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1
Research
Report
Volume 1: Situation analysis, fieldwork
findings and main conclusions
Michael Aliber, Mompati Baiphethi, Rick de Satge, Jonathan
Denison, Tim Hart, Peter Jacobs and Wim van Averbeke, with
Rauri Alcock, Mike Antwi, Abenet Belete, Ben Cousins, Larry
Field, Irvine Mariga, Patrick Masika, Simeon Materechera,
David Mayson, Nomakhaya Monde and Barbara Tapela
Strategies to support
South African smallholders
as a contribution to
government’s second
economy strategy
PLAAS
Institute for Poverty, Land and Agrarian Studies
School of Government • EMS Faculty
i
Research
Report
Research
Report
Volume 1: Situation analysis, fieldwork
findings and main conclusions
Michael Aliber, Mompati Baiphethi, Rick de Satge,
Jonathan Denison, Tim Hart, Peter Jacobs and
Wim van Averbeke, with Rauri Alcock, Mike Antwi,
Abenet Belete, Ben Cousins, Larry Field, Irvine
Mariga, Patrick Masika, Simeon Materechera,
David Mayson, Nomakhaya Monde and
Barbara Tapela
June 2009
Report commissioned by the second economy strategy project
Strategies to support
South African
smallholders as
a contribution to
government’s second
economy strategy
PLAAS
Institute for Poverty, Land and Agrarian Studies
School of Government • EMS Faculty
ii
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Published by the Institute for Poverty, Land and Agrarian Studies, School of Government, Faculty of Economic Management Sciences.
University of the Western Cape, Private Bag X17, Bellville 7535, Cape Town, South Africa.
Tel: +27 21 959 3733. Fax: +27 21 959 3732. E-mail: plaas@uwc.ac.za
Website: www.plaas.org.za
Institute for Poverty, Land and Agrarian Studies Research Report no. 41
ISBN: 978-1-86808-718-1
March 2010
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior
permission from the publisher or the authors.
Copy editor: Lee Smith
Series editor: Rebecca Pointer
Cover photograph: PLAAS
Layout: Designs4development,www.d4d.co.za
Typeset in Frutiger
Printing: RNK Graphics
Thanks to Trade & Industrial Policy Strategies (TIPS), and the source of the funds, the UK’s Department for International
Development (DfID).
Strategies to support South African smallholders as a contribution to government’s second economy strategy
Volume 1: Situation analysis, fieldwork findings and main conclusions
iii
Research
Report
Contents
Executive summary vii
1 Introduction 1
2 Perspectives on the ‘smallholder sector’ and the policy environment 4
3 Literature review 12
4 The ‘scan’ 45
5 Findings from in-depth case studies 49
6 Conclusions and recommendations 65
References 72
Appendix 1 – Case study methodology 79
Appendix 2 – Overview of secondary statistical sources and their
advantages and disadvantages 86
iv
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Project team
Rauri Alcock, Church Agricultural Projects
Michael Aliber, University of the Western Cape (Project Manager)
Mike Antwi, North-West University
Mompati Baiphethi, Human Sciences Research Council
Abenet Belete, University of Limpopo
Ben Cousins, University of the Western Cape
Rick de Satge, Phuhlisani Solutions
Jonathan Denison, Umhlaba Consulting Group
Larry Field, Umhlaba Consulting Group
Tim Hart, Human Sciences Research Council
Peter Jacobs, Human Sciences Research Council
Irvine Mariga, University of Limpopo
Patrick Masika, University of Fort Hare
Simeon Materechera, North-West University
David Mayson, Phuhlisani Solutions
Nomakhaya Monde, University of Fort Hare
Barbara Tapela, University of the Western Cape
Wim van Averbeke, Tshwane University of Technology
Research assistants
TB Khosa, Tshwane University of Technology
Simon Letsoalo, Tshwane University of Technology
Maite Mafa, University of Limpopo
Themba Maluleke, University of the Western Cape
Tshililo Manenzhe, University of the Western Cape
Nape Mothapo, University of Limpopo
Gugu Mbatha, Church Agricultural Projects
Eric K Ralivhesa, Tshwane University of Technology
Mpfariseni Thagwana, University of the Western Cape
Acknowledgements
The project team would rst like to thank TIPS for the opportunity to do this work, with particular
thanks to Dr Kate Philip. In addition, we would like to thank: Mike de Klerk of ComMark for
participating in our team workshops and sharing his insights; Madime Mokoena, Dan Kekana and
Buhle Dlulane of the Department of Agriculture, Forestry and Fisheries for taking time to speak with
us regarding the Department’s initiatives; Dr Sipho Sibanda of the Department of Rural Development
and Land Reform for sharing thoughts on tenure issues; and the many cooperative and helpful
people and organisations we encountered and relied upon in the course of this project.
The project team would furthermore like to acknowledge the contribution of the late Tessa Cousins,
for sharing her thoughts on small-scale agriculture and rainwater harvesting. Tessa will be sorely
missed in the rural development community.
v
Research
Report
Tables and figures
Table 2.1 Share of black households with access to land who use it for various agricultural activities
Table 3.1 Actual and targeted extension officers by province
Table 3.2 Summary of proposed conceptual shifts in respect of farming research and support
Table 3.3 Ratio of catchment and field size and flow type for rainwater harvesting and catchment systems
Table 5.1 Overview of in-depth case studies conducted for this study
Table A1.1 Perspectives to be used in the description and analysis of the case studies
Figure 2.1 Numbers of black smallholders according to the LFS, 2000 to 2007
Figure 2.2 Gender of black smallholders, 2006
Figure 2.3 Participation in agriculture by age, 2006
Figure 2.4 Share of black households in municipality involved in agriculture
Figure 2.5 Geographical distribution of black households involved in agriculture
Figure 2.6 Trends in subsistence maize production in former homelands
Figure 2.7 Comparison of price indices with aggregate maize production
Figure 2.8 Percentage of households per district municipality in which adults experience hunger
Figure 2.9 Land redistribution delivery during 2007/08
Figure 3.1 Categorisation of water harvesting methods
Figure 3.2 Impact of ploegvore on degraded Greater Karoo lands
Figure 3.3 Ribbon of saaidamme along the Fish River, Northern Cape
Figure 3.4 Infield rainwater harvesting run-off and planting areas
Figure 3.5 Trench–bed process
Figure A1.1 Analytical framework used in the study of a filière
Figure A2.1 Numbers of black people involved in agriculture for own account, 2000 to 2007, excluding data from
September LFS surveys
Figure A2.2 Trends in household involvement in agriculture
Figure A2.3 Relationship between involvement in agriculture and formal labour force status
Figure A2.4 Land access and use among black people according to the GHS
Figure A2.5 Comparison of the GHS and LFS
Figure A2.6 Comparison of the CEC estimates and the LFS
vi
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Acronyms and abbreviations
AET Agriculture education and training
Agri BBBEE Broad Based Black Economic Empowerment in Agriculture
ASGISA Accelerated and Shared Growth Initiative of South Africa
BATAT Broadening Access to Agriculture Thrust
Bt Bacillus thuringiensis
CASP Comprehensive Agricultural Support Programme
CEC Crop Estimates Committee
CGIAR Consultative Group for International Agricultural Research
DBSA Development Bank of Southern Africa
DNA Deoxyribonucleic acid
DWAF Department of Water Affairs and Forestry
FAO Food and Agricultural Organisation (of the United Nations)
FSP Farmer Support Programme
GDP Gross Domestic Product
GHS General Household Survey
GMO Genetically modied organism
HT Herbicide tolerant
IES Income and Expenditure Survey
IPR Intellectual property rights
ISRDP Integrated Sustainable Rural Development Programme
ISWC Indigenous Soil and Water Conservation
JFPM Johannesburg Fresh Produce Market
LARP Land and Agrarian Reform Project
LFS Labour Force Survey
LRAD Land Reform for Agricultural Development
Masa Micro-agricultural nance initiative of South Africa
NAMC National Agricultural Marketing Council
NGO Non-governmental organisation
OECD Organisation for Economic Cooperation and Development
PLAS Proactive Land Acquisition Strategy
R&D Research and development
SLAG Settlement/Land Acquisition Grant
SRI System of rice intensication
WDR World Development Report
WFP World Food Programme
WRC Water Research Commission
vii
Research
Report
Executive summary
Introduction
Within the ambit of the Accelerated and Shared
Growth Initiative of South Africa, government is
leading a process to dene a Second Economy
Strategy. One of the opportunities that has been
identied is the agricultural sector, in particular
fostering a larger number of smallholder agri-
culturalists. The study seeks to identify the key
elements of an implementable programme to
support the smallholder sector. The core of the
exercise entailed identifying successful South
African smallholders active in different settings,
and examining the factors that contribute to
their success, whether these are personal, con-
textual, institutional, etc. Although the study
was not designed as an evaluation of interven-
tions as such, in the process of conducting the
smallholder case studies (and in combination
with an extensive literature review), the efcacy
and relevance of different intervention and sup-
port strategies also came into focus.
