Introduction
South Africa’s land reform aims, among other things, to contribute to economic development, job creation and increasing rural incomes (ANC 1994). The Recapitalisation and Development Programme (RADP) summarises the key strategic objective as ‘combatting poverty, unemployment and income inequality’ (DRDLR 2013a). While there is ‘near-consensus that land reform has been unsuccessful’ (Aliber and Cousins 2013), various factors have been raised as contributing to land reform’s failure to meet its goals. Among the factors negatively affecting livelihood and income generation is the government’s enforcement of an agribusiness model promoting large-scale production (Hall and Kepe 2017; Rusenga 2017). For Hall and Kepe, South Africa’s land reform practice, especially the Proactive Land Acquisition Strategy (PLAS), ‘is in flux – and, arguably, in crisis’ (Hall and Kepe 2017, 122), citing Lionel Cliffe’s argument that the manner in which past redistribution was practised was ‘constricted by old-fashioned “modernist” … orthodoxies’ (Cliffe 2000, 273). Hall and Kepe show how ‘these orthodoxies have shaped a contorted reform, centred on criteria of commercial “viability” and governed by state officials, consultants and agribusiness “strategic partners” concerned with surveillance and control of “beneficiaries” in “projects” with precarious tenure on un-subdivided commercial farms now owned by the state’ (Hall and Kepe 2017, 122).
This article focuses on a single case study in Tzaneen, Limpopo province, to illustrate how the implementation of large-scale, and sometimes capital-intensive, production negatively affected the livelihoods of the beneficiaries. Although the purpose is not to generalise the beneficiaries’ experiences, the article challenges the perspectives that associate success, or even the viability of land reform projects, with the agribusiness model by demonstrating the difficulties of the beneficiaries to sustain production autonomously.
The article starts by discussing how the South African land reform policy and practice enforces the agribusiness model in land reform projects. The case study of the Elangeni project is then presented and discussed to illustrate the difficulties that land beneficiaries experience as a result of the agribusiness model, thereby negatively affecting their income and livelihoods.
The agribusiness model and South African land reform
Following the transition to democracy in 1994, the South African government introduced a land reform programme to address the ‘injustices of forced removals and the historical denial of access to land’ for the black majority (ANC 1994). The aim of the land reform programme, among other things, was to reduce rural poverty, income inequalities and rural unemployment, and to contribute to economic growth (DLA 1997). Between 1995 and 1999 beneficiary households received Settlement and Land Acquisition Grants (SLAGs, of R16,000 per household). While the SLAG scheme was pro-poor in its focus (Hall 2004), the small grants forced beneficiaries to pool their grants together to purchase farms as groups. Many problems with group projects have been identified (Anseeuw and Mathebula 2008). But in addition group projects, coupled with the state’s unwillingness to subdivide the farms, facilitated the entrenchment of large-scale forms of production favoured by the government (Rusenga 2017). The replacement of the SLAG scheme with the Land Redistribution for Agricultural Development (LRAD) grants in 2001 was viewed as having shifted policy focus in land reform projects towards the establishment of a class of black commercial farmers (Hall and Ntsebeza 2007). This coincided with the democratic state’s desire to economically empower blacks through the Black Economic Empowerment programme – a programme often criticised as elite-oriented (Tangri and Southall 2008). LRAD grants required land beneficiaries to make personal contributions, monetarily or in the form of labour, in order to receive grants for purchasing the land. The policy was later replaced with the current PLAS policy.
Hall and Kepe (2017) observe that the redistribution process emphasises the criterion of commercial viability that is enforced by state officials, consultants and agribusiness strategic partners. Commercial viability was used by the apartheid state to maintain large farms for whites (van den Brink, Thomas and Binswanger 2007), and enforced through the Subdivision of Agricultural Land Act 70 of 1970, which restricted subdivision of agricultural land. State officials at the time argued that ‘farms should not be allowed to decrease in size below the so-called viable size’ (Ibid., 170). Although state ownership of land under PLAS creates precarious tenure for the beneficiaries (Hall and Kepe 2017), officials’ interference is extended to all project types such as SLAG and LRAD (Rusenga 2017). Fundamentally, the government is interested in creating a class of black commercial farmers through land reform, as argued in the RADP (DRDLR 2013a).
