THE CHANGING PROFILE OF SMALL-SCALE SUGARCANE FARMERS IN SOUTH AFRICA MJ EWEG 1

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1 THE CHANGING PROFILE OF SMALL-SCALE SUGARCANE FARMERS IN SOUTH AFRICA MJ EWEG 1 South African Sugarcane Research Institute, P/Bag X02, Mount Edgecombe, 4300, South Africa martin.eweg@sugar.org.za Abstract There have been many changes in South Africa since the first democratic post-apartheid government was elected in The agricultural sector has been at the forefront of many of these changes with adjustments in demographics and land redistribution through land reform policies and the associated urgent need to capacitate farmers. The changing aspirations and the many social, cultural, institutional and agronomic constraints are discussed in this paper. The expectation exists that the small-scale farmer should constantly perform at an increasing production level. The reality is, however, different and reasons for their low level of performance that gives rise to the production gap between large and small-scale farmers will be explored. South African agriculture must pursue a path of sensible and sustainable reform. Extension services are ideally positioned to embrace this reform and offer institutional support to help reduce the production gap within the changing demographics of the South African sugar industry. Some solutions are offered for small-scale farmers to overcome the remnants of the past separate development system and to be fully included in becoming more meaningful contributors to the agricultural economy and Broad Based Black Economic Empowerment (BBBEE). Keywords: small-scale farmers, small-scale growers, land reform, land redistribution, extension Introduction The sugar industry has approximately farmers who provide raw material to the 12 sugar mills in South Africa. Only 1700 of these are large-scale commercial farmers, farming on freehold land and producing approximately 88% of the national annual production of 2.4 million tons of sugar. The remaining are small-scale growers who farm on plots of less than 30 hectares, mostly on traditional communal trust land. These growers occupy roughly hectares of land, or almost 20% of the total area under cane, yet account for less than 12% of the annual production (SACGA, 2005). There are also a growing number of medium-scale farmers who are beneficiaries of the Land Redistribution for Agricultural Development (LRAD), or have bought their land through the willing buyer, willing seller process. Thus, the majority of the large-scale farmers are white and the majority of the small-scale and medium-scale farmers are black. However, since 1994, the racial demographics of cane farmers and the distribution of cane land have slowly but steadily been changing (Table 1). In 2004 the sugar industry was required by government to supply a racial demographic breakdown of farmers and land holdings, despite the fact that records of this nature had ceased in the early 1990s. 1 Martin Eweg is the Principal Extension Specialist for small-scale farmers at the South African Sugarcane Research Institute, Mount Edgecombe, South Africa.

2 2 When production levels were measured, there was clearly a gap in yield per hectare between smallscale and large-scale farmers (Table 2). This gap, although significant, may not necessarily be related to profitability. Table 1. Area under cane by racial grouping (1000 s ha). Year MCP White Indian Coloured Black LSG SSG LSG SSG LSG SSG LSG SSG LSG SSG 1991/ / / / Table 2. Cane production by the different racial groups (tons cane/ha). Year MCP White Indian Coloured Black LSG SSG LSG SSG LSG SSG LSG SSG LSG SSG 1991/ / / / By virtue of the differing culture and educational backgrounds, as well as the farming systems and production levels, it is necessary to provide two parallel but differing extension services to these farmers. There are some necessary conditions for extension to evolve, and these include the assembly of information that is systematically made available of good or new agricultural practices suited to a particular environment, which will be based on the accumulation of experience and rudimentary or applied advanced research findings (Jones and Garforth, 1997). It is postulated that many of the small-scale South African farmers who are engaged in agriculture are circumstantial farmers and may not be farming for a living, but are positioned by default, and may not have chosen this particular lifestyle path if the circumstances were different. It is for this reason that the transfer of information is a challenge for Extension. The South African government strategy aims to place in the hands of previously disenfranchised black people 30% of the freehold titled land by The sugar industry has embraced these challenges. If one looks at the number of hectares as a percentage of the total area that is being farmed by black farmers, then the sugar industry is well on track to achieve the Government objective. If the objective is to have this land in the form of freehold title land, which the Government initiative is understood to be, then there is a long way to go. A further challenge exists where Extension services are required to meet the aspirations and the skills deficiency of these new farmers. Constraints and challenges Small-scale in the context of the South African sugarcane farmer refers to those producing sugarcane on areas of less than 30 hectares, and makes no reference to freehold titled land or communal land holdings. More than 45% of the province of KwaZulu-Natal is held in trust by the Zulu King and is administered by the Ngonyama Trust Board with the assistance of local government structures and the Department of Agriculture and Environmental Affairs (DAEA). To this land there is no title for individual farmers - although there are an increasing number who may have documented permission to occupy (PTOs), which can almost be viewed as a precursor to eventual title.

