Latest news with #Agbiz
IOL News
26-06-2025
- Business
- IOL News
Impact of foot-and-mouth disease on meat prices creates concern among consumers
A customer browses the meat and poultry section. Food prices in South Africa rose to 4.4% in April from 3.3% in March, largely driven by meat, specifically beef, due to the outbreak of foot-and-mouth disease. Image: Bloomberg The Agricultural Business Chamber (Agbiz) and civil society groups have raised concern about rising prices of food in South Africa, largely driven by meat, specifically beef, due to the outbreak of foot-and-mouth disease. Data from Statistics South Africa (Stats SA) last week showed that food inflation increased to 4.4% in May from 3.3% in April, despite the headline consumer inflation remaining unchanged at 2.8%. Wandile Sihlobo, chief economist of Agbiz, acknowledged the acceleration of food price inflation but offered a note of cautious optimism. Sihlobo also noted that other products remained roughly unchanged while others experienced slowing price inflation. 'Regarding meat, the key issues that have dominated the headlines are the outbreak of avian influenza in Brazil and its potential impact on domestic poultry supplies and prices. The second concern relates to beef supplies following the outbreak of foot-and-mouth disease,' he said. 'The price increases we observe are essentially a continuation of the past few months, mainly due to base effects, the rising domestic demand, and the suppliers' window to pass on some costs they have experienced stemming from higher feed prices over the past couple of months before the recent cooling of maize and soybean prices.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) conducts a monthly assessment on 44 basic food items as part of the Household Affordability Index. Mervyn Abrahams, director of the PMBEJD, said they noted that 33 out of the 44 items recorded an increase, with onions up by an alarming 23% when compared to the April index. 'Aside from onions, we also noted that items like potatoes, spinach, butternut, and margarine also recorded increases, which is equally worrying as these are products used on a regular basis in households across the countrym' he said. Abrahams these were difficult times where most people and families were struggling to make ends meet in what was an illustration of high living costs, meaning that access to food was becoming more difficult on a regular basis. 'Middle-income earners, as well as those in the low-income category, constitute a major portion of the country's population, and when studies and reports indicate that they are battling to make ends meet, that provides a worrying state of affairs in the country.' Evashnee Naidu, regional manager for Black Sash in KwaZulu-Natal, noted with concern the upward tick in food price inflation. Naidu said despite the annual increase in social grants, this continued to be eroded due to food price inflation. 'Those who are on social grants or on lower income thresholds severely bear the brunt of the ongoing increase in food prices. Food insecurity continues to plague South Africa, with seemingly no resolution in sight,' Naidu said. 'Government has to do more to curb ever-increasing food price inflation, and one of the measures could be making the Social Relief of Distress (SRD) grant a permanent form of Basic Income Support to those aged 18-59 years to ensure that individuals and households have some kind of safety net to cushion the blows of increasing prices in South Africa and ensuring that people have some kind of food security.' Aliya Chikte, project manager at the Alternative Information and Development Centre (AIDC), said more than half the population lives in poverty, leaving the majority without daily access to nutritious food. 'While this has been a persistent issue, the rising cost of healthy protein sources is particularly alarming, especially amid the growing prevalence of non-communicable diseases in the country,' she said. Chikte also said the continued exclusions from the SRD grant, along with anticipated increases in false exclusions of other social grants, was compounding the crisis and will deepen hunger. 'We are particularly concerned about the planned stringent criteria being applied to the Child Support Grant.' BUSINESS REPORT
Daily Maverick
25-06-2025
- Business
- Daily Maverick
‘First step to cheaper food' — Steenhuisen axes controversial bread inspection contract
Following President Cyril Ramaphosa's call in the State of the Nation Address to reduce the cost of living, Agriculture Minister John Steenhuisen said on Tuesday that he had revoked a controversial bread inspection contract and that red meat costs were next on the agenda. When President Cyril Ramaphosa asked Minister of Agriculture John Steenhuisen to find ways to bring down the cost of food in South Africa, he and his team looked at where 'friction costs' and 'red tape' drove up prices. 'The contract for inspections by Leaf Services was one of the first things raised with me when I became the minister of agriculture,' Steenhuisen said on Tuesday. 'I spent the first three months of being a minister going out and speaking to stakeholders. I met with organised agriculture and the commodity bodies. I met up and down the value chain with as many people as possible. This was a common theme that came up from … millers, Agbiz [Agricultural Business Chamber], the various commodity organisations and of course the retailers. 