While Aliber and Cousins (2013) have argued that the fundamental problem affecting land reform in South Africa is the state’s stubborn commitment to the large-scale farming model, the government attributes the limited success of many land reform projects to, among other things, a lack of adequate and appropriate post-settlement support (Ibid.). The differential diagnosis of what constitutes the major challenges affecting land reform shows how complex the situation is – and it is true that inadequate post-settlement support does affect the land reform projects (Anseeuw and Mathebula 2008), and that providing post-settlement support to the beneficiaries will go a long way in helping improve production capacity. However, there seems to be less attention paid by the government to the implications of enforcing large-scale production in the projects.
Despite concerns raised about large-scale forms of production in many projects (Lahiff, Davis and Manenzhe 2012; Hall and Kepe 2017; Rusenga 2017), the government has intensified the implementation of the agribusiness model instead of changing it. Through the RADP, the government promotes mentorships and strategic partnerships with the end goal of improving beneficiaries’ production capacity. The anticipation is that mentors and strategic partners, who are mostly white commercial farmers and/or agribusiness companies (Hall and Kepe 2017), will transfer production skills to beneficiaries and facilitate access to markets and resources (Nkwinti 2010). In fact, the beneficiaries are required to accept partners for them to receive post-settlement support through the RADP. With strategic partners empowered through the RADP to plan and implement business plans, land beneficiaries have little control over decision-making where joint ventures are implemented (Lahiff, Davis and Manenzhe 2012). The strategic partners know no other way of using land except large-scale forms of land use – hence they play an important role in enforcing large-scale farming. The conditions set by the RADP ensure that even where beneficiaries have better tenure security, such as in SLAG and LRAD grants, they should use land in ways preferred by the government in order to access support. The implication, therefore, is that the government aims to improve livelihoods and incomes through large-scale farming.
The agribusiness model is the current and dominant model of agrarian capitalism which emerged towards the end of the twentieth century (Abbey, Baer and Filizzola 2006), and it is that model which is being imposed on grant beneficiaries. The model organises agricultural production largely in the form of monoculture on an ever-increasing scale, with the intensive use of agricultural machinery, toxic chemicals and genetically modified seeds (Stedile and León 2014). Internationally, the model is driven by agribusiness and international capital facing crises of accumulation which view agriculture in the global South as an attractive investment in the long run (McMichael 2011) – especially after the food price crisis of the first decade of the twenty-first century (De Schutter 2011). Where land is acquired, normally large agricultural systems are implemented. In South Africa, agriculture is dominated by a decreasing number of wealthy farmers and agribusinesses, with some extending their influence, and even control, to land reform projects through joint ventures facilitated by government policy. For Kepe and Hall (2018, 133), the South African land reform strategies consolidate control of the land and means of production in the hands of whites, black elites, corporate and even multinational capital – hence we are living in an era of the agribusiness model. Agribusiness also controls upstream and downstream agricultural activities.
Are we dismissing the agribusiness model as being without merit? And can it work for some producers? Internationally, there is a view that the model works for large producers. The argument is that agribusiness and international capital have advanced know-how and access to technology which enable them to produce efficiently on a large-scale (Economist Intelligence Unit 2010). For the World Bank (Deininger and Byerlee et al. 2011), large agricultural systems can access cheaper global lines of credit to finance agricultural expansion and production, as well as overriding market imperfections to increase production and job creation. It seems the model is largely seen to work for big producers with access to capital and sophisticated technology which many land beneficiaries in South Africa lack. However, its cost implications do suggest that many beneficiaries who operate in an environment of limited post-settlement support will struggle with large-scale production (Mafeje 2003).
Another dimension to the argument is offered by Bernstein (2007), who locates his contribution to the debate in the context of agriculture’s contribution to industrialisation and the economy. His argument is that where the capitalist social property relation was established through destroying pre-capitalist landed property and its predatory appropriation of rent, there is no rationale for redistributive land reform (Ibid., 38). If that has delivered the ‘anticipated productivity gains, any notion of redistributive land reform that advocates the division of larger, more productive enterprises (capitalist and/or rich peasant farms) into small-scale (family) farms is ipso facto both reactionary and utopian’ (Ibid.). Bernstein sees large forms of agrarian production as efficient and does not believe that redistributive land reform focusing on small farms can contribute significantly to poverty reduction. His views are informed by the belief that what he calls the ‘agrarian question of capital’, that is, agriculture’s contribution to industry, has been resolved because the transition to capitalism has occurred globally despite the challenges in the global South. For him, what we have now is the agrarian question of labour created by capitalism’s inability to absorb labour. Against that backdrop, land acquires a new significance even though it cannot contribute much towards industrialisation. In sum, Bernstein sees agriculture as better organised along large capitalist forms of production. It should be clear, though, that he is not arguing that land beneficiaries should use land for large-scale production.