For purposes of the study, we assumed a broad
denition of agricultural smallholders, including
those who operate independently, those who
farm in groups, those for whom farming is main-
ly for subsistence purposes and those whose
orientation is mainly or purely commercial. (We
therefore employ the awed but useful distinc-
tion between ‘subsistence’ and ‘commercial’
smallholders.)
Ultimately, we conceptualise ‘supporting the
smallholder sector’ as consisting of four distinct
strands, namely the prospects and measures for:
• improving the performance of subsistence-
oriented smallholders;
• encouraging/enabling smallholders who are
currently subsistence-oriented to benet
from a more commercial orientation;
• improving the performance of commercially
oriented smallholders; and
• increasing the participation in smallholder
agriculture among those (especially rural
dwellers) who do not practise agriculture.
Approach
The study was designed to address a number
of research questions, in respect of which the
main ndings are summarised below. The study
involved three main research activities. The rst
was a literature review seeking to distil inter-
national lessons and current practice in South
Africa, with particular attention to extension,
market access for smallholders, and technology
development and transfer.
The second research activity was the ‘scan’,
meaning a compilation of brief descriptions of
smallholder instances selected to provide some
sort of insight into what works and what does
not in respect of smallholder development. The
scan comprised two parts, namely inputs from
various team members themselves, drawing on
their own work and experience, and a telephon-
ic survey of provincial agriculture departments
in which they were asked to describe instances
of ‘successful smallholders’ in their respective
provinces. The rst part of the scan yielded 32
inputs and the second part a further 29, for a
total of 61.
The third research activity was the 16 in-depth
case studies – mainly drawn from the scan and
selected to cover a range of different geograph-
ical settings and production systems, but also to
ensure a balance between smallholder situations
which help us focus on the efcacy or otherwise
of deliberate interventions, and those which
offer insights into what sorts of circumstances
(whether individual or contextual) favour small-
holder ‘success’, even in the absence of such in-
terventions.
Although in essence this was designed as a study
of ‘best practice’, in selecting case studies we did
not adhere to xed criteria as to what consti-
tuted ‘success’. This was deliberate in the sense
that we did not want to impose success criteria
that might limit our appreciation of what small-
holders can achieve in reality. On the downside,
a number of smallholder scenarios selected as
case studies proved, on closer inspection, to not
be particularly successful by any criterion. By and
large, however, they were equally illuminating.
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Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Overview of the smallholder
sector and the policy environ-
ment
Establishing basic facts and gures regarding
smallholders is difcult. According to the Labour
Force Survey (LFS) of Statistics South Africa, there
are about 4 million black individuals who prac-
tise agriculture (understood broadly), belonging
to about 2 million households. Excluding a small
share who report farming for recreational pur-
poses, the LFS indicates that, of 4 million peo-
ple/2 million households, about 92% engage in
agriculture mainly for food production (either
as a main source or an extra source of food, but
mainly the latter), and the rest mainly for in-
come purposes (either as a main source or an ex-
tra source of income, mainly the latter). This LFS
distinction between those who produce mainly
for food versus those who produce mainly for
income, is as close as we can get to providing
statistical meaning to the distinction we draw
between ‘subsistence smallholders’ and ‘com-
mercial smallholders’.
From the LFS, we also know that 61% of black
smallholders are women. Commercial smallhold-
ers are equally divided between women and
men; however, women dominate among subsist-
ence smallholders. While there is a common be-
lief that the youth are not interested in farming,
the data reveal that younger people involved
in farming outnumber older people. However,
the number of youth who farm is smaller rela-
tive to the size of their age cohort than is the
case for older people. This probably accounts for
the perception that the youth are not interested
in farming (as does the absence of youth from
most agricultural projects) – indeed, most are
not. However, quite a large share of smallhold-
ers , whether out of ‘interest’ or necessity, are in
fact young.
The geographical spread of smallholders is highly
uneven. Three district municipalities – Vhembe,
OR Tambo, and Amatole – together account for
a quarter of all black smallholders.
Given the overwhelming majority of smallhold-
ers who are subsistence-oriented, it is clear that
farming in the black community is largely a food
security issue. However, some of the hungriest
municipalities are those with the largest density
of households engaged in agriculture (e.g. OR
Tambo, UMmkhanyakude). On the one hand,
this could be taken to imply that subsistence
production is only a moderately successful tool
to ward off food insecurity; this is almost cer-
tainly true. On the other hand, it could be taken
to mean that in the absence of subsistence pro-
duction in these areas, the experience of hunger
would be that much worse, and efforts should
be made to enhance subsistence production,
as well as spread it to areas (including urban)
where it occurs less frequently than it could.
Land reform policy has been evolving rapidly
over in the last several years. While the overall
aims of land reform remain as broad as when
the White Paper on South African Land Policy
was issued in 1997 – i.e. to promote equity, jus-
tice, poverty reduction, economic upliftment,
and tenure security – for land redistribution in
particular there has been a noticeable shift in
favour of commercially oriented ventures. This
is evidenced, for example, in the introduction of
the Land and Agrarian Reform Project (LARP),
which is meant to be a sort of parallel redistri-
bution vehicle with the expressed aim of trans-
ferring 5 million hectares to 10 000 beneciaries
(i.e. at an average of 500 hectares per bene-
ciary) (Ministry for Agriculture and Land Affairs
2008), but it was also evident in 2001 when the
Land Reform for Agricultural Development
(LRAD) Sub-Programme took over as the domi-
nant mode of redistribution. The other main
policy innovation in recent years is the Proactive
Land Acquisition Strategy (PLAS). The essential
idea of PLAS is to enable government to take the
initiative to acquire land that they regard as suit-
able for land redistribution purposes, whether
for an already identied group of beneciaries,
or in anticipation of identifying beneciaries.
For the most part, the beneciaries are meant to
occupy the land on a lease-to-buy arrangement;
through this mechanism, the land will ultimately
be transferred into the names of those bene-
ciaries who emerge as successful farmers, while
those who do not succeed (i.e. are unable to
pay their rents) will have to move off and make
space for new entrants. While it is far too early
to assess the success of PLAS as an incubator of
black commercial farmers (whether smallholders
or medium-large-scale farmers), its signicance
as a means of acquiring land for land reform is
demonstrated by the fact that for the 2007/08
scal year PLAS accounted for the largest share
of land transferred through land redistribution.