'Their whole argument was that they are already required in terms of their product standards to do the testing, and what these assignee services do essentially is to add another layer of bureaucracy. It obviously adds to the cost of food, which ultimately has to be passed on to the consumer.' He said supermarkets, like Shoprite Checkers, that offered R10 meals had bread as one of their staples, but if assignee services had to be added on, it would be impossible for the stores to offer these meals. Unfair 'Their view was that it was unfair towards the lower end of the consumer chain.' Steenhuisen said retailers argued that this was fundamentally unfair as the assignee services (Leaf Services) would just duplicate product testing that the retailers were already doing. 'When they [retailers] get bread in from suppliers, they do their own testing of the quality,' he said. This included weighing the bread. 'They told me that if they sold bread that was below weight, their customers complained.' He said the assignee service contracts did not contain a proper business model of how they would carry out these tests. 'When it came to this particular assignee, Leaf Services, it was almost impossible to determine their value add,' he said. 'On a balance of probabilities and given the fact that the medium-term development plan has spoken about reducing the cost of living, and the President, at the State of the Nation Address, has asked us specifically to look at mechanisms to reduce the cost of food in the country, this was one of the first places to start. 'It is part of a wider process in the Department of Agriculture to look at red tape and friction costs around food costs and the value chain … and to try and remove as many of them as possible,' he said. 'But obviously without compromising consumer safety, which also has to be paramount. 'When Leaf Services originally advertised what they wanted to do, it was met with very strenuous opposition. All raised the same concerns.' He said that based on these objections he had revoked Leaf Services' assignee application. Payment to Leaf Services would have been compulsory, from the grain producers to the millers to the retailers. 'We are looking at other mechanisms as well throughout the regulatory space to cut red tape and reduce friction costs.' Nimble regulatory environment Steenhuisen said creating an agile, nimble regulatory environment that took into account the views of the sector was a key priority he had announced for his ministry, 'a modern, progressive, regulatory agenda that is adaptable to the space'. His decision to revoke Leaf Services' contract was part of delivering on this promise. He said that assignee services were one of the 10 priorities needing the Department of Agriculture's attention as set out by agriculture economists Wandile Sihlobo and Johann Kirsten in their book The Uncomfortable Truth about Agriculture in South Africa. 'Across the chain, it is the right move to make. We will also be looking at other areas where we can reduce the cost of food.' Red meat, he said, was next, and this would be done within eight weeks. He said the contract for Leaf Services had been ongoing for the past three to four years. 'The retailers' big thing was to argue that if you want the price of bread to go up, this was the best way to do it,' he said. Steenhuisen said he had little doubt that Leaf Services would litigate, given the lucrative nature of their contract. 'But I stand ready to defend this decision. The government needs to listen. Where people identify the impediments to growth, you have to listen and take it seriously.' Lack of transparency Dr Tobias Doyer, the CEO of Grain SA, said they and stakeholders from across the grain industry had persistently engaged with the government about the lack of transparency, stakeholder consultation and cost implications associated with Leaf Services' proposed role in grading inspections. 'We commend the minister and the department for the significant progress made towards a regulatory environment that is principled, transparent and accountable,' said Doyer. 'These strides reflect a growing commitment to regulatory stewardship that aligns with global best practices.' He said, 'Formal objections were submitted, legal advice pursued, and a direct appeal was made to the ministry in 2024 to revoke the appointment of Leaf Services.' Experts from Grain SA calculated that if the R4-per-tonne fee proposed by Leaf Services were implemented in 2016 as intended, it would have cost members more than R600-million. 'Seen differently, this revocation represents a R600-million saving for grain producers. Grain SA itself incurred R135,000 in legal costs to appeal the proposed implementation — an investment made in the best interest of our members and the broader industry,' said Doyer. 'The grain industry supports regulation that is coherent, cost-effective, enabling and respectful of the rights and responsibilities of both juristic and private actors across the food value chain. 'We believe that regulations, when properly applied, are not merely a safeguard, but a critical enabler of inclusive economic participation, innovation, and agricultural competitiveness.' Relieved Pick n Pay CEO Sean Summers said that when Leaf Services started their contract it would have raised the price of staples. 