3 3 It can reasonably be questioned why there is an enormous production level gap between the smallscale and large-scale farmers (Table 2). The industrial average on area harvested is 66 tons/ha for large-scale farmers and 33 tons/ha for small-scale. This 100% variance requires investigation and understanding in light of the Limited Input Sustainable Agriculture (LISA) system, which is being practiced aggressively in many parts of the developing world. One of the dangers will be the tendency to engage in nutrient mining by crops, with the consequential downward spiral of the land s ability to continue to produce crops. During investigations and discussions with knowledgeable people of the rural agricultural community, a number of questions arose that require clarity. It is assumed that the majority of small-scale farmers want to close the production gap and would like to move toward the higher production levels from the position of subsistence and poverty. Historically, the farmers of southern Africa were primarily pastoralists and subsistence by nature, less concerned with the planting of crops. This presents a number of challenges when attempting to create conformity to the large-scale western expansive system. The following are areas of constraint, and some may offer opportunity and a challenge for extension and researchers. The lack of financial access to developmental capital borrowings and operational loans has discouraged the small-scale agricultural sector. The sugar industry is fortunate to have had a financial aid system for more than 50 years now that holds the deliveries to the mills as security on cession. This may have inadvertently encouraged many to aspire to farming as a way of life, in that it is the only commodity that allowed new entrants access to financial borrowings, thus possibly creating a large proportion of land users as opposed to real farmers. The cost of inputs is closely related to economies of scale, and small-scale farmers, by virtue of the environments in which they operate, are not able to exploit the savings in bulk buying. The fertiliser requirement alone can cost as much as 80% more than many large-scale operations. This offers the opportunity for the formation of co-operatives, or buying syndicates, as well as farm area consolidation. Rural drift of young people to the major cities has created an imbalance of families and perpetuated the system of migratory labour that was so common in the South African mining industry many years ago. More recently, there has been a reversal in this trend, with young people moving back to the rural areas. This may be due to a change in attitude of young people to farming, as fewer and fewer jobs become available in the cities. Circumstantial farmers. It is estimated that at least 30% of the small-scale sugarcane farmers could fall into this category. These farmers risk losing their access and right to use the land if they have no crop on it, which is especially true for sugarcane. An added problem is the regular confrontation between stock farmers and crop farmers in many areas, which discourages the proliferation of crop farming, given that there are very few fences erected. Land availability. This is a hotly debated issue. Whilst there may appear to be many hectares of unused land in the rural areas that would be suitable for planting, this land is entitled to other individuals who are not farmers. It is this debate that has encouraged the recent developments of combined farming or the formation of co-operative systems that encourage the farmers to pool their land resources. This apparently sensible western system is foreign to the culture of many of the black farmers and it will require time for the culture to change. Further, there is a tendency to victimise those who are successful and standing above the crowd in a predominantly socialist society. Farmers who are high producers will not easily convince the traditional authority to allow them access to more land, but it is these farmers who are progressing towards commercialism. Land acquisition. This has been a primary objective of many black people who were for so long marginalised and disenfranchised, and the Land Reform policies in South Africa are correcting

