Size matters. It is easier for a massive farming operation to survive price volatility and lower margins than it is for small or medium-sized operations. All over the world, big farmers are growing bigger, while smaller farmers drop out of the industry.
It's a bit like playing Monopoly. You end up with only one or two players while all the others are no longer part of the game.
When big corporations start to do primary production, they leave little space for smaller farmers to compete.
There is a growing tension between small and medium-scale farmers and agribusinesses because farmers have limited bargaining power. Very often the profits in the food chains are concentrated elsewhere downstream and upstream in the value chains and smaller farmers struggle to make ends meet.
There was a time when the first and second steps of processing, and even some of the packaging and logistics were done by cooperatives which were owned by the farmers themselves. Such cooperatives were the backbone of agriculture in the early to middle 20th century. These cooperatives became very successful and eventually dropped out of the hands of the farmers, some to become listed companies while others were later bought by foreign investors.
Some of the most important stakeholders in the upstream value chains are the banks and other financial services providers. The Landbank as a state owned entity played a key role in getting agriculture to the competitive level where it is today, but along with some other financial services providers who are members of Agbiz, recently became predator financiers and forced farmers to fight back against suspicious practices in the liquidation of hundreds of farmers who experienced cash flow problems.
These are the same institutions and banks who are now soothing farmers that the new Expropriation Act is nothing to fear. They keep on communicating to the world that this expropriation act will not influence their lending patterns. As providers of loans and mortgages they effectively become co-owners of agricultural enterprises and more specifically agricultural land. Will they also proportionately share in the risk if land gets expropriated at less than market value or even worse, zero compensation? No declaration of intent has yet surfaced in this regard.
When Saai as a network for family farmers declared a war on the Landbank for its aggressive liquidation of hundreds of family farmers who experienced cash flow problems, mostly as a result of a prolonged drought, it was the first time that organized farmers pushed back against predator agri-businesses.
It is in the light of this growing tension between small and medium-scale farmers and agri-business that one must read the latest book by Wandile Sihlobo and Johann Kirsten, the "Uncomfortable Truth About South Africa's Agriculture".
It is interesting that this book covers every stakeholder in the agricultural arena, but there is close to nothing about the organized agricultural business community.
Wandile Sihlobo happens to be employed by Agbiz.
The "uncomfortable truth" revealed by this book is that all stakeholders in the agricultural sector, be it farmers, farmers' organisations, commodity organisations, government, or policy makers are being blamed for everything which is criticised in this book.
But you will read nothing about the role of agricultural businesses.
This book is on the thin side, in a physical sense too.
It is the kind of book which readers will afterwards discuss more about what is not in there, than about the contents of it.
It often speaks against itself, and even more against the positions taken by its authors in social media and agricultural magazines and newspapers.
Already in the introduction, Sihlobo and Kirsten point out that government has performed far better with land reform than what it gives itself credit for. They rightly point out that, of the goal of 30% of productive farmland which it committed to move from white ownership to black ownership, 25% has already been bought (using the excellent data of Johann Bormann).
It goes into the detail of where that number comes from, and rightfully set the record straight on the myths of land ownership in South Africa.
What it does not say, is why they are so critical towards those organizations who question the necessity of expropriation at below market related values to achieve the remaining 5%. The reader should not hope to understand why international trade agreements, investor confidence, the GNU and peace and stability in South Africa are put on risk by signing off the most controversial law since the dawn of democracy, for a mere 5% of land while more than that is on the market right now.
It does not explain the impact of the new Expropriation Act on agricultural financing and how the members of Agbiz, especially the banks and other financial services providers, will share in the risk posed by this new act.
It does not address the attacks on the willing seller principle and the way white farmers are being blamed for all the failures of land reform.
Not everything in the book is poorly researched or not worthy to explore as possible solutions. The way misinformation and myths about the redistribution of land is being addressed, is excellent. So is the proposal by the two authors that the more or less two and a half million hectares of farmland in the hands of the state, which are farms which have been bought by government but not transferred to beneficiaries, should be sold to black farmers for half the price it was bought by government.
It was expected though that this book would overemphasize the role and potential of the Agricultural and Agri-processing Master Plan, the AAMP.
The blaming of government and farmers organizations as well as other civil society groups for the lack of implementation of this plan gets somewhat boring.
To their credit, the authors acknowledge that there were problems with negotiating the plan, and even that business, government and labour agreed to the plan, but right there, they put their foot in the snare!
The problem with the plan has, since its inception, been that it is an agricultural plan without farmers. The two authors do not even try to mention the role of the farmers in hatching this plan. Then they have the audacity to attribute the lack of implementation to what they call an unnecessary demonizing of the plan. The real uncomfortable truth is that there is nothing for the farmers in this plan.
There is no mention that Saai, Wildlife Ranching SA, National Employers Association of SA, Agricultural Employers Organisation, organised consumers, and other national stakeholders were deliberately excluded from the formulation of the plan, or that TLU-SA was dropped from the discussions when it asked for clarity about the meaning of transformation, or that everything about wildlife farming was removed from the plan without any explanation.
This is a plan for agribusinesses with an overdose of the typical ANC transformation agenda, the same agenda which saw Eskom, Denel, SABC, public healthcare, education, and the general maintenance of infrastructure to collapse.
