Strategy for Agrarian Transformation in KwaZulu-Natal

44 Pages·2015·3.65 MB·English

by  Terence Reddy

TABLE OF CONTENT

1. INTRODUCTION

2. POLICY CONTEXT

3. PROBLEMSTATEMENT

4. A NEW APPROACHTO AGRICULTURALDEVELOPMENT
4.1 Production Development Possibilities
4.2 Small Holder Development
4.3 Partnerships
4.4 Operation Pakhisa

5. FOUNDATIONS FOR AGARIAN TRANSFORMATION
5.1 Scientific Research, Technological DevelopmentAnd Extension
5.2 Agricultural Economics and Marketing
5.3 Engineering Services
5.4 Veterinary Services
5. 5 CommodityApproach
5.6 Business Model
5. 7 Agro Processing

6. PROGRAMMES FOR AGRARIAN TRANSFORMATION
6.1 Land Reform Support Programme
6.2 Agri-Village Programme
6.3 River Valley Catalytic Programme
6.4 Agricultural Communal Estate Programme

7. FUNDING MODELS

8. APPROACHTO SKILLS DEVELOPMENT

9. INSTITUTIONAL ARRANGEMENTS FOR IMPLEMENTATION

10. RURAL DEVELOPMENTCO-ORDINATION
the rural areas, and more particularly on the
1. INTRODUCTION
communal areas of the Province.

The National Development Plan (NDP) calls
The agricultural sector is seen as a primary
for an inclusive rural economy wherein rural
driver of the KZN economy, given the strategic
areas are spatially, socially and economically
advantage that the Province has in terms of
well integrated and coordinated, where
land and its natural resources. The Province
residents are economically active and food
of KwaZulu-Natal is well endowed with
secure as a result of successful agrarian
natural resources and this diversity enables a
transformation and rural infrastructure
wide variation in the type of farming and
development programmes, and having
levels of agricultural production throughout
improved access to quality education and
the Province.
health care and basic services.

This strategy document sets out a detailed
The NDP sets out a three pronged approach
approach for the transformation of the
to agriculture and rural development, namely:
agricultural sector in KwaZulu-Natal. It

• Agricultural developmentthat is based on proposes that an agrarian transformation
successful land reform, employment strategy, supported by an integrated approach
creation together with strong environmental to rural development, will in turn contribute
safeguards; towards addressing food security, job creation
and the growth of the provincial economy.
• Well-functioningand supported rural
communitiesthat will enable people to In order to reflect the new approach towards
seek economic opportunity. Key elements agriculture and the expanded mandate
of support relate to quality education, of rural developmentco-ordination,the
health care and access to basic Department has revised its vision statement
services; and as:

• The promotion of agro-processing, "A united sustainable and vibrant
agriculturalsector with thriving rural
tourism, fisheries and small enterprise
communities in balance with nature"
development based on an area's economic

potential.
The Department's Mission statement

emphasises how the vision will be achieved:
The transformation of the agricultural sector

is central to the future growth and well-being
"To promote, through partnerships,
of KwaZulu-Natal. The population of KZN
sound agricultural practices that
rural areas accounts for 54 % of the total
promotes to economic growth, food
provincial population, and therefore makes it
securityand advancement of rural
one of the most rural provinces in the
communities in KwaZulu-Natal."
country. This places considerable pressure on
the provision of services and infrastructure.
Furthermore, if poverty levels are aligned
to the rural geography it is evident that the
highest concentrationsof the poor are in

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2. POLICY CONTEXT
Following the national election of 2009, • Creation of sustainable rural enterprises,
the new administration introduced a series supported by increased investment in agro•
of frameworks which focused on five key processing, trade development, access to
strategic priorities, namely; the creation of markets and financial services;
decent jobs, rural development, education,
• Improved integration and coordination
health and fighting crime and corruption.
of rural developmentacross all spheres
These frameworks have a direct impact on
of government.
the transformation of agricultural and the

rural communities in the Province of KwaZulu•
Natal. 2.2 New Growth Path (NGP)