4 4 this imbalance. It is, however, a concern that this policy is satisfying the primary aspirations and objectives of land ownership, but neglecting the all important aspect of farming capacity and business acumen in the new generation farmers. The acquisition of title to the land will not necessarily mean a commensurate increase in production level, which I believe is driven by success and economic return on effort applied. The reliance of small-scale farmers on contractors to perform many of the farming activities remains probably the most restrictive issue to success. These contractors have very few skills in managing their own businesses, which are often in chaos, and they tend to extract prices for services that the farmers are unable to support. The contractors generally have very poor customer relations and manage their businesses through fear and the threat of withholding services to those who dare to challenge them. The small-scale farmer is wholly dependent on the services of a contractor to carry out the cropping functions that require machinery. The farmer can do everything correctly, have the perfect crop for harvest and is now at the mercy of the harvesting and haulage contractors. Essentially the farmers are required to take control of their own businesses and allow the wellunderstood supply and demand system, and freedom of association, to dominate. Household drawings. It is common practice for small-scale farmers not to re-invest the profits of the farming business back into the farming enterprise, as the draw on the household income is extensive, with funeral expenses, schooling and food being priorities. Political association. Differences within a family or community of political affiliation are not readily tolerated, although the situation is certainly improving, as there is a new liberal generation of free thinkers that are being developed. Modern technologies such as television and cellular communication and improved levels of education are all playing a part in improving knowledge levels and tolerance. Cultural constraints such as the restriction placed on farmers from working the land after deaths and funerals can vary. For a community member this will be only three days, but a family member s death may require a delay of 15 days before going back to the fields. If this should fall over a critical period, there could be a resultant crop loss. There are many farmers who are working in the major centres and are only available over the weekends, which essentially means that they will never be available for technology and information transfer. As it is the head of the household who makes farming decisions, and those who are resident at home who do the work, it is reasonable to assume that many poor and uninformed decisions are going to be taken by these often absentee household heads. Age and gender are often skewed, in that the children are not encouraged to participate in the farming business and most of the responsibility for work activities lies with the elderly generation, who are probably recipients of old age pensions. This, coupled with low literacy levels, will require a substantial amount of people development - and only then can the agricultural information be applied. Labour availability on the farms is becoming an increasingly restrictive factor in the sugarcane industry, for commercial and small-scale farmers alike. Whilst it is necessary for the farmers and contractors to comply with the many laws governing the employment and salaries of labour, there has not been a corresponding maintenance of the level of work output. It is generally believed that much of this is due to the poor health of the farm workers and an inability to achieve the levels of production as in the past. Workers do not want to work on the farms anymore and there are an increasing number of foreigners being employed, particularly as cane cutters. Diversification can be a constraint for the small-scale farmer, who is now required to gain knowledge on many enterprises and will be required to deal with a number of extension specialists. One of the greatest advantages of being a sugarcane farmer in South Africa is that there is no requirement for the farmer to engage in product marketing - the SA Sugar Association manages this.

5 5 Institutional constraints in the form of a lack of financial access is obvious, but there are a number of less obvious areas in which the formal institutional arrangements applied in the SA sugar industry may have failed the small-scale farmers in offering adequate protection. These farmers are subject to Traditional authority, Local government, Mill Cane Committee authority, and Global fluctuations all upon a low knowledge base and increasing legislation. There is also a tendency to elect a leader to represent the community, and then blindly follow even if there may be dissatisfaction. This is probably more cultural than institutional. The reliance of small-scale farmers on the institutional chaos of the contractors in this industry is, as mentioned earlier, the single most restrictive factor to success. On the positive side, the excellent institutional arrangements provided by the SA Sugar Association and the SA Cane Growers Association for all sugarcane farmers has been the best of any agricultural sector anywhere in Africa. No records or poor record keeping is another reason why the farmers are unaware of the profitability or lack thereof of the farming business. Farmers generally have no idea of what their costs of production are, and hence are unable to know whether their enterprise is profitable or not. The tendency to be risk averse, less innovative and less entrepreneurial than other developing sectors, such as those found in Asia, may be a further factor to overcome. Discussion The obvious solution to the array of diverse challenges that face small-scale farmers and their support service providers is to consolidate farming efforts and provide a unified support service. To this end the provincial DAEA and the South African Sugarcane Research Institute (SASRI) have for the past 10 years participated in a Joint Venture partnership in providing services and information to farmers. According to a review report (Owens and Eweg, 2002) on the partnership, The JV is not pushing sugar, it is pushing development. This idea was further expanded by Uwe (1997) who said, Extension which is not in touch with and does not significantly contribute to improving the life situation of its clientele has lost its legitimisation. Professional and well-informed Extension workers are able to improve the awareness and increase the knowledge base of the emerging farmer as well as those who would be considered advanced and progressive. One of the most regular requests from farmers is to provide assistance in managing their farms as a business (Owens and Eweg, 2002). This need is currently being addressed by SASRI with the development of the Sugar Grow business board game. It is anticipated that, in the future, rural populations will undoubtedly be better educated, and their exposure to the mass media will continually reduce their isolation on a national and international level (Jones and Garforth, 1997). However, the challenges remain. Recent calls by prominent government officials and politicians to discontinue the extension services provided by government have largely been idle threats, made on the grounds of internal institutional difficulties being experienced in managing these services, and the apparent lack of tangible evidence of improving the yields of farmers. More importantly, Extension is able to make a difference if the farmers are at the stage of wanting to make the change from small-scale subsistence to entrepreneur or large-scale. There is also little hope of successful intervention in any strategic plans that may be devised for the upliftment of the small-scale farmer without financial support and commitment of government.