While in principle agribusiness and big international capital can produce on a large scale, questions have been raised regarding the model’s suitability for many black Africans. For Mafeje (2003), one should think about how poor producers would override the higher costs associated with large-scale production. Large farms require more capital resources to improve productivity, whereas modest investments are needed for small-scale farms (International Fund for Agricultural Development [IFAD] 1992, cited in Mafeje 2003). As far as the poor are concerned, for Mafeje they will produce better in the small-scale model because it is less costly and more suited to their capabilities and limited resources. Central to his argument is that ‘there is more than one way to agricultural and rural social development’ (Mafeje 2003, 1). He calls for the need to recognise plurality as opposed to notions of ‘universalism’, which he regarded as a ‘Eurocentric’ way of understanding Africa and its people.
Indeed, the study by Hall and Kepe (2017 – see also Kepe and Hall 2018) in the Eastern Cape province of South Africa is quite revealing. While focusing on PLAS projects only, it confirms the government’s preference for the agribusiness model – with agribusiness brought in as strategic partners to the beneficiaries. The beneficiaries get sidelined for their failure to produce at the level expected by the government. Consequently, the authors observed, ‘beneficiaries often find themselves as simply labourers on the land they were supposed to hold as primary beneficiaries’ (Kepe and Hall 2018, 134). For that reason, the authors argued that land reform under PLAS exhibits a colonial present rather than being a decolonising experience. While the preference of agribusiness as producers on large, unsubdivided farms is acknowledgement by the government that such a model is not suited to the beneficiaries, it also demonstrates the notions of ‘universalism’ rejected by Mafeje (2003).
The above shows how nuanced the situation is. The agribusiness model can work for those with abundant resources, despite its huge costs. They can even afford to mechanise on a large-scale, a development that undermines job creation (Atkinson 2007). This means that farmers’ differential levels of capability give them different abilities with regard to the scale at which they can produce on their farms – making the call for plurality important (Mafeje 2003). What is clear from studies, though, is that many land beneficiaries are operating in contexts of limited post-settlement support and are less successful when producing using large-scale methods of production (Lahiff, Davis and Manenzhe 2012; Rusenga 2017). Against that backdrop, some scholars have argued that many beneficiaries can succeed within the small-scale model (Aliber and Cousins 2013; Cousins 2013, 2015).
While there seems to be no evidence supporting the success of beneficiaries through an agribusiness model, findings in Zimbabwe do suggest that beneficiaries can improve their livelihoods and incomes through small-scale production. Scoones et al. (2011, 978) noted that ‘compared to the small-scale farmers on the A1 schemes where intensive mixed farming has taken off, the A2 farmers [on relatively larger farms] have found the establishment of new farms much more difficult.’ The authors stated that because of the larger areas they held, A2 farmers struggled to get the required equipment, labour and adequate financial investment to establish their agricultural enterprises. In the A1 projects, ‘investment in stock has been significant, with cattle populations in particular growing rapidly’ (Ibid., 982). Additionally, most land was being cultivated in the A1 sites while in the A2 sites there was much less intensive land use.
Thus, as noted by Mafeje (2003), not only is production on small farms improved through limited investments. Small farms are also suited to the capabilities of most of the rural poor. Both A1 and A2 farmers operate in the same difficult economic environment with some A2 farmers, in fact, having better access to resources through their political connections. But it is the A1 farmers who are generally successful through investment of household income, including off-farm resources. Indeed, the investment of household off-farm income in agriculture is a dominant mode of agricultural organisation among black Africans, with a long history (Ncapayi 2013; Mabandla 2015). In the context of limited external post-settlement support in South Africa, and indeed other parts of Africa, poor beneficiaries could produce better in the small-scale model given its limited cumulative production costs as argued by Mafeje (2003), and demonstrated by the Zimbabwe situation. This article now presents a case study that demonstrates the constraining effects of the agribusiness model on land beneficiaries without abundant production resources in the context of land reform in South Africa. The main point is to highlight how the agribusiness model negatively affects the beneficiaries, without generalising that their experience has universal application.