The other reason PLAS is so signicant, however,
is that it represents an effective mechanism for
acquiring land which, given the inherent exibil-
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Research
Report
ity of the policy, could in fact be used to address
land hunger for those in densely populated rural
areas where land for subsistence purposes is in
short supply.
In respect of restitution, there have been less
dramatic policy developments in recent years,
not least because restitution is intrinsically less
amenable to modication, in the sense that gov-
ernment is obliged to address all existing claims
and cannot impose economic models that, say,
involve particular ratios of beneciaries to hec-
tares. Having said that, there is evidence that,
within these constraints, government has been
trying to nd ways to make rural restitution pro-
jects more economically viable, which in many
if not most cases appears to mean commercially
viable. The main tools being used to do this are
additional grant money for farm improvements
and initial operational costs, and use of mentors
or strategic partners, the purpose of whom is
to ensure adequate farm and business manage-
ment. While it is not our purpose here to evalu-
ate the success of these attempts, we note the
government’s own expressions of concern as to
the number of failed projects. Perhaps more no-
table is the fact that the road to rural restitution
is still a very long one. Although technically most
claims have been settled, there remain approxi-
mately 5000 rural claims to address, covering an
unknown but seemingly large amount of land.
Whereas about 2.3 million hectares of land had
been transferred via restitution as of 31 March
2008, our best ‘guestimate’ is that there remain
another 10 to 12 million still to follow of private
(non-public) land, representing about 13% of all
commercial farmland.
While there are a number of other rural-orient-
ed initiatives that could be described – e.g. the
Comprehensive Agricultural Support Programme
(CASP), the Integrated Sustainable Rural Devel-
opment Programme (ISRDP), – the main obser-
vation is that at present there does not appear
to be an overarching rural development strat-
egy that makes sense of the various initiatives.
Certainly CASP is an important tool in support
of land reform and agricultural development in
former homeland areas, but it is not clear what
the ultimate vision is of either land reform or
homeland agriculture. Likewise, the ISRDP may
be playing a valuable role in improving coor-
dination among different departments and
spheres of government, but it is not informed by
a discernible economic logic or strategy.
Key findings
Among the ndings from the study, we note the
following.
Change and adaptability
How have successful smallholders overcome
common constraints and adapted to changes in
the wider economic environment over the past
5, 10 or 20 years?
The premise of this research question was that,
where smallholders are concerned, the ability to
adapt – whether in terms of withstanding shocks
or seizing opportunities – is perhaps the single
most important determinant of smallholder suc-
cess. Of course, other obviously important ‘per-
formance indicators’, such as protability inform
much of the analysis across the board, but are
not signalled out as separate research questions.
Two themes emerged in respect of this research
question: the diversity of specic measures
smallholders seem to use to address constraints
or pursue opportunities, and the distinctive be-
haviour of individual smallholders versus groups
(mainly ‘projects’).
Among the most common measures or means of
adapting to change or opportunities, we noted:
• nding external assistance, whether techni-
cal, nancial, and/or managerial/strategic;
• experimenting and investing;
• observing and adapting by example;
• reducing numbers of members;
• diversifying out of agriculture;
While on the face of it adaptability is inher-
ently a laudable quality, the relative frequency
with which external assistance was identied as
the means of adapting is cause for concern. In
some situations, the farmers’ strategy involved
not only recruiting external partners, but subor-
dinating themselves to these partners. In other
cases, moreover, the external assistance sought
is not necessarily logical, and thus not truly
adaptive at all. From the case study of poultry
farming in Limpopo, a curious observation is
that, among generally poorly performing poul-
try projects (compared to far more successful
broiler enterprises run by individuals), there is
an uncannily common tendency to identify the
same (misguided) solution to their problem, that
is, to secure funding for an abattoir.
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Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
On the other hand, in a number of instances
the strategy to adapt was more unambiguously
positive, in particular in the case of independ-
ent farmers in a range of different settings who
tend to keep alert to advantageous market op-
portunities as a matter of routine, or who opt
to switch to more protable cultivars or crops.
Among these, in a manner that is consistent with
the large literature on technological diffusion in
agriculture, one can distinguish the leaders from
the followers. The leaders tend to be those with
more resources who are able to seek new oppor-
tunities relatively far aeld, and/or bear the risk
of experimenting with new crops or methods.
Where they are successful, other farmers in the
area are likely to follow, which is its own form
of adaptation.
Implicit in the above is that group-based projects
tend to show less evidence of adaptability than
individual entrepreneurs. On the face of it, the
reason seems to be that group projects, even if
they are ostensibly enterprises, tend to not be-
have entrepreneurially: they are slow to take
decisions, fail to explore new opportunities, and
have a limited capacity for and tolerance of risk.
Exceptions are noted when a group designates a
particular individual to assume responsibility for
networking and seeking market intelligence.
Access to key means of production
How have successful smallholders obtained ac-
cess to essential means of production such as
land, labour, capital, inputs, technology and
management advice, which were in short sup-
ply under past government policies and have
not been available for many producers in recent
years either?
The case studies churned up few clear patterns.
Certainly some smallholders examined beneted
from government’s past investments in irriga-
tion infrastructure, or more recent investments
in redistributive land reform. Group projects
based in former homelands tend to access land
via the traditional authority; they may have to
confront initial resistance from other commu-
nity members who complain about the loss of
grazing land. Of course, forming groups is in it-
self a means of attracting support, whether from
government, donors, or via corporate social in-
vestment. Some projects become quite skilled
at attracting soft money through donors, etc, to
the extent that it is unclear if they have any in-
trinsic viability.
Among the successful individual entrepreneur
farmers, there is little evidence that loan capital
has played a signicant role in their success. It
is not entirely clear if this is because in the ab-
sence of access to such capital they found other
ways to marshal resources or, as the evidence
suggests, because borrowing money is not an at-
tractive prospect for many such entrepreneurs.
Few of our case study entrepreneurs describe
gaining access to loans as a priority for the fu-
ture. This is not to suggest that lending schemes
are unimportant, but perhaps they are second-
ary to addressing other constraints.
Smallholders access inputs such as fertilisers,
seed and feed in the conventional manner, for
example through farmer supply outlets. Howev-
er, small producers in particular may also rely on
local general dealers, for example for fertiliser.
Opportunities to secure better terms through
coordinated purchases are not seized as often as
they might be, but it is not clear why not.
Access to technology and management advice
comes through various channels. For group pro-
jects, the agency supporting the project is usu-
ally the key source, and management advice can
even be in the form of on-site hired manage-
ment, sometimes constituting a large share of
total costs. Among individual smallholder entre-
preneurs, personal observation and contact with
input suppliers are important sources of techno-
logical and technical information, but that does
not necessarily mean that successful commercial
smallholders are quick to adopt ‘modern’ tech-
nologies; indeed, some successful commercial
smallholders were using donkey traction.
Arguably the most signicant – and yet intan-
gible – need among smallholders in terms of
ensuring fair and predictable access to the key
means of production is order or authority, par-
ticularly in respect of land and water. On irri-
gation schemes, the systems formerly in place
for governing water distribution have often
collapsed, in particular due to the withdrawal
of water bailiffs. While water-user associations
or block committees are meant to take up this
responsibility, they do not necessarily function
properly or have sufcient authority to call
wayward farmers to order. Simalarly, in former
homeland areas, there has been a long-term de-
terioration in the traditional means of ensuring
that livestock do not invade people’s land. This
is a key reason why a large share of arable land
in former homelands remains fallow, leaving
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Research
Report
households to tend their much smaller (and rela-
tively easily fenced) homestead gardens. While
fencing subsidies may assist (for example by al-
lowing those who own contiguous elds to erect
a common perimeter fence), they are unlikely to
prove sufcient, since the underlying ambiguity
as to who is responsible for damage from live-
stock remains unresolved. Another dimension
of the land problem in former homeland areas
is the general absence of mechanisms allowing
households to rent land from one another with
greater security. This dual tenure problem ob-
tains across many, if not most, communities in
South Africa’s former homelands. Practical ex-
periments to see what can be done have been
tried in different parts of the country and are
shown to have positive results. Some have paral-
lels with the participatory systematic demarca-
tion processes being used elsewhere in Africa.
