Neoliberals capture South African smallholder farmer support policy

Ideological and factional divisions and contradictions between neoliberals, ‘patrons’ and progressives have manifested in South Africa’s smallholder farmer support policy. This was evident at a national stakeholder consultation held by the Department of Agriculture, Forestry and Fisheries (DAFF) in April 2019.

The policy is meant to support marginalised producers. But it has been thoroughly captured by neoliberals under the banner of the National Development Plan (NDP). The Agricultural Policy Action Plan (APAP) – which is based on the NDP – lists focus crops and products defined by commercial potential, with emphasis on global competitiveness, export markets, value chain integration, and public-private partnerships. In this framework, state and capital work closely to reproduce capital-intensive production models.

This is very far from responding to the priorities of farmers the policy is meant to be supporting. In the draft policy, 85% of the funds are to be allocated to smallholders and household producers. Smallholders are defined as anyone with turnover/sales of less than R1 million per year (down from R5 million in earlier drafts). Households are defined as those with turnover/sales of up to R50,000, and there is a category of vulnerable households, such as child-headed households. The other 15% of the budget is to be allocated to medium scale commercial producers (R 1 million-R 10 million turnover). Nevertheless, large-scale commercial farmers will take a bite from smallholder funds through the allocation of drought relief for large scale commercial farmers to this budget.

There are an estimated 2.4 million smallholder farmers and food-producing households in South Africa, according to the most recent surveys. These producers mostly generate a very small amount of income from farming. Even a turnover of R1 million is not that much. If we divide by 12 it gives around R83,000 per month in sales. Costs must then be deducted. Even at a generous 10% income after costs to turnover/sales, this works out to around R8,300 in income per month before any expenses beyond the business (e.g. education, health care, services) are paid. This amount is the top end of the smallholder category, and the category goes all the way down to a turnover of R50,000 per year, which allows for very small income retained after costs. Very few of these producers are seeking the type of capital intensive support put forward by the neoliberals.

The resource allocations are positive. However, the commercial, value chain integration model that has invaded this space does not belong here, but rather within a separate medium and large scale producer policy. It is disheartening to see a commercial business model being imposed in a very rigid fashion onto smallholder farmers and household producers. Throughout the policy are calls for an enabling environment for the private sector, the insistence on a secured role for agribusiness and commercial agro-dealers (those who provide multinational inputs to smallholder farmers), and the whole framing of “farming as a business”. Everyone who gets support must have “bankable” business plans (with only the most vulnerable exempted). Why is this “innovation” so much celebrated when the commercial business plan model is a complete failure for smallholder and resource-poor food producers? There is nothing wrong with assisting smallholder farmers and household producers to develop production plans. But this can be an iterative process with extension support, which is not at all the same as a business plan that demands commercial profitability from resource-poor farming communities in the short term.

The policy is riven through with neoliberal prescriptions of this sort. It is difficult not to conclude that this is a deliberate hijacking of the policy to channel resources from smallholders into commercial and corporate pockets. Financial support is based on “blended” financing – a grant combined with a private sector loan – and it appears this model will be applied to all those who receive direct support, with only a few exceptions for the most vulnerable. In other words, smallholder farmers and household producers must take out interest-bearing loans in order to receive direct public sector support – a recipe for indebting smallholder farmers. This completely unjust imposition is in line with the neoliberal approach of privatising public support, as well as cannibalising this support to direct wealth into corporate coffers – in this case, the banks.

Record keeping is obligatory for recipients of financial support, including production records and financial statements to “prove” profitability and productivity. Many smallholder farmers and household producers do not even have bank accounts, especially at the lower end of the spectrum. Elsewhere, the policy makes statements aimed at restricting the impact of land redistribution on the prevailing agrarian structure. The list goes on. These onerous, neoliberal requirements will effectively exclude the majority of smallholder farmers and household producers for whom this policy was originally meant. It comes across as deliberately cruel in its disregard for the actual conditions people are living in. But then again cruelty is one of the ugliest features of contemporary capitalism globally.

The commercial business model being imposed by the neoliberals on these marginalised households does not belong here. That model is geared towards medium and large scale commercial producers who seek credit and have a clear commercial market in mind, and the technical capability to meet the consistency, volume and quality requirements of these markets. Support to those farmers should be left to the private sector as part of commercial black economic empowerment (BEE) diversification requirements.