Project description and beneficiaries’ profiles
The project under consideration is the Elangeni project, which was owned by the Elangeni Family Trust until the farm was sold in 2018. As noted by Mr Mooketsi of the Limpopo Department of Agriculture’s Tzaneen office, because LRAD beneficiaries have title deeds they can sell their farms, unlike those owned under PLAS.1 He said: ‘they have title deeds. If you have title deeds it means the farm belongs to you. You can sell it at any time you want’ (personal interview, 3 July 2020).2
The farm is 165 hectares in size (DRDLR 2011). It is located in the Deerpark area, about 15 kilometres north-east of Tzaneen. The farm has approximately 10,000 mango trees on 17 hectares, and about 3000 avocado trees on 10 hectares (Elangeni Family Trust 2013b), and the beneficiaries introduced organic vegetable production on four hectares of the farm. About 130 hectares of grazing land had never been used because the beneficiaries did not have livestock (Elangeni Family Trust 2013c). When the beneficiaries occupied the farm in December 2007, there were two thatched houses but these were destroyed by fire in 2008. Fixed structures on the farm included two sheds, one storage facility, two fowl runs, a borehole and two small earth dams. No movable assets were bought with the farm.
The Elangeni Family Trust submitted its application for a farm under LRAD terms on 15 October 2004. The application was approved by the District Screening Committee on 13 June 2005 and by the Department of Rural Development and Land Reform (DRDLR) on 5 May 2009, before the farm was transferred to the beneficiaries on 18 December 2009 (DRDLR 2011). However, Sophie M.3 stated that between October 2004 and December 2007, when the beneficiaries first occupied the farm under PLAS terms, the beneficiaries were searching for a farm without success. Because LRAD was demand-driven it was the beneficiaries’ responsibility to search for the farm that suited their needs (Victor M., personal interview, 22 May 2013).4 Some prospective farms were already subject to land claims: the government does not buy any land that is subject to a claim under the land restitution programme (Mr Malatjie,5 personal interview 2 July 2012). Some farms were isolated, and the beneficiaries feared for their safety.
In 2006, the beneficiaries handed over the task to a provincial official of the DRDLR based in Polokwane. In December 2007, they received a call from the DRDLR in Polokwane instructing them to go and view a farm in the Deerpark area of Tzaneen. Sophie M. said:
I was surprised when the people from the DLA [the Department of Land Affairs, before it became the DRDLR] called me. They said there is a certain farm in Deerpark. The white farmer was growing fruits and rearing cattle. ‘Go and see it and tell us what you think about it.’ We came here. We drove here with my husband. Would you say you are not interested? We viewed it and saw that food was there and we could work here. So, we told them that we wanted it. We completed the forms. In December [2007] they transferred the farm to us. (Personal interview, 18 July 2012).
Although the beneficiaries had better resources (see profiles below) compared to most land beneficiaries, the three years they took to get a farm shows that asking applicants to search for the farms in the competitive land markets is not effective. The farm, which was already registered in the name of the state, was leased to the beneficiaries in December 2007 before the title deed was transferred to them in December 2009 (see Table 1).
The farm transfer process from private ownership via government to beneficiaries.
| Previous title | Previous owner | Transferred to | New title | Amount (rand) |
|---|---|---|---|---|
| T27403/2000 | Aanbreek Beleggings (Pty) Ltd | National Government of the Republic of South Africa | T17232/2007 | 2,150,000 |
| T17232/2007 | National Government of the Republic of South Africa | Elangeni Family Trust | T82954/2009 | 2,150,000 |
Source: DRDLR 2013b.
The government had bought the farm from Aanbreek Beleggings (Pty) Ltd in 2007 for R2,150,000. The Deeds Register shows that the farm was then transferred to the Elangeni Family Trust for R2,150,000 in 2009. Thus, the Elangeni Family Trust leased the farm between December 2007 and December 2009. Sophie M. said:
During that time, they would transfer it [the farm] to the government. We were leasing from them. They first gave us one year, then six months and then three months. We thought they were now taking the farm away from us, yet they were processing the transfer of the farm to our names. (Personal interview, 18 July 2012)
The Elangeni Family Trust had nine members – Sophie M., her husband Samuel M., their six adult children and her late mother, Granny Alina. While Sophie and Samuel were retired teachers on pension, all their children except for one, a pastor in a ministry in Johannesburg, were salaried professionals in the cities. Their professions included tax lawyer, marketing manager, bank official, auditor and chartered accountant. Because they were based in the cities, the children were not physically involved in the project. Their involvement was through ideas and financial contributions to the operations of the project. The children constituted themselves into what they called the Task Team. The Task Team forum had two main purposes. It brought the children together and allowed them to discuss matters related to the project – matters that may have been submitted by their parents who were operationally based at the farm as managers in their absence. The Task Team also mobilised resources, including finances, mostly through contributions from their salaries into a fund used to support production in cases where the farm could not sustain itself. They also invested their pension money in the farm operations. All members were equal and decisions were reached through consensus. Off-farm income was an important component of production funding at the project. The profiles of the beneficiaries demonstrate that they did not have a background in agriculture, let alone sophisticated large-scale, capital-intensive production.
