and Bophuthatswana, is today trust land that are managed by traditional leaders. With the 2011 census, it was found that a large part of the population is still living on traditional land (32%),” he says.

According to his data, the number of people depending on subsistence farming has increased from 1 767 000 to 2 285 000 in the past ten years. 

The deeply poor, traditional leaders, and tenure rights

He says he does not believe that South Africa is only two nations in one, as was stated by former President Thabo Mbeki, but three. “There are the rich and poor in cities, with the poor still being predominantly black, and then there are the people living in what is euphemistically called deep-rural areas, basically the former homelands. There, the poor are even poorer than in the cities and they are virtually all black. And the ones who benefit in these deep-rural areas, are the traditional leaders.”

He believes that the poverty we see in communal areas can be largely linked to the lack of tenure rights. “People live and work on the land, but even though the constitution states that they should have tenure rights, they do not have tenure security. Thus, they cannot use tenure rights to leverage themselves to a better financial position,” he explains. 

The literature on tenure reforms, according to Prof Burger, boils down to one of three options. Firstly, individual titling of land where individuals farm on pieces of communal land allocated to them or their families, but without a title deed to the land. 

In the scenario of individual titling, it is impossible for people to sell land or to use it as collateral to obtain investment loans. He says in the Mystery of Capital, Hernando de Soto proposes the allocation of title deeds to individuals, thereby allowing them to use the land as capital to improve their lives. “It is, however, not the best solution because of overlapping use rights,” he states.

The other two options are a combination of communal ownership and small-scale farming, and a combination of communal ownership and large-scale commercial farming. Prof Burger says the two-tier system of titling is a better solution. “Here, the land is communal and the use rights to the land are recognised in the law. With recognised use rights, small-scale farmers can offer future income from their land as security to get loans,” he adds. 

However, according to him, what is also needed is the design of an economic ecosystem within which small-scale farmers can operate, proper education for the youth can take place, and extension services and training of farmers can be provided. “Government, the private sector, and universities can play a role.”

He also believes that democratising control over communal land – taking power from the chiefs and putting it in the hands of the community – will take away control from the chiefs, without denying them their constitutional right to have a role in society. “They will have a role in terms of tradition, belief, and culture, while control of the land will then reside with the people living on the land.”

“It is time that we bring the everyday life of the people living on communal land also into democratic South Africa. It needs to be done in such a way that it will improve their well-being,” Prof Burger concludes. 

A food security conundrum and small-scale commercial farmers 

Taking a step back to talk about smallholder farmers in sub-Saharan Africa, was Prof Ken Giller from the Department of Plant Production Systems at Wageningen University in the Netherlands. The title of his presentation, Smallholder farmers in Sub-Saharan Africa: Stepping up, stepping out and hanging in, refers to the different aspirations and livelihood strategies that smallholder farmers in sub-Saharan Africa pursue.

By 2030, the population is estimated to have grown by an extra billion people, with sub-Saharan Africa experiencing the most rapid growth. “As the population numbers rise fast, there is an urgent need to increase production of food,” says Prof Giller, who sees an opportunity for smallholder farmers in the challenge.

Defining a living income as the net income that a household will need to earn to enable it to make a decent living, he says in sub-Saharan Africa, 37% of households are food insecure. Given the small areas of land to which smallholder farmers have access, even a drastic increase in productivity per unit area will not be sufficient for many smallholders to make a living from farming. Nevertheless, agricultural development has proven to be the most effective way to reduce poverty and hunger among the poorest rural households.
To address hunger and poverty, a continued focus on food production in Africa is needed, as global food production for Africa cannot achieve zero hunger. – Prof Ken Giller

He says to address hunger and poverty, a continued focus on food production in Africa is needed, as global food production for Africa cannot achieve zero hunger (Sustainable Development Goal 2). 

Prof Giller believes a drastic rethink of policy is needed to support agriculture in Africa in order to achieve zero hunger, acknowledging the wide diversity of agro-ecologies, socio-economic situations, and farmers’ livelihood strategies. 

“Action is needed to rethink the future of farming. It is, however, a food security conundrum – achieving on the one hand cheap, nutritious, and affordable food for all, including the urban poor, and at the same time providing appealing livelihoods for smallholder farmers, with them receiving decent prices for their agricultural products,” he says. 

Speaking on the topic, Tackling sustainability through small-scale commercial farming, was Dr Qinisani Qwabe, Lecturer in the UFS Department of Sustainable Food Systems and Development. 