Neoliberals and ‘patrons’ (in reference to those who lead and feed patronage networks) are closely aligned. They agree on the commercial model and the channelling of resources to those at the top end. Where they differ is on how to divide the spoils. The South African economy is still 70% owned by the old white economic oligopolies from apartheid times who, since apartheid, have multi-nationalised their operations and siphoned wealth out of South Africa. This closed and tightly controlled economic space is difficult to break into, hence the use of state resources to do so. There can be legitimate forms of this e.g. BEE for the commercial sector, state support to black enterprise, or preferential public procurement. But these also merge into patronage networks where the connected form a tight circle and share public resources between them, to the exclusion of others.

The national consultation held in Ekurhuleni was an eye-opener in revealing the networks between the ANC, DAFF and black medium and large commercial farmers. While aspiring black commercial farmers were calling foul for not being included in the circle, the debate was far from the needs of the majority of marginalised smallholder farmers and household producers the policy is meant to be targeting. And though some NGOs and smallholder farmers were present their capability was limited and the opportunities were few to make decisive inputs.

In the commission I attended, there was a strong coalition of what appeared to be DAFF officials, commercial black farmers, and party members, who sought to quash debate and get participants to rubber stamp the policy without discussion. Longstanding relationships have cemented the policy in this way. An indicator of the extent to which patronage networks have become the norm was during a discussion in the same commission about the length of time the state should provide support before stepping away. One woman stood up and, without any indication that there was anything wrong with the statement, said: “It must be five years, because that is how long one government is in power. So while we are there, we must eat! The next people will come after us”.

Despite this apparently hopeless situation, there are glimpses of social and ecological dimensions coming through in the draft policy, as a kind of advance guard. Elements within DAFF are sympathetic to the smallholder narrative, and want to make efforts to build and strengthen this vision and the practices accompanying it. A major victory in the policy (so far!) is the allocation of most resources to smallholder farmers and household producers. But the contradiction between this and the commercial model will hamstring implementation in their interests.

A number of useful statements are included in the latest draft, though the policy will still be subject to change following the national consultation, and one fears what else the neoliberals will do to strip the policy of any progressive content. But for now, there is a strong emphasis on ecology and biodiversity, albeit fragmented and sometimes in contradiction with the neoliberal prescriptions. For example, there is a contradiction between stated aims of climate change response, including reducing greenhouse gas emissions, on the one hand, and the push for mechanisation and use of synthetic fertilisers on the other. The latter make a large contribution to greenhouse gas emissions from agricultural production (including in their own production and input use).

Biodiversity conservation, adaptation and use, and agroecology are named amongst the objectives of the policy. Policy statements favour research on agroecology, soil health, healthy and resilient farming systems, through participatory on farm research; and the exclusion of herbicides or synthetic fertilisers in the definition of environmentally friendly conservation practices. The policy adopts participatory research and extension, farmer to farmer extension such as farmer field schools, and an increase in public investment in research and extension, and promotes decentralised research and training centres, incorporating extension and farmer to farmer learning. The role of producers is defined as active participation in peer to peer learning and sharing, biodiversity conservation and use, elaboration and adaptation of indigenous knowledge, soil and water conservation and landscape maintenance.

On markets, although the overall framework imposes commercial value chains as the primary market, preferential public procurement is included in numerous places. The policy commits national, provincial and local government to 30% food procurement targets from smallholders, with specific reference to the Preferential Procurement Framework Act of 2000. It includes strengthening public procurement from producers for upstream input production (e.g. seed for government support programmes). This is a positive advance over earlier drafts. However, local and informal markets are almost entirely ignored in the policy, with just a few places where they have found a way in.

Despite inclusion of these positive statements, they are subordinated within the overarching commercial framework. Every decision to provide direct support will be made on the basis of a grant application accompanied by a “bankable” business plan and proof of historical finances. This alone suggests direct financial support to farmers may not be easily available for a large number of marginalised producers.

There may be more opportunity in indirect support, including research and development, extension, training, off farm infrastructure and other public goods that are useful and accessible to many. The challenge is to put in place practical systems that combine government departments, research institutions, extension workers, farmers, and public and non-profit support organisations to take advantage of the opportunities afforded by the policy. The policy must be tested on its progressive elements.

Smallholder farmers, household producers, and the agroecology and food sovereignty movement are up against formidable forces. Corporations occupy policy at the highest levels, with entrenched networks of patronage and power linking government, corporations and some commercial farmers.

The best response is to continue to build mutually supportive smallholder and household agroecology networks and practices, resist the privatisation and commercialisation of smallholder farmer support, and seek allies within government. A more socially egalitarian and ecologically sustainable path for South African agriculture must be rooted in building a wide and diverse smallholder and household base, using ecologically sustainable production methods as a significant part of the food production system.

A shorter version of this blog was published by Daily Maverick earlier this month.