The idea of purchasing a farm stemmed from Sophie's desire to expand her small fruit and vegetable shop at Mooketsi near Tzaneen, established after she resigned from teaching in 1999. While conducting that business, ‘an idea struck her that she needed to acquire a piece of land in the form of a farm’ to grow her own products (Elangeni Family Trust 2013b). Unlike many applicants elsewhere who were mobilised by landowners, former employers, other applicants (Songelwa 2009; Aliber et al. 2013) and rural organisations (Ncapayi 2013), her motive was to expand her business and generate income. Initially, Sophie wanted a joint venture with her local female pastor, but they were discouraged from buying the farm jointly by the DRDLR. Instead, they were advised to mobilise their family members. It would seem that the Department wanted to avoid the problems associated with group projects (Hall and Ntsebeza 2007). This is the background that led to the formation of the Elangeni Family Trust consisting of household members.
Implementation of the agribusiness model at Elangeni
The agribusiness model was enforced particularly during the period when beneficiaries leased the farm from the DRDLR. They initially occupied the farm as tenants of the government before the farm was transferred to them in December 2009. As shown by Hall and Kepe (2017), PLAS allows the government much leverage to enforce, if not to dictate, its desired land use patterns on beneficiaries who have less decision-making power as a result of their lack of title to the land. The government influenced the land uses through farm inspections during the lease period. Inspections, carried out by both DRDLR and Limpopo Department of Agriculture officials, were aimed at determining whether the beneficiaries qualified to get the farm. Sophie M. explained:
The government officials used to come in numbers … They asked what we use to clean our farm. We told them we hire people to help us. They asked where we get the money to do this. We told them we use our own personal money. We use our pension money. They were writing the reports. One day we had a workshop in Polokwane. I met Victor M. and he asked whether they had given me the farm or not. He said I qualified to get that farm … He said: ‘You will get the farm. We have given our superiors the reports.’ (Personal interview, 12 June 2013)
As revealed by Victor M. below, the inspections by state officials were also aimed at ensuring the implementation of the agribusiness model at the project:
Once someone is there you would want to up production on the farm. But where a farm has actually been on a commercial basis before transfer, we would like to maintain that standard, the commercial basis. (Interview, 22 May 2013)
Mr Malatjie of the Limpopo Department of Agriculture (Tzaneen) concurred with Victor M., arguing that the beneficiaries should maintain the agribusiness model at the farm:
They are running commercial farms. That is why we try to appoint the people who are skilled. The most important thing is to establish the international market because, depending on the quality of the farm produce, say you are producing bananas and mangoes, you must produce quality. (Personal interview, 2 July 2012)
The various government agencies prefer the continuation of large-scale production in the projects. Mr Malatjie was unequivocal in his belief that the beneficiaries should also produce for the international markets. To achieve that goal, in 2008 the Department of Agriculture, Forestry and Fisheries nominated Sophie M. to undergo training with the South African Agri Academy in Cape Town. The training focused on EU fruit and vegetable markets, in particular export and market readiness for emerging black farmers, showing that beneficiaries need sophisticated technical skills to succeed within the agribusiness model.
Because the government held the title to the land during the lease period, the officials had more say in what, and how, beneficiaries were to produce. The tenure insecurity of the beneficiaries was exploited by government officials to impose the land uses they preferred. This kind of tenure insecurity may generally discourage beneficiaries from investing their resources. Indeed, the statement below by Sophie M. confirms the conflict between beneficiaries’ and state officials’ land use preferences. She said:
Since the farm was transferred to our names, we have not seen them bothering us again. The farm is now registered in our name, so we do whatever we want. We are the farmers and have a title deed for the farm. (Personal interview, 18 July 2012)
The title deed provided more perceived tenure security than did the lease contract. Beneficiaries tactically exploited the security provided by the title deed to limit officials’ interests and influence on the project. Workshops and advice from government agencies were questioned and evaluated based on possible expected gains before participating. For instance, in 2013, beneficiaries refused to attend a workshop organised by the DRDLR (Polokwane) on the RADP. Sophie M. said:
If someone tells me that they want me to attend a workshop, I want to know what they will be teaching us. Because if they want to spend government money, they take us and spend days with us so they get something. They will remain with the balance or maybe they agree with the caterer. I just refused to attend a workshop organised by the DRDLR. They called and said they were inviting us to a workshop in Polokwane. They gave us the date. Mr Samuel M. asked them what the workshop will be dealing with. They said it was about the recapitalisation and development programme. We did not go. (Personal interview, 3 June 2013)
The title deed emboldened the beneficiaries to make decisions even contrary to those that the government officials preferred. However, their decisions did not affect the entrenchment of the agribusiness model at the project. By design, the project’s capital-intensive, subtropical fruits meant that it was difficult to change the inherited land uses. The beneficiaries introduced small-scale farming of organic vegetables on four hectares, alongside the large-scale production of mangoes and avocados.