'As it is, basic bread is a low- or zero-margin product, given that it is a staple for most South Africans, especially those under considerable financial strain. 'We are obviously relieved that the minister listened to concerns raised by so many and took the right decision. This would have been an unconscionable waste of money to no benefit.' He said that while Pick n Pay and all others involved fully accepted and supported that bread was legally regulated, it was difficult to understand why the department had originally found it necessary to appoint Leaf Services, which in turn would force the industry to pay for a service that used to be free. Summers said that Leaf Services' appointment was successfully challenged in court in 2021 by the Consumer Goods Council of South Africa, and a new 'equally unreasonable business model' was submitted. He said no research 'at all' had been conducted to establish the level of compliance within the baking industry to see if there was a need to conduct inspections in the first place. 'Bread quality is managed by producers, millers and retailers, and the Department [of Agriculture] in the past provided a free service to control quality. The proposed service was not about food safety. It was completely unnecessary,' he said. 'When applying this to Pick n Pay alone, the inspection methodology proposed by Leaf Services, which included three annual inspections at each of our 920 stores across the country, raised significant concerns. 'The sampling process would have required duplicate samples from each batch and size of bread, drawn from the point of sale. Given that our batch codes are determined by the day's production, this methodology would have substantially increased the operational complexity and cost for our business, and that of all other retailers. 'Since foundation, we have baked and sold billions of loaves of bread across our stores, consistently of high quality. We have never encountered issues with compliance, which underscores our commitment to maintaining these standards voluntarily. 'The introduction of this new inspection regime by Leaf Services would have represented an unnecessary cost burden that could be better allocated to further enhancing the value and affordability we provide to our consumers. 'Had the minister not revoked this contract, the cost to Pick n Pay alone would have been in the region of R10-million a year, excluding the additional costs with speciality breads and other types of bread produced in our in-store bakeries. With Boxer, it would have been about R15-million for a service that was free in the past.' Responding to a request for comment from Daily Maverick, Leaf Services said: 'Leaf Services is aware of the notice published by the Department of Agriculture in the Government Gazette on 13 June 2025. 'Considering this development, we are currently evaluating our options. We consider it premature to comment further at this stage, but we will communicate our position in due course.' DM
Zawya
19-06-2025
- Business
- Zawya
South African agribusiness optimism remains despite confidence index dip
After a notable uptick in Q1 2025, the Agbiz/IDC Agribusiness Confidence Index (ACI) fell by 5 points in Q2 2025 to 65. Most respondents pointed to the uncertain global trade environment, lingering geopolitical tensions, and the domestic animal disease challenge as some of the key factors constraining the sector. Despite the slight decline, the current level of the ACI implies that South African agribusinesses remain optimistic about business conditions in the country. The better summer rains and improvements at the ports, which have enabled exports with minimal interruptions, are some of the positives. This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa. Figure 1: Agbiz/IDC Agribusiness Confidence Index (Shaded areas indicate periods indicate periods of drought in South Africa.)">Source: Agbiz Research, South African Weather Service (Shaded areas indicate periods indicate periods of drought in South Africa.) Discussion of the subindices The ACI comprises ten subindices; six of them declined in Q2 2025, while the rest remained unchanged. Here is the detailed view of the subindices. • The turnover subindex confidence is down by 5 points to 55 in Q2 2025. We observed a deterioration in sentiment among agribusinesses operating in the red meat sector, while others maintained a roughly unchanged view from the previous quarter. Similarly, the net operating income subindex fell by 5 points to 65 points in Q2 2025. The drivers were the same as the turnover. • The sub-index measuring export sentiment volume fell by 40 points to 60 in Q2 2025. This is still a relatively favourable level. For example, in Q1 2025, South Africa's agricultural exports totalled $3.36bn, up 10% from the same period a year ago, according to data from Trade Map. Thus, the decline in sentiment in Q2 is a normalisation. • The general economic conditions subindex fell by 15 points to 50 in Q2 2025. This indicates concerns about growth prospects this year due to both domestic and global constraints. • The market share of the agribusiness subindex fell by 5 to 65 points in Q2 2025. Most respondents maintained