The NGP places jobs and decent work at the
2.1 The MediumTerm Strategic
centre of the macro-economicpolicy. It set a
Framework(MTSF)
target of 5 million jobs by 2020 and set out

priority sectors for interventions. The NGP
In 2009 government introduced the concept
of the MTSF to align government programmes set a target of increasing the smallholder
sector by 300 000 householders with 145
and priorities with the term of office of each
administration. Fourteen (14) priority areas 000 additional jobs coming from the agro•
processing sector. The NGP provides broad
were identified, with agriculture contributing
policy guidelines for the agricultural sector:
directly to the outcomes associated with job

creation, comprehensive rural development,
and environmental assets and natural • Restructuring land reform to support
resources protection. In the second cycle of smallholder schemes with
the MTSF (2014- 2019) the rural sector will comprehensive support around
focus on seven (7) imperatives to support an infrastructure, marketing, finance,
inclusive and integrated rural economy. These extension services;

imperatives are as follows:
• Upgrading employment in commercial
• Improved land administration and spatial agriculture, especially through improved
planning for integrated development,with a worker voice;
bias towards rural areas;
• Measures to support growth in commercial
• Improved and sustainable agrarian and land farming in support of national food security;
reform;

• Acceleration of the land claims processes
• Smallholder farmer developmentand
and better support to new farmers
support (technical, financial and
following the transfer of land;
infrastructure);

• Support for fishing and aquaculture;
• Reduced rural unemployment;

• Programmes to ensure competitive pricing
• Increased access to quality basic
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of inputs, especially fertilizer.
infrastructureand services, particularly
education, healthcare and public transport;
2.4 Provincial Growth and
2.3 National Development Plan (NDP)
Development Strategy (PGDS)

The NDP has been adopted as an overarching
In 2011 the KwaZulu-Natal Provincial
framework to steer the government's
Government established the Provincial
development path for the next 16 years. The
Planning Commission and began with the
NDP reaffirms the five strategic priorities of
process of reviewing the Provincial Growth
government, with the interventions proposed
and Development Strategy (PDGS). The PGDS
for agriculture being located within the
was adopted by Cabinet in August 2011 and a
Inclusive and Integrated Rural Economy
Provincial Growth and Development Plan was
chapter.
adopted in August 2012.

The rural areas of South Africa are
The PGDP identifies seven (7) strategic goals
characterised by an unusually high level
which are aligned to the MTSF outcomes.
of poverty and unemployment,with very
These have been translated into thirty (30)
limited employment in the agricultural
strategic objectives which have been assigned
sector. The densification of settlements in the
to eighteen (18) Action Working Groups.
then "rural reserves", resulted in an advanced
Action Working Group 1 is chaired by the
and diversified commercial farming sector
DARD and drives activities and report on
adjacent to impoverished, densely populated
these activities.
communitieswith limited economic

opportunitiesand minimal government
One of the key strategic goals relates to job
services.
creation as unemploymenthas been identified

as one of the major structural constraints
Agriculture is seen as the primary activity in
within the Province and contributes to high
rural areas, and is expected to create 1 million
levels of poverty and income inequality.
jobs by 2030. In order to achieve this the
The agricultural sector is of key strategic
sector needs to expand irrigation schemes,
importance given the comparative advantages
convert under-utilised land in communal areas
that KwaZulu-Natal possesses with regard to
and land reform projects into commercial
its land and resources.
production, pick and support commercial

agricultural sectors that have the highest
The agriculture sector is expected to create
potential for growth and employment. The
employment opportunities, increase the
NDP also proposes value chain strategies be
area under production, increase the value
developed for new entrant farmers. The NDP
of agricultural contribution to the provincial
identifies the following commodities with a
economy, and provide a support programme
potential for growth and job creation, namely
for commercial farmer development. The
cotton, sugar cane, citrus, tropical fruits, table
Action Working Group focusing on agriculture
grapes, and vegetables.
would, however, need to work with
commercial agricultural commodities in order
to realise the potential of the sector.