The real uncomfortable truth about this plan is that there is nothing, not even a mention, of the profitability and the sustainability of farming or about the need for efficiency in our value chains.
The real uncomfortable truth is that this plan paves the way for big business in agriculture to buy their way through the suffocating policies of BEE, whilst it leaves the average family farmer to the mercy of an inept state which is hell bound to ensure that it's cadres benefit from any possible transaction without adding any value to it.
There is unfortunately also some unforgivable false news and misrepresentation in this book. The book states that Saai claims to represent mainly white farmers,
while Minister John Steenhuisen and his department can testify to the fact that more black farmers represented Saai in official meetings and stakeholder engagements with the department, than white farmers. The authors should be challenged to show where Saai actually claimed to represent mainly white farmers.
Given that none of these authors have ever attended a Saai Farmers Day for beneficiaries of land reform, urban- or peri-urban farmers, or smallholders or communal farmers, the picture they try to paint of Saai is aimed at supporting their own narrative rather than to portray the truth.
When they address the lack of unity in organized agriculture, explaining how personalities and sectoral agendas caused the division of farmers organizations, they fail to address the fact that the agricultural business fraternity as represented by Agbiz, is a perfect example of just that.
History can not be rewritten to make it suit your narrative. In this book, the authors go to lengths to explain how and why the TLU-SA broke away from Agri-SA in 1999, after the latter launched provincial substructures based on the new nine provinces in the country. Then they mention, as if it is an extension of the same action, that Agbiz too separated from organized agriculture in 2002 to cover the interests of agricultural businesses.
This is not true.
Agri-SA always had three chambers of which only one represents the farmers on the farms; the general affairs chamber. The other two chambers are the commodity chamber for commodity organizations and an agricultural business chamber for agribusinesses. Agbiz originated from that agricultural business chamber who broke away from AgriSA much later in 2010, and changed its name from Agricultural Business Chamber to Agbiz in 2012 because of personalities, because of complaints about the leadership and because of tension between the general affairs chamber (the farmers), and the agribusinesses on issues such as the Agri-BEE Charter and sub market related offers on farms in the land reform programs.
The book never mentions that.
After Agbiz broke away from AgriSA, AgriSA kept on organizing agricultural businesses too, and until this day maintains its own agricultural business chamber.
There must be a reason why the two authors choose not to refer to a shared membership between Agbiz and the agricultural business chamber in AgriSA, and say nothing about the competition between the two. Explaining Agri-SA's history, composition and functions, the authors do not mention that Agbiz also started to accommodate commodity organisations in competition with AgriSA and that certain commodity organizations actually broke away from AgriSA to join Agbiz, such as the Citrus Producers Organization, Wine SA and Hortgro. There are even some mega farmers who became members of Agbiz because of similar problems with the leadership and policies of AgriSA.
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This is the reason why the book try to pretend that farmers in local farmers organizations are the primary members of AgriSA, not mentioning the agricultural businesses or the commodity organizations.
In the paragraph where it describes commodity organizations as a form of organized agriculture, they do refer to some of the commodity organizations as members of Agri-SA, but then also list those which are not part of Agri-SA, and they quote issues with the leadership as the reason for that. They do not explain why an organization like Citrus South Africa chose to leave Agri-SA and join Agbiz, nor why Agbiz allows membership of commodity organisations or individual mega farmers, and thereby duplicating the functions and scope of Agri-SA.
The uncomfortable truth is that all the reasons quoted for a lack of unity amongst farmers organisations, like personally clashes, own sectoral interests, leaderhip deficiencies and opportunism were the driving forces behind the separation between Agbiz and Agri-SA too, but the book is silent on that.
Then they get to Saai.
They ascribe the origins of Saai to a fallout in the Agri-SA leadership elections in 2019, but they don't say on what they base their facts. There was nothing strange about Agri-SA's leadership elections in 2019. It was mostly the same leaders who were re-elected unopposed in October 2019. It was two months before Pierre Verciuel took over as president of Agri-SA in a surprise move when Dan Kriek was relieved from the position in a board meeting. It had absolutely nothing to do with Saai or any of its members. It was five years since anyone associated with the launch of Saai took part in an election in Agri-SA.
Saai already had more than two and a half thousand members in December 2019 after it was launched in February of that year. Saai already had more members than Agri-SA in Gauteng and Limpopo.
Then the two authors take the position that there should not be an organization for family farmers, and here they show their true colors!
Being silent about the need for agricultural businesses to have their own organization, free from the influence of farmer's interests or value chain commodity interests,
their frustration with having a structure for family farmers, free from the influence of agribusiness, is telling.
The narrators in this book are two black farmers, Enoch and Ronald, who apparently are confused and in distress for not being able to find a home in organized agriculture.
The book goes to lengths to explain their agony in looking for an organization who can protect and promote their interests.
We have pictures of the one with the real name in his Saai shirt, taken a year before the writing of this book! He also stars in our Lambchamps series on Kyknet.
Written by Dr Theo de Jager. CEO SAAI South Africa Contact - This email address is being protected from spambots. You need JavaScript enabled to view it.
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