Interestingly, this is proceeding in advance of
the implementation of the Communal Land
Rights Act.
Marketing and transactions costs
What are the predominant marketing strategies
of successful smallholders, and to what extent
have these beneted from formal institutions,
private sector innovations, etc.?
It is commonly suggested that commercially ori-
ented smallholders are prone to struggling be-
cause they ‘cannot compete’ with established,
sophisticated large-scale commercial farmers.
The objective of ‘levelling the playing eld’ is
premised on this notion. However, what this
means for practice is unclear.
Smallholders examined in this study illustrate
the three main marketing strategies common to
smallholders elsewhere: i) local direct market-
ing in one’s own community; ii) via formal es-
tablished marketing chains; and iii) high value
niche markets. Apart from these, outgrower
smallholders in a sense don’t market at all, al-
though the relationship of the outgrower to the
principal can be thought of as a solution to the
challenge of marketing, among other things.
Of the three main marketing strategies, each of-
fers real opportunities for smallholders and has
its place. Direct local marketing can serve as a
useful ‘nursery’ for smallholders attempting for
the rst time to turn agriculture into a main in-
come source, but it has its obvious limitations.
Can local (or almost-local) markets be recong-
ured to make this limitation less severe, in par-
ticular so that local producers capture a larger
share of the local demand in the nearest town
centre?
Moving out of strictly local markets requires a
big step, as smallholders must come to grips with
transport costs and/or seeking the most advan-
tageous market opportunity. Some smallholders
benet from arrangements where the buyer as-
sumes responsibility for transport, but this does
not usually make things any better for the small-
holder (except in terms of cash ow), since the
agreement reached affects rather the price re-
ceived. Indeed, a general rule of thumb suggests
that the more passive the producer, the less they
earn, including when the smallholder depends
on other people to arrange their transport and/
or make their marketing arrangements. This is
not to diminish the sometimes positive role of
market intermediaries, but for smallholders in
particular evidence suggests that such interme-
diaries can and do exploit their superior infor-
mation to the disadvantage of small-scale farm-
ers.
By and large, the ndings reported here support
recent policy initiatives gaining momentum in
the Department of Agriculture. These initiatives
to strengthen smallholder-oriented commodity-
based associations, which can potentially im-
prove information ows to smallholders, include
an appreciation of the ins and outs of seeking
the best deal for one’s products. These initiatives
also provide for interventions to reduce trans-
port and other transaction costs that frustrate
smallholders, among other things by investing
in strategically located physical infrastructure.
While these initiatives are generally well co–
ceived, much depends on how carefully and skil-
fully they are designed and implemented.
As for means of assisting smallholders to access
niche markets, our evidence is modest. Generally
we support proposals owing from the parallel
study (conducted as part of the Second Econo-
my Strategy on value chains) that government
should devise mechanisms to ‘incentivise’ the
private sector to seek out and support small-
holder producers. Whether such mechanisms as-
sume the form of outgrower schemes or some-
thing simpler is immaterial; such schemes have
clear potential, but always remain modest in
scale compared to less glamorous (and less re-
munerative) subsectors such as common vegeta-
bles, eld crops, and cattle and sheep.
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Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Participation in other segments of
agricultural commodity chains
Do successful smallholders participate in or ben-
et from economic activities either ‘upstream’ or
‘downstream’ of farm production (e.g. in agro-
processing)?
The received wisdom is that diversifying into
agro-processing raises a farming enterprise’s
chances of becoming protable and sustain-
able. Among our case studies, however, this was
not observed but we did observe a distinction
between individual entrepreneurs (who usu-
ally produced diverse commodities, but who did
not venture into value-adding activities so it is
difcult to say if they would benet from agro-
procesing ventures), and group projects (where
agro-processing was either practised or being
sought, but where perhaps more importance is
attached to agro-processing than is justied).
From a broader perspective, there is reason to
suppose that local agro-processing capacity can
in principle serve to stimulate local demand,
and/or reduce transactions costs. Thus, for exam-
ple, in the locale of one case study in the Eastern
Cape, the absence of village-level maize mills
means villagers seek to convert their maize into
meal through laborious hand methods (done
mainly by women, who often experience a time
decit already), or transport their maize to a
nearby town where a mill exists. Although we
cannot prove it, this absence of local milling ca-
pacity probably serves as a disincentive to grow
maize. By contrast, in communities around one
Limpopo case study, local maize milling capacity
is widely available and, probably not coinciden-
tally, is affordable.
Gender
How widely are the benets of successful small-
holder production accruing to female and male
producers, either as producers in their own right
or within farm households?
Although, according to the LFS data, commer-
cially oriented smallholders are equally likely
to be women as men, in our case studies men
predominate among commercially successful
independent smallholders, and women among
subsistence producers and group-based pro-
jects. While this could well reect a bias in the
manner in which we chose our case studies, it is
noteworthy that even in case studies involving
numbers of independent smallholders operat-
ing as neighbours, the common pattern is that
most commercially successful farmers are men
(or, more accurately, male-headed households),
whereas among the subsistence-oriented farm-
ers women predominate. While this long-stand-
ing stereotype has many exceptions, it still seems
to largely reect reality.
A number of reasons for this emerge from our
case studies and the literature. Distinctions have
to be drawn between women who are house-
hold heads versus those who are not and, among
household heads, between widows and maried
women. The disadvantages faced by women
farmers relate to household size and organisa-
tion, gender-differentiated household liveli-
hood strategies, patriarchal tenure systems, and
the emerging clashes between traditions and
contemporary realities. In some cases, mode of
support reveals a male bias, but there are many
examples to the contrary, and it is the social and
cultural factors that predominate.
For group-based projects, particular dynam-
ics are at work in respect of gender. Our casu-
al observation is that, outside of land reform,
group-based projects tend to be initiated and
dominated by women, but women-dominated
projects tend to have one or two male members,
often with the ‘ofcial’ designation of chair-
man. While it is tempting to suppose these men
were able to assume positions of leadership out
of chauvinism, close observation suggests that
these men are typically passive and accommo-
dating, and were relegated to these positions
because women considered, it advantageous to
be ‘represented’ by a man when interacting with
the rest of the community. While strategies such
as these appear to serve women well, they are
nonetheless signals of the challenges that wom-
en face in a male-dominated environment. In
cases where mixed-gender group-based projects
do end up being genuinely dominated by men,
but equally in non-project situations where a
level of coordination among farmers is needed,
it is difcult for women to assert their interests
and sometimes even to make their voices heard.
Class
Do successful smallholders have any specic class
characteristics. For example do they generally
have access to capital from other business enter-
prises to invest in their agricultural enterprises
or not?
Research
Report
xiii
In our case studies smallholders who can be de-
scribed as commercially successful tend to have
income and/or wealth from other sources, or
come from families where someone is able to
provide capital. However, examples to the con-
trary include, a case study in the Eastern Cape,
where a commercially successful smallholder be-
gan farming with modest means, stuck to farm-
ing full-time, and with diligence and persever-
ance managed to build their agricultural enter-
prise over time.
