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February 28, 2011

South African minister warns commercial farmers to prepare for a more inclusive agricultural sector

by Donwald Pressly

South African commercial farmers were told in no uncertain terms February 23 that their virtual monopoly hold on the agricultural sector had to come to an end and that Rural Development and Land Affairs Minister Gugile Nkwinti would be consulting with them soon on the road forward.

At the AgriSA conference in Somerset West – which has focused on the government’s policy and regulatory impact on the farming sector – Economic Development Minister Ebrahim Patel said the transformation had to make up for the decades of discrimination against black South Africans which began with the 1913 land legislation that excluded blacks from owning land in most of South Africa.

The recipe going forward, however, would have to consider the practicalities of at least maintaining the levels of food production or even expanding it while carrying out the transformation measures.

Explaining his New Growth Path and its implication for the agricultural sector, Patel said the government viewed the agricultural value chain as a key driver of job-creating growth in the country.

This meant that there had to be a fundamental turnaround from a general decline, particularly of commercial farms. Between 1993 and 2007 about 300 000 jobs had been lost on commercial farms.

There were now only 40 000 commercial farms, down from 60 000 nearly 20 years ago.

There had been a reduction in the quantity of land under maize and wheat – two staple food sources.

Farms had become increasingly mechanised and larger. At the same time the value of capital stock on farms had declined from R120 billion in the early 1990s to about R110bn today.

The rural economy needed to be regenerated and the necessary ingredient was new farmers. “Land reform is critical to provide livelihoods… it is vital for our long term future to de-racialise the rural economy,” he said to a room of mainly white male farmers. “Four generations of black South Africans have been excluded from commercial farming,” he said.

It was time to address the consequences of that through legislation, Patel warned, noting that the government would prefer to use the “tools of democracy”, which included dialogue, and to seek partnership and co-operation with organised agriculture to “secure the imperative of wider ownership”.

The government was intent on carrying out a land reform programme, which he described as “necessary”. But he said it needed to be carried out “in an orderly and systematic fashion… adhering to the rule of law and ensuring sufficient compensation where there are changes of ownership”.

“Gugile Nkwinti has been applying his mind to these challenging issues,” said Patel, noting that the minister had sent a message to AgriSA – which represents the bulk of white commercial farmers – that he would be “initiating talks with you and your representatives shortly”. - Business Report

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