Cost implications of large-scale production
Farm purchase and equipment costs
The problems with the agribusiness model are not limited to the cost dynamics associated with the scale of production. They start with the cost of acquiring large farms. For instance, while the Aanbreek Beleggings (Pty) Ltd purchased the farm for R325,000 in 2000, it sold it to the government of the Republic of South Africa for R2,150,000 (DRDLR 2013b), excluding movable assets – almost seven times more than it paid for it. It is not clear what improvements were made to the farm during those seven years. However, the price hike seems to confirm Andrews’ view that the government pays extremely high prices for the farms (Andrews 2007). More importantly, this shows that a land reform programme predicated upon the purchase of large, unsubdivided farms and transfer of such to beneficiaries is very costly, even for the government. As a result, this affects the pace of land redistribution in South Africa.
Apart from the purchase price for the farm, the DRDLR provided the beneficiaries with a ‘balance’ grant of R500,000 in 2011: the balance of the grant is the money that remains after the cost of the farm has been subtracted from the total allocated grant. In 2012 the beneficiaries successfully applied for a grant worth R350,000 from the Department of Trade and Industry (DTI) under the Cooperative Incentive Scheme (CIS). While the state has spent R3,000,000 in total at Elangeni alone, which others can argue is substantial support to the beneficiaries, 72% of that sum went towards the purchase of the farm alone – hence the argument that land reform based on the agribusiness model is very costly even for the state. It can be argued that subdivision of farms can lower the cost of purchase, such that the R3 million spend at the Elangeni project alone may have supported many other beneficiaries and livelihoods.
The problem associated with higher costs was exacerbated by the decision of the government to spend the balance of the LRAD grant and the DTI grant on expensive farming equipment – including a tractor that cost R400,000. Even the grant from the DTI was restricted to the purchase of additional farm equipment: at the time of data collection in 2013, the beneficiaries had spent around R100,000 on additional farm equipment (see Table 2 for a comprehensive list of equipment at the Elangeni project).
Production equipment at Elangeni.
| Equipment | Source of funding | No. of items | Cost in rand (2018)a |
|---|---|---|---|
| Jojo water tank | CIS grantb | 2 | 10,000 |
| Knapsack sprayer | CIS grant | 1 | 690 |
| Three-disc plough | CIS grant and balance of grant | 2 | 40,000 |
| Ridge | CIS grant | 1 | 12,000 |
| Brush cutter | CIS grant | 2 | 4800 |
| Home light pruning machine | CIS grant | 2 | 7000 |
| Trailer (2-tonne) | CIS grant | 1 | 3000 |
| Harrow (18-disc) | CIS grant | 1 | 23,000 |
| Grader (tractor-pulled) | CIS grant | 1 | 30,000 |
| Cultivator | CIS grant | 1 | 12,500 |
| Boom sprayer | Balance of grant | 1 | 400,000c |
| Bakkie | Balance of grant | 1 | 15,000 |
| Tractor | Balance of grant | 1 | 15,000 |
| Slasher | Balance of grant | 1 | 70,000c |
| Total | 18 | 642,990 |
Source: Personal interviews with Sophie, and author’s photo archive.
The 2018 price estimates were acquired from Makro and Farmworld in South Africa; b CIS – Cooperative Incentive Scheme; c Prices confirmed by Sophie M. in 2013.
The above-mentioned support was important for the beneficiaries’ production. However, its impact could have been greater had the resources been used differently. For instance, they could have bought a second-hand tractor, leaving plenty of money to cover other costs. While R850,000 was available after the farm purchase price had been subtracted, the beneficiaries had limited power to determine how the funds could be used. Thus, it can be argued that had less costly equipment options been used, more resources could have been left to support production. In the absence of external material support, the beneficiaries relied more on their off-farm resources which they invested in the project. However, because of the higher costs associated with producing on a large scale, their off-farm income was woefully inadequate.