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The importance of the Operation Phakisa
The sectors that are relevant to KwaZulu- Natal
methodologywas emphasisied by His Excellency,
include livestock, sugar cane, poultry,
the President Mr JG Zuma in his State of Nation
horticulture, biofuels, forestry and aquaculture.
Address (2015) as part of his 9 point plan:
In response to the National Development Plan

and other strategic National and Provincial
frameworks this strategy seeks to set out 1. Resolving the energy challenge.
an agrarian transformation approach for 2. Revitalising agriculture
KwaZulu-Natal through the radical change for and the agro-processingvalue chain.
commercialisation of agriculture by implement a 3. Advancing beneficiation or adding value
series of new programmes; namely, Land Reform to our mineral wealth.
Support, Inclusive Agri-village Development, 4. More effective implementation of a higher
River Valley Catalytic and Communal Estates impact Industrial Policy Action Plan.
Programme. The programmes are supported on 5. Encouraging private sector investment.
four building blocks; namely, strong scientific 6. Moderating workplace conflict.
research and extension services, a commodity 7. Unlocking the potential of small, medium
approach, a specific business model for and micro enterprises (SMMEs),
commercial agriculture, and growth in the cooperatives,townshipand rural
agro-processing sector. Through these enterprises.
programmes and their associated projects, the 8. State reform and boosting the role of
agricultural sector will contribute largely to the state owned companies, information and
development of rural areas. communicationstechnology (ICT)
infrastructure or broadband roll-out, water,
The implementation of the Agrarian sanitation and transport infrastructure as
Transformation Strategy will promote food well as
security, create new jobs in the rural areas, 9. Operation Phakisa aimed growing the
and grow the agricultural sectors contribution ocean economy and other sectors
to the GDP of the Province. This will be done in
partnership with interested and affected

stakeholders in the rural areas of KZN with the
3. PROBLEM STATEMENT
aim creating thriving, stable and vibrant rural

communities.
3.1 Rural underdevelopment

2. 7 Operation Phakisa
The implementation of discriminatory land

legislation since 1913 resulted in most of the
Operation Phakisa is a new approach adopted
African population not only being dispossessed
by governmentto foster speedy implementation
of land, but an erosion of culture, livelihoods,
of government initiatives, largely arising out
and being confined to the "reserves". These
of the National Development Plan and the
"reverses" where predominately hilly, rocky
Provincial Growth and Development Plan
areas with thin top soils, and unpredictable
collaborative efforts by various government
rainfall, and located in the remotest parts of the
departments and agencies, together with private
country. This spatial pattern remained the norm
sector and civil society formations. The Province
for most of the century and the resultant impact
has made use of this methodologyto develop
inherited by today's generation is that rural areas
plans for Poverty Eradication and Makhathini
are characterised by land degradation, poor soil
Development.

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quality, food insecurity, poor infrastructure and 3.2 National agriculturalstatus

basic services, and high levels of unemployment.
The agricultural sector widely recognised as
Furthermore, homeland administrations had
sectors with significant job creation potential
virtually no resource base of their own, and the
and with strategic links to beneficiation
central state provided them with few subsidies.
opportunities. However, between 1994 and
As a consequence the homeland regions ended
2012, the real contribution to GDP of Agriculture,
up with few educators, police and health workers,
Forestry and Fisheries (AFF) increased by 29%,
and suffered from severe underinvestment
while employment declined by 30% to 40%.
on both economic and social infrastructure.
This combination of slow-to-modestgrowth and
The Agrarian Transformation Strategy aims to
declining employment, in fact continues a longer•
redress these challenges through the provision
term trend evident since at least the 1970s. The
of agricultural support, and co-ordinating the
challenges facing agriculture are numerous:
provision interventions that improve the quality
rising input costs, an uneven international trade
of life of rural communities.
environment, lack of infrastructure (rail, harbour,
electricity), and a rapidly evolving policy and
production environment. At the same time,
transformation of the sectors has been slow and
tentative.