He believes that small-scale farmers see themselves as commercial farmers on a relatively small scale. They actively contribute to the market. Dr Qwabe suggests that most farmers who are considered emerging farmers do not like this term themselves, as it seems to put a label on them. 

Talking to small-scale commercial farmers, he learned that there are some hard realities they need to overcome on a daily basis. Some of the challenges they are encountering, include poor infrastructure, lack of capital, water restrictions, operational cost, access to markets due to poor roads in the area, and discrimination if you are a woman. 

News Archive

Inaugural lecture: Prof. Phillipe Burger
2007-11-26

 

Attending the lecture were, from the left: Prof. Tienie Crous (Dean of the Faculty of Economic and Management Sciences at the UFS), Prof. Phillipe Burger (Departmental Chairperson of the Department of Economics at the UFS), and Prof. Frederick Fourie (Rector and Vice-Chancellor of the UFS).
Photo: Stephen Collet

 
A summary of an inaugural lecture presented by Prof. Phillipe Burger on the topic: “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

South African business cycle shows reduction in volatility

Better monetary policy and improvements in the financial sector that place less liquidity constraints on individuals is one of the main reasons for the reduction in the volatility of the South African economy. The improvement in access to the financial sector also enables individuals to manage their debt better.

These are some of the findings in an analysis on the volatility of the South African business cycle done by Prof. Philippe Burger, Departmental Chairperson of the University of the Free State’s (UFS) Department of Economics.

Prof. Burger delivered his inaugural lecture last night (22 November 2007) on the Main Campus in Bloemfontein on the topic “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

In his lecture, Prof. Burger emphasised a few key aspects of the South African business cycle and indicated how it changed during the periods 1960-1976, 1976-1994 en 1994-2006.

With the Gross Domestic Product (GDP) as an indicator of the business cycle, the analysis identified the variables that showed the highest correlation with the GDP. During the periods 1976-1994 and 1994-2006, these included durable consumption, manufacturing investment, private sector investment, as well as investment in machinery and non-residential buildings. Other variables that also show a high correlation with the GDP are imports, non-durable consumption, investment in the financial services sector, investment by general government, as well as investment in residential buildings.

Prof. Burger’s analysis also shows that changes in durable consumption, investment in the manufacturing sector, investment in the private sector, as well as investment in non-residential buildings preceded changes in the GDP. If changes in a variable such as durable consumption precede changes in the GDP, it is an indication that durable consumption is one of the drivers of the business cycle. The up or down swing of durable consumption may, in other words, just as well contribute to an up or down swing in the business cycle.

A surprising finding of the analysis is the particularly strong role durable consumption has played in the business cycle since 1994. This finding is especially surprising due to the fact that durable consumption only constitutes about 12% of the total household consumption.

A further surprising finding is the particularly small role exports have been playing since 1960 as a driver of the business cycle. In South Africa it is still generally accepted that exports are one of the most important drivers of the business cycle. It is generally accepted that, should the business cycles of South Africa’s most important trade partners show an upward phase; these partners will purchase more from South Africa. This increase in exports will contribute to the South African economy moving upward. Prof. Burger’s analyses shows, however, that exports have generally never fulfil this role.

Over and above the identification of the drivers of the South African business cycle, Prof. Burger’s analysis also investigated the volatility of the business cycle.

When the periods 1976-1994 and 1994-2006 are compared, the analysis shows that the volatility of the business cycle has reduced since 1994 with more than half. The reduction in volatility can be traced to the reduction in the volatility of household consumption (especially durables and services), as well as a reduction in the volatility of investment in machinery, non-residential buildings and transport equipment. The last three coincide with the general reduction in the volatility of investment in the manufacturing sector. Investment in sectors such as electricity and transport (not to be confused with investment in transport equipment by various sectors) which are strongly dominated by the government, did not contribute to the decrease in volatility.

In his analysis, Prof. Burger supplies reasons for the reduction in volatility. One of the explanations is the reduction in the shocks affecting the economy – especially in the South African context. Another explanation is the application of an improved monetary policy by the South African Reserve Bank since the mid 1990’s. A third explanation is the better access to liquidity and credit since the mid 1990’s, which enables the better management of household finance and the absorption of financial shocks.

A further reason which contributed to the reduction in volatility in countries such as the United States of America’s business cycle is better inventory management. While the volatility of inventory in South Africa has also reduced there is, according to Prof. Burger, little proof that better inventory management contributed to the reduction in volatility of the GDP.

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