The R850,000 accorded to the Elangeni project is highly inadequate considering that the main activity at the project is capital-intensive subtropical fruit production. This project is in fact one of the fortunate ones to receive that level of support, which many other projects in the country have not received (Aliber et al. 2013) – but the fact that beneficiaries were given a project that required them to invest so much of their resources in farm equipment alone demonstrates the unsuitability of a land reform model based on large-scale farming. Where beneficiaries lack access to state funding, they are likely to struggle to make their large farms productive due to challenges with resources (Anseeuw and Mathebula 2008). This makes the call for support for the small-scale model more important, given its limited cumulative production costs (Mafeje 2003).
Production costs for subtropical fruits
The Elangeni project produced the Tommy Atkins and Sabre mango cultivars and the Fuerte avocado cultivar (Elangeni Family Trust 2013c). As noted above, most operational costs at the project were funded through off-farm income contributed by the project members. Because large-scale production is capital-intensive (Mafeje 2003), the beneficiaries’ off-farm income was inadequate to support production. The impact of limited funding was that the quality and quantity of products was affected. We will return to this point later. Let us first demonstrate the cost of production and its implication for the ability of the beneficiaries to succeed.
Table 3 illustrates the cost of producing one hectare of avocados. The data are based on the cost projections data from the South African Subtropical Fruit Growers’ Association (Subtrop). The data were for the 2015 production season. The production cost projections in Table 3 are for avocado trees that have reached maturity age, produced at a commercial level. The table includes the fundamental activities that are necessary when producing avocados for commercial markets – such as labour, disease and pest control, and harvesting.
Production cost projections for avocado cultivation.
| Activity | Cost per hectare (rand) | Total cost for 10 hectares of avocados (rand) |
|---|---|---|
| Labour | 9145.08 | |
| Tractor and transport cost | 1224.81 | |
| Disease and pest control | 11,679.85 | |
| Fertiliser | 4295.11 | |
| Pruning and plant growth regulation | 580.00 | |
| Harvesting | 4650.84 | |
| Total | 31,575.69 | 315,756.90 |
Source: Adapted from Subtrop’s avocado production costs (Subtrop 2020).
With R31,575.69 estimated as the cost of producing one hectare of avocados, it means that in the 2015 season the beneficiaries needed R315,756.90 for the 10 hectares of avocados at the project (Subtrop 2020). The project also had 17 hectares of mangoes. The production costs per hectare of mangoes are a little more than those per hectare of avocados (Andre B., telephone interview, 25 June 2020).6 For instance, a hectare of mangoes has more trees [476] (Subtrop 2013) than a hectare of avocados [203] (Subtrop 2020), making costs such as pruning higher on mango orchards. If the marketing costs, estimated at around R46,000 per hectare (Ibid.) are added, the production costs can be very steep. However, Elangeni avoids a huge marketing bill as the fruits are primarily supplied to local markets – Achar Processors for mangoes, and hawkers for avocados (Elangeni Family Trust 2013a).
The above figures raise questions regarding the feasibility of a land reform based on the agribusiness model. How many land beneficiaries can afford such production costs, with many operating in contexts of limited external support? Most beneficiaries are struggling to succeed with this model (Lahiff, Davis and Manenzhe 2012; Aliber et al. 2013). However, different interpretations are given regarding the challenges in the land reform projects. Some, like Mr Mooketsi, attribute the problems in most projects to beneficiaries’ lack of interest and passion for farming, among other factors. He said:
You know farming is not a place where everybody can come without interest. I realise that most of the people who are dealing with land reform do not have passion and so on … . There are many farms that were bought through SLAG and LRAD. The ones that are much better are the PLAS farms. With the PLAS farms it means that the farm does not belong to you. Most SLAG and LRAD farms have been sold. (Personal interview, 3 July 2020)
Others view the challenges in the projects as confirmation that land transfer to black Africans is bad for the economy. Thus, the government’s continuing with land reform is thought to be a product of the African National Congress’s refusal, for political reasons, to acknowledge the disruptive economic effects of land reform.