an essentially unchanged view, which enabled the high base to lead to a mild decline in sentiment. Unchanged view • The employment subindex remained flat from the previous quarter at 55 points in Q2 2025. The generally favourable sentiment reflects the upbeat production conditions in field crops and horticulture. • The capital investments subindex was unchanged from Q1 2025 at 75 points. This is unsurprising, as high-frequency data, such as tractor and combine harvester sales, have remained strong in the first five months of this year. • The general agricultural conditions subindex remained unchanged at 80 points from the first quarter of 2025. This mirrors the positive effects of La Niña rains in the 2024/25 summer season, which have boosted the production conditions in field crops and horticulture. Changes in interpretation • The subindices of the debtor provision for bad debt and financing costs are interpreted differently from the abovementioned indices. A decline is viewed as a favourable development, while an increase signals growing financial strain. • In Q2 2025, the financing costs indices increased by 10 points to 85. This came as a surprise, as the easing interest rates in the country would have made the financing environment better. • However, the debtor provision for bad debt was unchanged from Q1 2025 at 50. The subindex remaining at this level suggests that some farmers may still face financial pressures from the previous season, and there will likely be more from the livestock industry, which is currently struggling with foot-and-mouth disease. In essence, the ACI results for Q2 2025 illustrate that the mood in the sector remains upbeat about the recovery this year. Still, the results also show that the recovery will likely be uneven as some key subsectors struggle with animal disease. The dominance of geopolitical concerns amongst respondents' views illustrates South Africa's agricultural sector's strong dependence on export markets and the need to work to diversify markets. China, India, Saudi Arabia, and Egypt are among the key markets we should expand into. Still, as we drive the diversification, we must work vigorously to retain the access we have in various markets in the EU, UK, Africa, Asia, the Middle East and the Americas, amongst others. Also important are the collaborative efforts between business and government on addressing the biosecurity issues in South Africa's agriculture, along with pushing for more efficient network industries, better management of the municipalities, and the implementation of the Agriculture and Agro-processing Master Plan, which is key for the long-term growth of the sector. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
IOL News
19-06-2025
- Business
- IOL News
How farm innovations could jeopardise your insurance coverage
The installation of equipment that increases the risk of fire needs to be updated with the insurance company by farmers, otherwise their claims may be declined. Image: Soraya Crowie / African News Agency (ANA) Farmers employing various innovative strategies to maintain profitability on their farms may introduce new risks that may not be covered under their existing insurance policies. Changes that can introduce new risks that may not be covered under their existing insurance policies include contract farming arrangements, leasing portions of land to third parties, or switching to higher-value crops and infrastructure investments. With South Africa's farming sector under growing financial pressure, Jan-Hendrik Botha, the Head of Underwriting at Western National Insurance, urges farmers to prioritise full disclosure of any changes to their operations. 'When a farmer's insurance policy is initially underwritten, it is based on specific farming-related activities, whether it's cattle farming, crop production, or fruit farming. Alterations to operations - such as leasing farm space to outside contractors, installing solar energy systems or engaging in third-party processing - change the risk profile. If these aren't disclosed to the insurer, the policy may no longer be valid and claims could be denied.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Budding optimism After a notable uptick in the first quarter of this year, the Agbiz/IDC Agribusiness Confidence Index (ACI) fell by 5 points in the second quarter to 65. Most respondents pointed to the uncertain global trade environment, lingering geopolitical tensions and the domestic animal disease challenge as some of the key factors constraining the sector. Despite the slight decline, the current level of the ACI implied that South African agribusinesses remain optimistic about business conditions in the country. Earlier this year, the Land Bank said South African farm properties faced multiple structural challenges, including increasing competition from imports and rising production costs, particularly energy expenses. "Additionally, persistently high interest rates are affecting affordability across the industry. The cost of financing inputs has increased, which in turn is placing pressure on profitability. Export-linked commodities are further impacted by currency volatility; the rand's recent drop to a historic low of R25 to the British pound is a case in point.' The financier said said these combined factors are likely to influence farmland values. It added that in agriculture, producers often shifted to alternative crops when the profitability of a specific commodity declines. Crop changes For instance, citrus may be replaced by other crops, although the value per hectare of these alternatives may differ. Whether such changes in land use and valuation will occur remains to be seen, and will depend on how these market forces evolve. Botha said the rise in non-disclosure in the agricultural sector is a growing concern, particularly around these types of operational changes. 