Class differences among smallholders are repli-
cated in how policy is conceptualised. On the one
hand, a common assumption that agriculture is
a ready means of reducing abject poverty is re-
ected in the proliferation of government-led
poverty reduction projects, such as community
gardens, poultry projects, etc. In this perspective,
‘agriculture is for the poor’. On the other hand,
a prevalent perspective is that available scarce
resources are best used either to assist subsist-
ence producers to commercialise, or to support
already successful ventures to become more so
which is especially appealing as those who have
their own resources are logically the best poised
to realise further success.
Although this dual approach is not wrong, im-
agining that farmers are really so easily catego-
rised is dangerous. The question is, is it possible
to achieve more synergy between the efforts to
support these distinct groups? As explained ear-
lier, farmers who initiate and those who follow
are distinct groups and recognising this dynamic
implies opportunities to use the success of pro-
gressive farmers to support poorer farmers, if
only because progressive farmers often offer the
best insights into what works. The agricultural
development policy could and should adopt a
more strategic framework based on the idea of
the ‘agricultural ladder’ or development path-
ways, as explored below.
Tenure
To what extent is tenure insecurity proving to
be a hindrance to productive investment among
smallholders, and/or inhibiting rental arrange-
ments that might otherwise result in more eco-
nomic land use?
The case studies found little or no evidence of
smallholders being constrained by operating in
former homeland areas where statutory free-
hold tenure is absent. Farmers in communal
areas who use inherited land generally do not
fear losing that land, and by implication are not
hesitant to invest in the agricultural potential of
that land on grounds of perceived tenure inse-
curity.
However, signicant tenure constraints did
emerge in respect of renting land, and de-
termining responsibility for damages to crops
caused by livestock. This dual tenure problem
obtains across many if not most communities
in South Africa’s former homelands. Lyne and
Thomson 1998 undertook a practical experiment
in selected communities in KwaZulu-Natal in the
mid-1990s, and showed a signicant increase in
the number of rental transactions and a reduc-
tion in the extent of idle land; the initiative in-
volved a consultative process of reinstating some
neglected traditional practices (e.g. sanctions for
those who allowed livestock to wander into ar-
able areas after the commonly agreed ‘planting
date’) while new practices were encouraged –
most signicantly, drawing up pro forma lease
contracts, and buy-in from tribal courts to recog-
nise and uphold such contracts. More recently,
under the auspices of a project funded by the
Water Research Commission (WRC) in the East-
ern Cape and Free State, Umhlaba developed
and implemented a ‘local rural planning process’
that involves a consultative process for develop-
ing rules and procedures for local land adminis-
tration, together with a land register. In terms of
developing the land register, the methodology
has parallels with the participatory systematic
demarcation processes being applied elsewhere
in Africa. Interestingly, the initiative is proceed-
ing in advance of the implementation of the
Communal Land Rights Act of 2004. A survey
conducted among rights holders at the WRC
sites indicates that many are interested in either
renting in or renting out, but it is too early to say
what the effect of the process has actually been.
An intervention along the lines described here
is possibly among the most efcacious that can
be contemplated as a means of promoting small-
holders within former homeland areas, but it
will not happen spontaneously. Neither will the
eventual implementation of the Communal Land
Rights Act, in whatever form, as the Act merely
lays broad procedural parameters for land ad-
ministration but does not seek to encourage
particular economic transactions, nor address
itself to the all-important question of livestock.
xiv
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
The absence or presence of rental markets is not
only an issue in former homeland areas, but can
also apply on freehold land acquired through
land reform. In one case study, restributed land
was formally subdivided so that each beneciary
household had its own plot. After a few seasons,
some beneciaries stopped producing and leased
their land to other, more agriculturally successful
beneciaries. Increasingly, government wishes to
promote this model, based largely on the belief
that group ownership is a central reason many
other (non-subdivided) land reform projects fail
to work. In this case the freehold nature of own-
ership was such that land owners felt sufciently
secure leasing out their land to others, whether
or not a formal contract was signed. On the one
hand, this reinforces the importance of the kinds
of interventions discussed for areas where rental
transactions are not backed up by the same kind
of statutory property rights. On the other hand,
it suggests a more nuanced understanding of
the options available when designing land re-
form projects, since the issue is not necessarily
individual beneciary ownership, but a system
whereby individual beneciaries can freely and
securely choose to rent (or sell?) their plots to
one another, whether or not the expense of for-
mal subdivision has been incurred.
Conclusions and
recommendations
We conclude by attempting to tie up some
of the main debates and questions running
through the study, and thereafter identify what
we regard as the priority interventions for gov-
ernment and partners in terms of supporting
smallholders.
Where to focus: subsistence versus
commercial?
Promoting of subsistence-oriented smallholders
and commercially oriented smallholders should
not be an ‘either/or’ proposition; rather, an ap-
propriate balance must be achieved. The over-
all impression of the study team is that current
policy has placed excessive emphasis on commer-
cialy oriented smallholders, seemingly based on
the belief that subsistence production is neither
a route out of poverty nor developmental. The
extent of this bias is perhaps most visible in how
land reform policy has evolved in recent years
(especially land redistribution policy), but is also
discernible in the way some irrigation schemes
are being renovated.
While we do not necessarily dispute the idea
that subsistence production will not move
households above a particular poverty line, sub-
sistence producers’ benets should be enhanced
and the advantages spread to those who do not
currently enjoy access. Subsistence producers ex-
ist in great numbers, and there is reason to be-
lieve that some interventions could allow them
to benet even more as subsistence producers.
If not addressed, could aggravate poverty and
insecurity for hundreds of thousands of house-
holds. Also, subsistence production is a naturally
good complement to households’ multiple liveli-
hood strategies, in a way that commercially ori-
ented production often is not. Subsistence pro-
duction is low-input in terms of time and pur-
chased inputs, so for relatively little investment
subsistence production can make a meaningful,
low- risk difference to the lives of many.
However, the measures that deserve the most
emphasis in future, particularly in former home-
land areas, are not specic to either subsistence
or commercial producers, thus the ‘balance’
would be determined not by policy-makers, but
by the way things evolve on the ground in dif-
ferent communities. This is desirable in and of
itself, since policy-makers and the research com-
munity cannot be sure what to prescribe in dif-
ferent situations.
Is there a role for ‘projects’?
Over the last several years government and civil
society have gradually recognised the inefcacy
of ‘projects’ in promoting poverty reduction and
employment creation. The cited shortcomings
of projects are numerous, including that their
robustness is doubtful, especially to the extent
that they seek to function as economic enterpris-
es. Also they tend to need large amounts of time
from implementers so there is little possibility of
rendering them in large numbers, that is, they
are not ‘scalable’.
However, it is difcult to say that the door on
agricultural projects is entirely closed as projects
are not always created by external project imple-
menters, but are often the initiative of people
themselves. Based on our case studies, we would
characterise these as attempts to pool scarce
resources in pursuit of otherwise unattainable
investments. Moreover, despite the free-rider
problem1 in agricultural and other projects, un-
der certain circumstances people like to work to-
gether, as in the widespread tradition of rotat-
xv
Research
Report
ing labour pooling arrangements, in evidence in
more than one of our case studies.
Spontaneous attempts are not always thought
through or well directed, but there is a limit to
what a single low-income household can accom-
plish on its own. From our case studies and by
common acknowledgement, many such group
projects are undone when they try to become
economic enterprises based on group solidarity,
absorbing vast amounts of implementer time (if
any implementers are involved, as indeed they
might be after the group has already established
itself). Therefore, perhaps there is still a role for
projects, provided that role is properly under-
stood and circumscribed. In particular, where
investments in infrastructure are more efcient
for a group than for separate individuals, and
yet where this does not oblige a group-based
enterprise, there may indeed still be a rationale
for a project. Apart from boreholes, a good ex-
ample is collective fencing around contiguous
elds (as is done in some cases through CASP).