Even in terms of labour, large-scale production requires more manpower. On average, there were eight ‘permanent’ farm workers on the project throughout the year, including Sophie M. and her husband Samuel.7 About 20 seasonal workers were brought in during the mango and avocado harvests. However, the eight workers were not able to maintain the 27 hectares of mangoes and avocados. After the purchase of the tractor and other farm implements in 2011, Samuel used the tractor-pulled slasher to weed the grasses between and under the fruit trees. Without adequate funds to cover the costs, the beneficiaries struggled to weed the whole farm. That affected the farm’s ability to satisfy standards such as those of Global GAP that emphasise clean production environments (Mr Moses,8 personal interview, 16 August 2013).9
The risks associated with overgrown orchards include the quick spread of veld fires. Indeed, in August 2012 Elangeni suffered a severe veld fire that burnt mango orchards (Blocks 1, 4, 5, 6 and 7), the water pump, irrigation pipes, and the electricity meter box, thereby also affecting vegetable production (Elangeni Family Trust 2013a). The inferno lasted six days. This was the second veld fire since 2007, when they first occupied the farm. The first fire, in September 2008, consumed two thatched farmhouses and a portion of the farm without orchards. Sophie M.’s mother nearly lost her life in that fire. Veld fires may affect any farmer, but the inadequacy of weeding has increased the impact of their damages at the Elangeni project. The limited effect of off-farm income in large-scale production made the orchards vulnerable to veld fires.
Indeed, many activities are affected by the high costs associated with large-scale production. The beneficiaries struggled to undertake adequate pruning of their orchards. The pruning process enables sunlight penetration and leaf and flower development (Pittaway 2002). Pittaway (Ibid., 17) has shown that most flowers occur on one-year-old bearing branches, with older ones bearing less. Furthermore, the mixed shoots that bear a few flowers and many leaves ‘produce and hold the greatest percentage of fruit to maturity’. Pruning 13,000 trees at Elangeni required more resources. Although a hectare of avocados cost less to prune (R580 in 2015, Subtrop 2020) than a hectare of mangoes (R1150 in 2006, Subtrop 2013), the overall pruning budget is higher. For orchards such as those at Elangeni, which had gone for years without proper pruning, the costs could be higher. Whether capital-intensive or labour-intensive, pruning 13,000 trees requires a lot of money (interview with Samuel M., 15 August 2013), and the family’s off-farm income was not adequate to support large-scale fruit production.
The production challenges affected output at Elangeni. According to Marius P., the fresh fruit procurement manager at one of Elangeni's markets for mangoes, Letaba Citrus Processors, the average commercial yield projection for one hectare of mangoes is between 25 and 30 tonnes of mangoes (personal interview, 27 August 2013). His projections are backed by Subtrop’s yield assumptions data for commercial mango farms, which show a peak yield of 30 tonnes per hectare (Subtrop 2013). It is likely that Marius P. and Subtrop made their projections using data on well-resourced commercial farms. While the beneficiaries’ circumstances make it difficult to compare them with wealthy commercial farmers, the output and income data for Elangeni make a strong case that beneficiaries were not successful when using the agribusiness model. For instance, in the 2008 to 2009 mango season their farm record book showed that 40 tonnes of mangoes were marketed to Achar and juice processors from their 17 hectares. The avocado output was also significantly lower (at less than 3 tonnes per hectare) than the projected 15 tonnes per hectare for the Fuerte cultivar (Subtrop 2020). The farm book showed many instances where beneficiaries recorded sales without indicating the amount of produce marketed. Nevertheless, the beneficiaries were not successful in large-scale subtropical fruit production.
Conclusion
This article has challenged the feasibility of enforcing an agribusiness model promoting large-scale production in projects owned by beneficiaries possessing limited resources. The high costs of large-scale production negatively affect the ability of those beneficiaries without abundant resources, including those relying largely on own resources such as off-farm income. Using the case study of the Elangeni project, the article has demonstrated how the beneficiaries’ capital was inadequate, thereby affecting their ability to produce and improve their livelihoods. Thus, a land reform programme based on enforcement of large-scale production on projects owned by resource-poor beneficiaries has limited impact on their livelihoods (Hall and Kepe 2017). Indeed, as argued by Kepe and Hall (2018) such a land reform entrenches coloniality rather than decolonisation. Against that backdrop, the experiences of the Elangeni project make a strong case for the exploration of alternative models such as the small-scale model whose limited costs (Mafeje 2003) can facilitate production. Thus, the findings by Scoones et al. (2011) in Zimbabwe, where A1 farmers had better success than A2 farmers, potentially points to the feasibility of the small-scale model. Actually, because of the limited costs, the small-scale model can be even cheaper for the state to provide post-settlement support in that domain.