'For instance, a farmer who enters a joint venture with a contractor for crop spraying or storage might not realise this increases both liability and fire exposure. Their policy, tailored to traditional farming risks, won't necessarily cover claims stemming from third-party negligence or equipment damage from unauthorised usage. Failing to disclose these activities leaves the business exposed,' Botha said. non-disclosure risks The consequences of non-disclosure can be severe and may result in the voiding of the policy at claims stage if the loss is linked to an undisclosed risk. Full, ongoing disclosure allows the insurer to make relevant adjustments to cover and pricing and also provides an opportunity to explore additional risk mitigation solutions such as reinsurance or tailored endorsements to protect both the farmer and the insurer's exposure. Botha highlighted that as farming businesses evolve, their risk categories may shift from medium to high-risk, necessitating more frequent risk assessments. 'Agricultural businesses typically undergo an initial risk survey, with annual reviews thereafter. But when introducing high-value assets like processing plants, advanced irrigation systems or expanding storage capacity, the risk profile shifts significantly, and insurers may need to reassess more frequently,' Botha said. Another common area of non-disclosure includes infrastructure investments like installing solar panels or building cold storage, as well as changes in farming activity, for example: transitioning from grain to high-value crops such as berries or nuts. 'Farmers might not realise how these upgrades or shifts affect their insurance. If not reported, the policy may no longer reflect the business's actual needs,' Botha added. Non-disclosure did not just affect claims but could potentially hinder future insurability. 'If a history of non-disclosure emerges, it may lead to increased premiums or result in the business being declined cover altogether. Insurers view non-disclosure as a sign that risk has been misrepresented, making it harder to maintain favourable terms,' he cautioned. Regular reviews To help farmers navigate these evolving risks, Botha encourages regular and transparent communication with brokers. He said a broker's role is to ensure that policyholders understand the full extent of their coverage and that any changes in their operation are disclosed promptly. "This is especially important in agriculture, where operations can shift rapidly due to market demands or climate challenges. Working closely with a reputable broker is essential for maintaining suitable coverage.' The insurer said as the agricultural sector continues to modernise and adapt, full disclosure remains critical in protecting farming enterprises. 'We urge all farmers to review their policies regularly, especially when changes occur in operations, assets or third-party agreements. Keeping insurers informed is the best way to avoid unpleasant surprises at claims stage,' Botha said. Independent Media Property
Daily Maverick
19-06-2025
- Politics
- Daily Maverick
Loaded for Bear: Sihlobo peels off the gloves and busts SA agriculture myths in new book
This book weeds out many of the myths about the platteland — myths sprung from the manure spread by self-serving politicians that can find fertile soil in the withered fields of disillusion. In his previous two books about South African agriculture, the affable Wandile Sihlobo generally took a diplomatic tone when it came to government failures and half-baked policies. But Sihlobo, the chief economist at the Agricultural Business Chamber of South Africa (Agbiz), has taken the gloves off in his latest book, co-authored with Johann Kirsten, Director of the Bureau for Economic Research at Stellenbosch University. The Uncomfortable Truth about South Africa's Agriculture takes aim at decades of government bungling, missteps, corruption and ill-conceived policies that have squandered the promise of land reform, a process that is crucial for food security, economic growth and the rectifying of glaring economic imbalances rooted in apartheid. This book also weeds out many of the myths about the platteland — myths sprung from the manure spread by self-serving and populist politicians that can find fertile soil in the withered fields of disillusion. Among the domestic challenges confronting South African agriculture, Sihlobo and Kirsten are scathing in their assessment. 