Creating pathways and targeting
The idea of the ‘agricultural ladder’ – through
which producers at, say, subsistence level, can
graduate to commercial smallholder level, and
from there to medium-scale commercial farmer
level, etc. – has long been a staple of rural de-
velopment discussions. The logic of the ladder
metaphor is that farming at one level serves as a
means of developing skills upon which one can
prepare to move to the next level. Despite the
widespread subscription to the idea in principle,
there is little in current policy that makes it tan-
gible.
Other research has shown that land redistribu-
tion (and LRAD in particular) operates on a rst-
come-rst-served basis. While there is an ele-
ment of fairness to this approach, LRAD could
specically target black farmers who have al-
ready achieved success, and thus who are ripe
to be given an opportunity to expand. Thus we
nd, for example, that on irrigation schemes,
a handful of very successful farmers have man-
aged to expand to the extent that they are rent-
ing numerous plots from other plot holders.
Notwithstanding our generally positive view of
rental markets as a means of mediating between
those who need land and those who have it but
are less in a position to use it, at a certain point
it would be better if such individuals could be
helped to move off and possibly make space for
new entrants onto the scheme. Successful farm-
ers on the irrigation scheme wish for this, but
there is no specic mechanism to target them to
become, say, LRAD beneciaries, and whether or
not they hear of LRAD in the rst place and ap-
ply of their own initiative is left to chance.
Supposing interventions were in place to stimu-
late agriculture in the former homelands more
generally, then indeed there might be a much
larger need and opportunity to provide path-
ways for the more successful and ambitious
farmers to graduate out onto their own private
land acquired through land reform. In a sense,
the importance of municipal commonages is to
provide such opportunities for growth from a
small scale, in parts of the country where former
homelands cannot serve this function.
Priority interventions
Mindful of evidence of what accounts for ‘small-
holder success’, but also bearing in mind what
government is good at and what it can feasibly
provide at scale, we offer a small list of prior-
ity interventions for the smallholder sector. This
eclectic mix of measures includes interventions
to create an enabling environment, but also in-
cludes direct and sometimes expensive interven-
tions that seek to engage with the target popu-
lation at a large scale.
Addressing land administration in communal
areas: While not dismissing the potential im-
portance of redistributive land reform, the most
auspicious opportunity for reaching large num-
bers of smallholders and potential smallholders
quickly is to embark on land administration ini-
tiatives in former homeland areas akin to those
already successfully piloted elsewhere in the
country. Although the relationship between a
land administration initiative such as this and
the question of tenure reform is unclear, meth-
odologies like those already applied at a small
scale could be pursued on a larger, more delib-
erate pilot basis in selected communities in all
the former homelands, before proceeding to a
larger scale.
Investing in water availability: Despite their
problems, irrigation schemes lend themselves
to developing black smallholders. However,
at present these schemes accommodate only
about 31 000 black smallholders, and account
for only about 3.6% of all the land under irri-
gation in the country. While another 2% to 3%
1 A ‘free rider’ is a person who
joins a group activity or project
but enjoys the benets without
putting in a fair share of own
effort. The presence of free
riders tends to dilute the moti-
vation of other group members
and can contribute to the ero-
sion of group morale – thus the
‘free-rider problem’.
xvi
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
of irrigated land is held by smallholders outside
these schemes, smallholders account for a very
small share (5% to 6%) of the country’s irrigated
farmland. Furthermore, while in the commercial
farm sector irrigated production is more labour-
intensive than dryland arable production, by a
factor of about 4 to 1, we estimate that the la-
bour-intensity of smallholder irrigation schemes
relative to irrigated production in the large-scale
commercial sector is about 7 to 1. The key point
is that if creating conditions for reasonably large
numbers of successful commercial smallholders
is a priority, then expanding access to irrigation
is vital. Rather than going out and creating new
schemes, it is probably most practical for redis-
tributive land reform to specically target a cer-
tain amount of irrigated farmland. This does not
necessarily imply creating more ‘schemes’, but in-
stead acquiring properties that lend themselves
to subdivision so that individual irrigated plots
can be allocated to smallholders. PLAS would be
the ideal vehicle for such a targeted land acquisi-
tion strategy, provided that attention is given to
maintaining and, where necessary, restoring the
irrigation infrastructure.
The benets of subsistence production are con-
strained by the variability of rainfall, which di-
minishes the risk-mitigating effect of agriculture
as part of a multiple livelihoods strategy. While
sinking boreholes is in some instances now cov-
ered by CASP, as a scalable strategy it has its
limitations, and therefore household-based rain-
water harvesting techniques are explored in this
report. While some such approaches probably
remain too expensive for mass roll-out, there
is scope for rening the techniques to make
them more affordable and less labour-intensive
at start up, even if it is at the expense of water
storage capacity.
Investing in physical and social market infra-
structure to support smallholders: We generally
support the thinking of the Department of Ag-
riculture on intervening to improve the physical
and institutional marketing environment for
smallholders. What form these interventions will
ultimately take is still unclear; it is even more im-
possible to forecast the extent to which this in-
frastructure will succeed in linking smallholders
to formal value chains, or how many smallhold-
ers will be able to avail themselves of these new
opportunities. Nonetheless, even though some
smallholders manage to get their products to the
market despite the absence of infrastructure,
even they would benet from a more conducive
environment, as would many others who have
some potential as commercial smallholders but
are unable to overcome present challenges. Any
such measures should include efforts to address
transactions costs that impact on smallholders
who wish to benet from commercial opportu-
nities, including marketing cooperatives that as-
sist smallholders to benet from bulk discounts
on purchased inputs and have more bargaining
power when trying to dispose of outputs.
Integrating redistributive land reform within a
broader agricultural development strategy: An
important ingredient in creating appropriate
opportunities for smallholders is to conceptual-
ise pathways or trajectories that some can follow
as they move from success to success. Presently,
this concept has not really been captured in pol-
icy (even though the idea of a ‘ladder’ is broadly
accepted), and the design of redistributive land
reform is probably the weakest link.
1
Research
Report
Chapter 1: Introduction
Overview
Within the ambit of ASGISA, the government is
leading a process to dene a Second Economy
Strategy. One of the opportunities that has been
identied is the agricultural sector, in particular
fostering a larger number smallholder agricul-
turalists. Land reform provides opportunities to
address one of the constraints on smallholder
production – access to productive land – but to
date has not done so, in part because of inap-
propriate planning, cumbersome delivery pro-
cesses and inadequate post-settlement support.
Meanwhile, there is much underutilised land in
communal areas, owing generally to the percep-
tion that small-scale agriculture is not remunera-
tive.
This study is a response to a request from those
developing the Second Economy Strategy to help
identify the key elements of an implementable
programme to support the smallholder sector.
At the core of the exercise was a set of case stud-
ies of ‘best practice’ – that is, of smallholders of
various types in different places – the better to
understand the factors that account for ‘small-
holder success’, whether this be personal, con-
textual, institutional, etc.
Although the study was not designed as an
evaluation of interventions as such, in the pro-
cess of conducting the smallholder case studies
(and in combination with an extensive literature
review), the efcacy and relevance of different
intervention and support strategies also came
into focus.
For purposes of the study, we assumed a broad
denition of agricultural smallholders, inclusive
of those who operate independently as well as
those who farm in groups, and inclusive also of
those for whom farming is mainly for subsistence
purposes as well as those whose orientation is
mainly or purely commercial. (We therefore em-
ploy the awed but useful distinction between
‘subsistence’ and ‘commercial’ smallholders.)
