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Land reform that unleashes a rural economic miracle should be the goal

- William Gumede

Migration from rural areas to cities can be slowed down with integrated agriculture value chains.

Only focusing on the transfer of land to previously excluded communities as a measure of successful land and agriculture reform, as currently appears to be, is spectacularly misplaced.  

Successful land reform is developing the entire commercial value chain that brings the agriculture product from raw material in the field to the refined product, its by-products and services.

This would include the inputs to agriculture, whether the consumable ones, such as seeds, fertilisers and oil; and capital inputs such as tractors, machineries and tools to produce the agriculture product.

It also includes agriculture-based manufacturing, machinery, equipment and tools, and technology production. Very few developing countries link agriculture to manufacturing. The inputs for agriculture manufacturing have great catalytic power to boost manufacturing across economic sectors. 

The agricultural logistics, transport and branding are crucial commercial elements. But it also includes agriculture education – from vocational education, colleges to high-end research at specialised agricultural research and higher education institutions.

Developing and maintaining rural infrastructure, environmental management and tourism are critical to the value chain. It also includes private and public financial services focusing on land and agriculture.

The catalytic development, jobs and wealth are not in producing only the raw material – as the case in many African and developing countries with abundant land. The jobs, industrialisation and growth take place in processing, adding value and providing niche products out of the raw material.

Sadly, most African and developing countries export raw materials, with the processing, value-adding and manufacturing taking place in other industrial countries, and increasingly in emerging markets such as China, India and South Korea.

The raw material exports from African and developing countries typically produce less jobs, wealth and growth; while the value-add process in industrial countries create more jobs, wealth and growth. African and developing countries then import the finished products at higher prices.

An integrated land and agriculture reform programme in South Africa should therefore encompass the whole private, public and infrastructure value chain of land and agriculture.

Overall, land and agriculture reform must be done in a way that protects food security, by retainingthe existing competitive agriculture sector, and making blacks already farming, whether informal, small scale and emerging farmers, more efficient, diversified and export competitive.

A core pillar must be to ring-fence commercial agriculture to keep the country food self-sufficient, retain current agricultural jobs, high-grade farming skills and export income.

In commercially viable farms, where practical, legitimate farm employees who are active in agriculture, could be given shareholder options, profit-sharing and of course treated with dignity.

Any empowerment in the land and agriculture sector should be focused on building pragmatic, honest and merit-based black economic empowerment in the entire value chain. 

A new lease on life for countryside

A number of South Africa's declining rural towns can be given a new lease on life by being turned into agribusiness towns – where products can be processed and beneficiated. Bigger rural towns can also be transformed by establishing agricultural vocational education, research and technology hubs.

In order to develop land and agriculture value chains, communal land must be transferred to individual households. Newly empowered recipients of communal land can then enter into commercial agriculture cooperatives, to collectively access training, new productive methods and markets.

Of course, it will be crucial that emerging or new farmers diversify farm products, farming products that the country, Africa and the world needs. Furthermore, emerging farmers must focus on the export market.

A good example of successful cooperative small-scale farming is Italy's Emilia Romagna region, where cooperatives produce 30% of the region's GDP. Furthermore, many food processing companies in the rural areas of Italy, Uruguay and the Quebec region of Canada, are cooperatives.

Brazil is an example where there has been a focus on export agriculture manufacturing, producing new products such as biofuels from raw materials and creating a technology industry linked to agriculture and land. Brazil has established agriculture-based schools, vocational institutions and higher research institutes in rural areas.

Young people are kept in the rural areas during agriculture based technical education, manufacturing and farming. Brazil has successfully managed to get small farmers to diversify their products, created agribusinesses in rural areas and built a farming machinery industry. Its "More Food Program" encourages smaller farmers to produce diversified products that are sold to government agencies, such as the army, schools and feeding schemes.

A rural economic miracle is possible

If integrated land and agriculture value chains are combined with improving the quality of public schools, hospitals and infrastructure in such rural towns, South Africa's rural areas can be re-energised, the flight from rural areas to cities slowed down and a rural economic miracle could be unleashed.

Available state land, whether under the control of SOEs, municipalities or provinces, should be made available to farmers already active in farming – not given to political farmers.

White individual farmers, agricultural companies and the private sector can mentor, partner with and share markets with black farmers. Where practical, white farmers must create social pacts with their employees – in which they provide housing, skills and profit-sharing. Such social pacts at the farm level will better protect farmers against political "farmers", local opportunists and crime. 

To foster a manufacturing sector out of agriculture – focusing on new agricultural products which the global market needs, agricultural processing and beneficiation, South Africa will have to use foreign policy more strategically, to open up new foreign markets in Africa and the developing world for the produce of black farmers.

To make land reform more pragmatic, sustainable and inclusive will need heavy doses of political will, which is currently in short supply. Sadly, aspects of land and agriculture reform have already been captured in the same way that black economic empowerment (BEE) has been captured.

Under no circumstances should land be transferred as part of "restitution" to the politically connected, traditional leaders or to the state – that is a repeat the empowerment of the connected as seen under BEE. And to perpetuate the collapse of commercial agriculture, food security and jobs.

Some political leaders, civil groups and actors are pushing land reform for purely ideological, populist or self-enrichment reasons, yet claiming they are calling for land reform to reduce black poverty. Others use land reform to secure votes, and therefore will oppose more sustainable land reform.

The opposition to pragmatic, inclusive and long-term industrialisation enhancing land reform is massive. Some politically connected "businessmen and women" will oppose any pragmatic reform because they are looking forward to enrich themselves out of land reform. Many African traditional leaders would of course vehemently opposed the transfer of communal land to individuals, even if doing so empowers the very "subjects" whose interests they claim to serve.

Many traditional leaders insist communal land remain in their "trust", rather than being transferred to individuals, because it entrenches their stranglehold over public resources and is a source of patronage and self-enrichment.

Land and agriculture reform that develops the entire agriculture and land commercial value chain is the best strategic option for South Africa to create jobs, reduce poverty and lift growth levels.

William Gumede is Associate Professor at the Wits School of Governance and author of South Africa in BRICS (Tafelberg). This is an edited version of a keynote speech at the 10th Annual Departmental Extension and Advisory Services Symposium, Department of Agriculture, Western Cape, 17-19 July 2019. This article was first published on News24.