6 6 Many falsely believe that black South Africans aspire to be farmers, but, in a recent survey conducted by the Centre for Development and Enterprise (CDE), only 9% of those interviewed wanted to become farmers. South Africa s most pressing and neglected social dynamic is undoubtedly urbanisation and land acquisition in these regions (CDE, 2005). In rural farming communities there is no longer an urgency to succeed in farming activities, as the revenue obtained from these activities is now only a supplement to the social grants that many households are surviving on. It is not surprising that many modern young people are not interested in farming as a career, when they have witnessed just how hard their parents struggled to survive on the farm. Large farms must continue to become larger to generate a reasonable income off the land, given the increases in production costs that are outstripping returns. The same must be said for the shrinking margins of the small-scale farmer. SASRI is ideally positioned to take full advantage of the research opportunities that exist in closing the existing production gap, but this will require some aggressive external sources of support funding. It is most often not possible to simply apply research outcomes to smallscale farmers without taking into account the many constraints discussed, and participatory dynamics are a key to getting the farmers to buy in. The contribution of the large-scale commercial (white) farmers in offering support and mentorship is often overlooked, and there is not enough credit given to the real desire that the majority of these farmers have to see successful neighbours. Increased success in the community will often lead to improved security and better livelihoods. Conclusion There is, no doubt, room to improve the production levels of the small-scale sugarcane farmers in South Africa. The limited capacity that is available to offer services to these thousands of farmers must be channelled to those who are essentially farmers who derive a large portion of their income from farming, and allow the remaining land users to be serviced where capacity is available. It is noted that as little as 10% of income for deep rural households is derived from agriculture (CDE, 2005). I am conscious of the valuable contribution that remittances, often derived from the agricultural sector, play in the total household income of the rural community. There is no easy resolution for the farmers who are absentee or are available only over the weekends, and this will continue to pose a challenge for extension officers. Given the many constraints of these farmers a matrix of solutions needs to be available, and only offered when the time is right for reception. Title to land (ownership) will not necessarily change the way in which the farmers manage their operations, but it will allow added security for farmers to access vital capital resources for further development. These small-scale farmers will be the large-scale farmers of the future, and their success is largely dependent on the support offered. Acknowledgements The author gratefully acknowledges the input of and personal discussions with Mr John Mbatha, Project Planning section of the KwaZulu-Natal Department of Agriculture and

7 7 Environmental Affairs, and Mr Walter Ntuli, President of the KwaZulu-Natal Agricultural Union. REFERENCES CDE (2005). Land Reform in South Africa: A 21st Century Perspective. Research Report No. 14, Centre for Development and Enterprise Research, pp Jones GE and Garforth C (1997). The history, development and future of Agricultural Extension. In: Improving Agricultural Extension: A Reference Manual. FAO Owens ME and Eweg MJ (2002). Extension Delivery for Small-scale Sugarcane Growers in South Africa: A Review of the Joint Venture. Case Study for the World Bank. SACGA (2005). Statistical data G/215/2005, 1995/ /2005. South African Cane Growers Association, Mount Edgecombe, South Africa. Uwe JN (1997). Alternative Approaches to Organising Extension. In: Improving Agricultural Extension: A Reference Manual. FAO 1997.