Ultimately, we conceptualised ‘supporting the
smallholder sector’ as consisting of four distinct
strands, namely the prospects and measures for:
• improving the performance of subsistence-
oriented smallholders;
• encouraging/enabling smallholders who are
currently subsistence oriented to benet
from a more commercial orientation;
• improving the performance of commercially
oriented smallholders; and
• increasing the participation in smallholder
agriculture among those (especially rural
dwellers) who do not practise agriculture.
This report includes a brief overview of the
smallholder sector and rural development policy
(Chapter 2), an extensive literature review of dif-
ferent aspects of agricultural and smallholder
policy (Chapter 3), a summary of the main em-
pirical ndings from the study (Chapters 4 and
5), and a presentation of main conclusions and
recommendations (Chapter 6). In the remainder
of this introductory chapter, we sketch some of
the conceptual issues regarding what is meant
by ‘smallholders’ and measures to support them,
and then spell out the research questions that
guided the study and the research methodol-
ogy used to answer them. Finally, the compan-
ion volume consists of write-ups of the in-depth
case studies.
Conceptual issues regarding
smallholders and strategies
to support them
Who qualies as a ‘smallholder’ is not straight-
forward, and still more contested is who quali-
es as a ‘successful smallholder’. The contesta-
tion over these concepts is not a mere academic
distraction, but arguably a factor that has con-
tributed to South Africa’s failure to develop a
coherent and effective agricultural development
strategy. One reection of this failure is the fact
that the Strategic Plan for South African Agri-
culture – which represents the founding docu-
ment of the Presidential Working Committee on
Agriculture and is effectively the government’s
primary statement regarding agrarian reform –
says virtually nothing about specic measures
to support smallholders. Rather, the document
speaks broadly of allowing/promoting “the en-
tire spectrum of enterprises and farm sizes” (De-
partment of Agriculture 2001: 8), and even more
broadly of ensuring more “equitable access”
2
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
within the agricultural sector. The underlying
assumption is that the necessary resources and
institutions exist; we must simply modify them
to become more accommodating, in particular
to “new entrants”.
The study assumes a broad understanding of
who is a ‘smallholder’: a small-scale farmer who
derives benets from primary agriculture (those
who earn wages from farm work are not includ-
ed).2 We include within this category those who
produce mainly to generate an income as well as
those who produce primarily for their own con-
sumption, generally designating these ‘commer-
cial smallholders’ and ‘subsistence smallholders’
respectively. However, we remain mindful of the
fact that using these categories risks encourag-
ing one to imagine that these types of smallhold-
ers are static, wholly distinct groups. We do not
subscribe to the notion that smallholders are all
necessarily progressing towards becoming fully-
edged large-scale commercial farmers, nor that
agriculture necessarily represents their primary
economic activity. Our working hypothesis is that
within the continuum of those who would thus
qualify as smallholders, they may have different
needs and potentials, and a smallholder support
programme would have to bear these in mind.
The focus of this report is on ‘black smallhold-
ers’, meaning those smallholders who belong to
the African or coloured population groups.
Efforts to support smallholders are sometimes
informed by strategic assumptions as to what is
necessary and what works. One typical trap is to
seek to identify the single constraint that must
be addressed in order for smallholders to our-
ish and thrive, for example land or credit, and
thus look for ‘silver bullet’ policy interventions.
A second, more common trap is to suppose that
any programme aiming to support smallholders
must be ‘holistic’, by which is usually meant that
it must provide all types of support simultaneous-
ly on the premise that the absence of any one of
them will lead to the programme’s failure. The
essence of the rst trap is that it usually results
in interventions that are inadequate, whereas
the second tends to be unaffordable and/or
reach a miniscule number of people, as was the
case with the farmer support programmes of
the past. However, other perspectives are also
prevalent, such as ‘market development’ and
various institution-building approaches, which
tend to seek to improve the environment within
which smallholders operate, largely by reducing
transactions costs, improving access to informa-
tion, and/or shifting bargaining power in favour
of farmers.
Research questions
The original research proposal identied 11 re-
search questions (listed below). The ndings re-
lated to most of these questions are summarised
in Chapter 5, though the second-to-last is treated
more as a cross-cutting issue and thus touched
on in various places, while the last research ques-
tion is considered mainly in Chapter 6.
• Change and adaptability: How have success-
ful smallholders overcome common con-
straints (such as lack of access to capital) and
adapted to changes in the wider economic
environment over the past 5, 10 or 20 years?
What does this tell us about what it takes to
‘succeed’ or survive as a smallholder?
• Access to key means of production: How
have successful smallholders obtained ac-
cess to essential means of production such
as land, labour, capital, inputs, technology
and management advice, which were in
short supply under past government policies
and have not been available for many pro-
ducers in recent years either? Within this,
to what extent are successful smallholders
those who have had access to supportive
family or other non-formal networks, and
to what extent have these networks thrived
or foundered through the vagaries of re-
cent economic change?
• Marketing and transaction costs: What are
the predominant marketing strategies of
successful smallholders, and to what extent
have these beneted from formal institu-
tions, private sector innovations, etc.?
• Economic cooperation and coordination:
What are the main transactions and coor-
dination costs that impede higher levels of
production and/or prots? More specical-
ly, to what extent are marketing, informa-
tion or input procurement challenges dealt
with through formal or informal coopera-
tive arrangements among farmers?
• Participation in other sections of agri-
cultural commodity chains: Do successful
smallholders participate in or benet from
economic activities either ‘upstream’ or
‘downstream’ of farm production (e.g. in
agro-processing)? Is there the potential for
2 As for how small is ‘small’,
our rule of thumb is to exclude
farmers who meet Statistics
South Africa’s denition of a
commercial farmer as per the
2002 census of commercial ag-
riculture, that is, they achieve
a turnover large enough to
oblige them to be registered
for Value Added Tax.
3
Research
Report
them to participate more actively or to ben-
et more from such activities?
• Institutions and access: To what extent are
successful smallholders beneting from the
institutions that have been designed to as-
sist them, for example government exten-
sion, Micro-Agricultural Finance Initiative of
South Africa (Masa) funding programmes,
commodity organisation schemes, etc.?
• Gender: How widely are the benets of suc-
cessful smallholder production accruing to
female as well as male producers, either as
producers in their own right or within farm
households?
• Class: Do successful smallholders have any
specic class characteristics? (For example,
do they generally have access to capital
from other business enterprises to invest in
their agricultural enterprises? Are some of
them retrenched workers from the formal
sector who have invested savings in agricul-
ture?)
• Tenure: To what extent is tenure insecurity
proving to be a hindrance to productive
investment among smallholders, and/or
inhibiting rental arrangements that might
otherwise result in more economic land
use? Perhaps more to the point, what local
innovations enable people to cope with the
absence of effective tenure reform?
• Policy environment: Are there policies, im-
plemented over the past 20 or so years,
either specic to the agricultural sector or
more general in character, which have ben-
eted smallholder producers and contrib-
uted to their success?
• Implementation strategies: What are the
relative advantages and disadvantages of
different implementation strategies, for
example those that are project-based ver-
sus those that are more oriented towards
changing the environment or strengthen-
ing institutions?
Research approach and
fieldwork methodology
The study involved three main research activi-
ties. The rst was a literature review seeking
to distil international lessons and current prac-
tice in South Africa, with particular attention to
extension, market access for smallholders, and
technology development and transfer.