Between 1950 and the present, the number of commercial farms in primary agriculture has declined
from almost 120 000 to around 40 000

Figure 1 Long-term trends in number of farm Figure 2: Long-term trends in farm employment
units and average farm size

~ 120,000t-----=----------=-1
j100,ooo~----------------i f
] so.ooo 1.soof ~1000+-------~~--------i
01§1 06, 00, 0000 0 1 , 0 0 0 1-~ ~;g~ f a o60o0 + +-=~ - =------~----------------------°...'.-1-_._._._._., -------j
z 20,000 -t--------t

This decline has been accompanied by a
The challenge of growing the smallholder sector
commensurate increase in average farm size,
is closely tied up with the challenge of making
and a change in the technology mix on farms. smallholder agriculture more remunerative
In short, as farms grow larger, they tend to rely - presently, more than half of all smallholder
less on labour and more on capital and chemical households live below the poverty line.
inputs. The overall trend has been one of-job
loss.

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Overall the agricultural sector in KwaZulu-Natal
The agricultural sector's current constrains can
faces several constraints that have resulted in a
be summarised as:
significant decline in production and job losses.

• Decline in the number of commercial farming These constraints include inadequate access to
entities leading to job losses; funding for infrastructure, land reform processes,
• Rise in the cost of inputs and slowing down increased competition due to international
in the increase in the price of commodities pro subsidisation, and access to lngonyama Trust
duced; Land for agricultural production. In addition,
• Inadequate access to funding for agricultural the dramatic decline in the scientific base within
production and infrastructure support for the agricultural sector has led to a position
communal agricultural development; where the Province is under-capacitated
• The collapse of land reform farms due to to undertake scientific research and the
among other reasons lack of skills, knowledge identification of agricultural potential.

of agricultural production and a sound agricul
tural adapted decision making system; 4. A NEW APPOACHTO AGRICULTURAL
• Lack of or very little integrated support among DEVELOPMENT

the three spheres of government and private
sectors to increase agricultural production in The Province of KwaZulu-Natal is strategic
rural areas; located to use agricultural and agro-processing
• Insufficient business management skills and as a catalyst for the growth and prosperity. The
institutional arrangements; Province of KwaZulu-Natal is well endowed with
• Lack of scale of economy to leverage lower natural resources and this diversity enables a
prices for inputs and bargain for better prices wide variations in the type of farming and levels
for the produce Agricultural land being of agricultural production, however, there needs
allocated to non-agricultural activities. to a radical improvement of the mandatory
services that are provided by the Department,
3.3 Provincial agriculturalstatus together with innovative delivery models. The
Department aims to:
Agriculture as a primary sector contributes
about 4,4% of the Provincial GVA. However, • Encouraging a shift towards more labour•
KwaZulu-Natal produces 30% of the national intensive agricultural subsectors;

agricultural output and hence contributes
• Encouraging fuller use of land within
significantlytowards creating formal and
commercial farming areas, especially
informal employment. Furthermore, over 30%
via conservation agriculture I climate smart
of the Provincial GVA in the manufacturing
agriculture and land redistribution;
sector can be attributed to the "food, beverages

and tobacco", and "wood and paper"
• Strengtheningthe smaller stratum of large•
industries, which are directly related to outputs
scale commercial farms, which account for a
form the agricultural sector. The primary
disproportionateshare of farm jobs, and
agricultural sector contributes over 7,5% to the

total employment across all Districts. The sub
• Promoting a better balance between large•
section that follows briefly describe some of the
scale commercial farms and smallholder farms
key commodities in the Province
via land reform and developmentwithin the
former KwaZulu Administrationareas.

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