'A malfunctioning State Veterinary Service is unable to prevent and manage disease outbreaks and unable to comply with requirements of trade partners,' they note — an issue that has been thrown into sharp relief by the recent outbreak of foot-and-mouth disease among livestock. They also point to the 'complete destruction of the rural road and rail system' and 'dysfunctional local municipalities resulting in no service delivery'. Not 'poor' service delivery — 'no' service delivery. The rural road and rail system is not just coming off the rails but has collapsed into 'complete destruction'. The state vet service is 'malfunctioning'. This is no mincing of words and is a grim but accurate reflection of the unfolding disaster of government breakdowns and the bitter harvest they are reaping in the agricultural sector. Still, against the odds and in the face of other challenges such as climate change, agriculture in South Africa is in many ways thriving. This crisp and concise book is not all doom and gloom and offers a number of sensible policy recommendations. Myth-busters The book busts many of the myths around South African agriculture that have ripened on the vines of state failure. First off is the widely held perception that 40,000 white farmers own 80% of South Africa's land. 'The magic number of 40,122 commercial farmers is widely quoted as the total number of farmers earning a commercial income from farming. The number comes from the 2017 census of commercial agriculture, but is based only on farmers registered for value-added tax (VAT),' the authors write. 'The 2017 census excludes 92,634 households that practise commercial farming as their main source of income, and a further 109,465 households that practise commercial farming as a secondary source of income. So, in total, there are 242,221 households (black and white) in South Africa that practise some form of commercial farming.' And in 1994, white commercial farmers owned 63% of the total surface area of the country. That's a lot, but it's not 80% and has since declined. Another myth is that commercial agriculture is characterised by large-scale white commercial farmers. 'This myth results from a misinterpretation of the concept of 'commercial' and 'scale'. Commercial agricultural production indicates production beyond subsistence needs, with some, or a major share, of the total production sold to the market,' the book says. And unlike fishing, size does not always matter. 'Land size is not a good indication of the scale of the farming operation. For example, a small irrigation farm of 10ha can deliver millions in turnover, while a 10,000ha Karoo farm with extensive grazing is unlikely to exceed R1-million in turnover per annum.' The big myth centres on land reform and the mantra that only 8% of farmland has been redistributed to black people. I have been covering such issues for years, and the 8% figure has been thrown around now for mor3 than a decade, seemingly stuck in an endless time loop. 'These arguments typically ignore the statistics on the land market… and the fact that black South Africans have been acquiring farmland on their own. Taking account of all the pillars of the land reform programme, it is estimated that 25% of all farmland has been redistributed or land rights have been restored,' the authors assert. This is also close to the 30% goal by 2030. But '… the incorrect presentation of progress with the land reform process is… maliciously used to inflate the argument for expropriation', the authors pointedly note. It is all fodder for the populist and authoritarian MK and EFF parties and the radicals within the ANC's fold. 'These arguments also conveniently ignore the bureaucratic inefficiencies in the government land reform programme, and the many cases of patronage and corruption in the programme that derailed the noble idea of assisting the rightful beneficiaries to acquire land in the market.' The bottom line is that the state is now one of the biggest owners of farmland in South Africa, but much of it lies fallow and weed-strewn. 'There are vast tracts of land in the government books that could be transferred to black South Africans… for the benefit of agricultural progress and land reform success. To date, the process has not been transparent and many of the allocated parcels of agricultural land remain unproductive.' Disappointing The programme under the Proactive Land Acquisition Strategy (Plas) has been disappointing, the authors note, because '… virtually no land has been transferred to individuals'. 'The performance on most Plas farms is disappointing. More than half of the current beneficiaries aren't doing any substantial agricultural production, and the same number were evaluated as having a low capacity to achieve commercial status.' A poor beneficiary selection process — you are either a farmer or you are a cadre — inadequate support, poor infrastructure, a lack of access to the finance that comes with ownership, and rampant crime have dashed the promise of Plas. Among the sensible policies proposed to kick-start aspiring black farmers and bring land back to productive use is the transfer of title deeds to capable farmers to enable them to access finance through a reinvigorated Land Bank. The Land Bank itself should be focused squarely on mortgage finance for land purchases and wholesale finance for production credit, its cost of capital should be below prevailing market rates set by the Reserve Bank, and its funding models need revision. There is a lot more cud to chew in this book, which lays bare many of the uncomfortable truths about South African agriculture while charting a way forward. DM