The second research activity was the ‘scan’,
meaning a compilation of brief descriptions of
smallholder instances selected to provide some
sort of insight as to what works and what does
not in respect of smallholder development. The
scan comprised two parts, namely inputs from
various team members themselves, drawing on
their own work and experience, and a telephon-
ic survey of provincial agriculture departments in
which they were requested to describe instances
of ‘successful smallholders’ in their respective
provinces. The rst part of the scan yielded 32
inputs, and the second part a further 29, giving
a total of 61.
The third activity was the 16 in-depth case stud-
ies. These case studies – mainly drawn from the
scan – were selected to cover a range of dif-
ferent geographical settings and production
systems, but also to ensure a balance between
smallholder situations which help us focus on
the efcacy or otherwise of deliberate interven-
tions, and those which offer insights into what
sorts of circumstances (whether individual or
contextual) favour smallholder ‘success’, even in
the absence of such interventions. The eldwork
methodology for the case studies is included as
Appendix 1.
Although in essence this was designed as a study
of ‘best practice’, in selecting case studies we
did not adhere to xed criteria as to what con-
stituted ‘success’. This was deliberate as we did
not want to impose success criteria that might
limit our appreciation of what smallholders can
achieve in reality. On the downside, a number
of smallholder scenarios selected as case studies
proved on closer inspection not to be particular-
ly successful by any criterion. By and large, how-
ever, they were also illuminating.
4
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
3 Especially odd is the decline
between the March 2007 and
September 2007 waves, given
that this was a period of rapidly
increasing food prices.
Chapter 2: Perspectives on
the ‘smallholder sector’ and
the policy environment
Figure 2.1: Numbers of black smallholders according to the LFS, 2000 to 2007
7
6
5
4
3
2
1
Source: Stats SA, Labour Force Survey, 2000-07
Main source of food
Main source of income
Leisure activity/hobby
Extra source of food
Extra source of income
Basic facts and figures
According to the LFS, there are about 4 million
black individuals (15 years and older) who prac-
tise agriculture, understood broadly. These 4
million individuals belong to about 2.5 million
different households. Figure 2.1 shows trends
in terms of individuals from September 2000
to September 2007, distinguishing between the
main reason individual respondents give for
practising agriculture. (See Appendix 2 for more
detail regarding data sources.)
For reasons that are explained in Appendix 2,
the apparent uctuations are difcult to under-
stand, and in our judgement do not necessarily
represent actual trends or changes.3 What we
do regard as signicant about Figure 2.1 is: i) the
overall magnitude of 4 million; ii) the relative
magnitudes of the different reasons for being
involved in agriculture, especially the consist-
ently large gap between farming for income
and farming for food; and iii) the steady decline
in the number of people involved in agriculture
for a main source of food over the period 2000
to 2003, coinciding with an increase in those in-
volved in agriculture for an extra source of food.
In respect of this last observation, the specula-
tion is that improved access to social grants over
this period meant that fewer people were as
dependent for their survival on agriculture than
was previously the case. If true, this would al-
most certainly signify an improvement in wel-
fare.
Broadly, we regard the 4 million black people
involved in agriculture at some level as ‘black
smallholders’, and distinguish between ‘subsist-
ence-oriented smallholders’ (those who farm for
a main or extra source of food), and ‘commer-
cially oriented smallholders’ (those who farm
for a main or extra source of income). Excluding
those who practise agriculture mainly for leisure
2000,Sept
2001,Feb
2001, Sept
2002, Feb
2002, Sept
2003, March
2003, Sept
2004, March
2004, Sept
2005, March
2005, Sept
2006, March
2007, March
2007, Sept
Number of people (millions)
5
Research
Report
Source: Stats SA, Labour Force Survey FS, September 2006
number of people (millions)
Main source of food
Main source of income
Extra source of food
Extra source of income
Leisure activity/hobby
women
men
Figure 2.2: Gender of black smallholders, 2006
0.0 0.5 1.0 1.5 2.0 2.5
purposes, subsistence-oriented smallholders
comprise 92% of black smallholders and com-
mercially oriented smallholders represent the
other 8%.
Using the September 2006 LFS, we distinguish
between black women and men involved in
farming, using the same categories of ‘main rea-
son’. Women make up 61% of all those involved
in farming, and are on a par with or slightly
more numerous than men in respect of each of
the main reasons, except for the ‘extra source of
food’ reason, in which case they exceed men by
more than 60% (Figure 2.2).
Similarly, we disaggregate by age. Figure 2.3
shows for each age range the number of people
who farm for whatever reason, the number of
people who do not farm, and the share of the
cohort who farm. The graph helps place some
perspective on a recurrent theme among those
concerned with rural development, namely the
apparent disdain of the youth for agriculture.
What the graph shows is that in absolute terms,
younger people involved in farming outnum-
ber older people, that is, the number of people
involved in agriculture declines with age. How-
ever, the number of youth who farm is smaller
relative to the size of their age cohort than is
the case for older people, at least until in their
seventies, at which stage the ability to farm is
presumably increasingly constrained by inrmity
and/or other demands on their time.
Finally, we present two gures showing the geo-
graphical spread of black smallholders, this time
in terms of households rather than individuals.
Figure 2.4 shows, for each district municipality,
the share of all black households in that mu-
nicipality who are involved in farming as deter-
mined by the average of gures from the March
and September LFSs of 2006. What it shows is
that in four district municipalities, 57% to 72%
of black households are engaged in farming at
some level: Vhembe in Limpopo, Umkhanyakude
in KwaZulu-Natal, and both Alfred Nzo and OR
Tambo in Eastern Cape. However, there are a
further eight district municipalities in which the
share is between 43% and 56%. In other words,
although the 2 million black households that
practise at least some agriculture represent only
a fth of the 11 million black households in the
country, in a number of predominantly rural mu-
nicipalities – especially those incorporating for-
mer homeland areas – the share is much higher.
Figure 2.5, by contrast, shows what percent-
age of all black smallholder households in the
country are located in different district munici-
palities. Obviously, there is some correlation
between Figures 2.4 and 2.5, in the sense that a
municipality in which a very high proportion of
the households are engaged in farming is likely
to account for an appreciable share of all farm-
ing households in the country, especially if the
municipality has a large population (which is
generally the case for those municipalities that
6
Strategies to support South African smallholders as a contribution to government’s second economy strategy, Volume 1.
Figure 2.4: Share of black households in municipality
involved in agriculture
Source: Stats SA, Labour Force Survey, March 2007
Figure 2.3: Participation in agriculture by age, 2006
Source: Stats SA, Labour Force Survey, March 2006
40
Age range
Farm
Do not farm
Share who farm
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
15–19
20–24
25–29
30–34
35–39
40–44
45–49
50–54
55–59
60–64
65–69
70–74
75–79
80–84
85+
percentage
Number of people (millions)
5
10
15
20
25
35
0
7
Research
Report
Figure 2.5: Geographical distribution of black households
involved in agriculture
Source: Stats SA, Labour Force Survey, March 2007
cover large swathes of former homeland areas).
However, the extent of concentration of black
smallholders revealed by Figure 2.5 is perhaps
surprising. Vhembe, OR Tambo and Amatole
municipalities together account for a quarter of
all black smallholders.
One obvious limitation of the LFS for our pur-
poses is that it asks very few questions about ag-
riculture, and none specically about particular
agricultural activities. The General Household
Survey (GHS) is a bit better in this respect al-
though, as indicated in Appendix 2, there is even
more reason to worry about its accuracy than is
the case for the LFS. Notwithstanding these mis-
givings, we use the 2006 GHS to convey some
sense of the relative importance of different
activities, in the hopes that the proportions are
more or less correct even though the extrapo-
lated sums are very much in doubt. The results
are shown in Table 2.1. Perhaps surprising is the
fact that the overwhelming majority who access
land use it for eld crops, relative to the rather