Restructuring South African Agriculture¶
Merle Lipton; Michael Lipton (1994). Restructuring South African Agriculture. IDS Bulletin, vol. 25 no. 1. Institute of Development Studies.
| Type | journal article |
| Scope | Economics and economic history of apartheid |
| Method | policy analysis |
| Period studied | 1950–1994 |
| Regions | South Africa, Bantustans/homelands, White commercial farming areas, Natal, eastern Transvaal |
| Themes | agriculture land, bantustans removals influx, inequality poverty unemployment, transition post apartheid, labour markets wages, demography urbanisation, business and state |
| Citation key | lipton1994 |
Argument¶
The Liptons argue that agricultural reform should be a priority for a post-apartheid government, against claims that agriculture is a declining sector and Black farming is beyond revival. Apartheid-era regulation produced a dualistic, over-capitalised and heavily protected White agriculture alongside a discriminated-against Black smallholder sector. This misallocated resources and probably reduced rather than raised farm employment. A larger labour-intensive smallholder sector would be more efficient and would create livelihoods more cheaply than urban jobs. It would also ease pressure from rural-urban migration. They propose land redistribution (including tenancy and market-based purchase), reform of marketing boards and pricing, and state support services redirected to Black smallholders. The case is made by policy argument and cross-country comparison, with little new South African data.
Evidence and method¶
Secondary literature and cited studies (e.g. van Zyl 1991, Rimmer 1993 on drought relief, Thirtle et al. 1993 on total factor productivity, Duncan 1992 on marketing and pricing, World Bank mimeos). Comparisons with Japan, Taiwan, South Korea, Latin America and Africa. A few aggregate figures on rural population, agriculture's share of GDP and the extent of controls. No original archives or surveys are used.
Place in the debates¶
- Did apartheid keep more people in agriculture than development would otherwise have implied? (see Farm labour: mechanisation, labour shedding, wages and labour control). Rejects this view. Argues apartheid probably reduced agricultural employment by encouraging mechanization on White farms and suppressing smallholders, so South Africa 'deagriculturized' prematurely.
- Is Black peasant farming 'destroyed' and part-time farming a sign of unseriousness? (see Agricultural policy, productivity, farm size and land reform). Argues pessimists confuse cause with effect. Discrimination removed the incentives, part-time and diversified farming is normal worldwide, and recent easing of restrictions has already raised Black output.
- Industrialization versus labour-intensive smallholder agriculture as the route for post-apartheid development (see Agricultural policy, productivity, farm size and land reform). Favours a reformed labour-intensive agriculture as a lower-cost source of livelihoods, complementary to urban growth and not an inferior 'hewers of wood' option.
- Role of the state and markets in agrarian reform (see Agricultural policy, productivity, farm size and land reform). Favours market-oriented deregulation of marketing boards and prices, combined with active state support services and land measures such as a progressive land tax and land ceilings.
Findings¶
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Rural dwellers were a large share of the population, mostly Black and the poorest in the country. (p. 1)
In 1985, they accounted for 37 per cent of the total population, and 47 per cent of Africans.
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Apartheid-era agriculture was one of the most heavily regulated in the world, with land and labour mobility restricted. (p. 1)
An extensive range of controls restricted African land ownership, and even renting, to under 14 per cent of South Africa's land and severely restricted the mobility of labour.
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Agriculture's share of GDP fell sharply, which the authors read as premature deagriculturization. (p. 2)
which declined from 20 per cent in 1950 to about 6 per cent now
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The authors reject the claim that apartheid kept excess people in agriculture; they argue it reduced employment. (p. 2)
far from apartheid having kept more people in agriculture than expected at South Africa's stage of economic development
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State-encouraged mechanization on White farms was meant to limit the Black presence in 'White' areas. (p. 2)
in order to keep down the number of Blacks in 'White' areas
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Limited recent easing of restrictions has already stimulated Black farm output, which counters the 'destroyed peasantry' view. (p. 3)
The recent limited easing of restrictions has already stimulated increased production from Black farmers
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Agricultural livelihoods require less capital per job than urban jobs, and South African research confirms this. (p. 4)
Research by van Zyl (1991) and others has confirmed for South Africa the world-wide pattern of less capital requirement per job in agriculture
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The main risk in land reform is that too little land is transferred, not that the state over-reaches. (p. 4)
A greater danger in South Africa is too little transfer of land rights to Blacks.
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Marketing boards were controlled by White producers and funnelled resources to large White farms. (p. 5)
The more than two dozen statutory and (usually) monopsonistic Marketing Boards were dominated by White producers.
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Recent market-oriented shifts reduced the capital intensity and raised productivity on White farms. (p. 5)
has already led to a reduction in capital-intensity and to improvements in total factor
Evidence ledger¶
Sources used¶
| Source | Kind | Period | How used |
|---|---|---|---|
| Population/rural share statistics and projections (1985 rural population share; projection to 2010), source unspecified | official statistical series | 1985; projected to 2010 | Establishes the size of the rural population (37% of total, 47% of Africans; 12.5m rising to 16m) to argue for rural livelihoods. |
| Unattributed national accounts figures on agriculture's share of GDP (20% in 1950 to about 6% now) | national accounts macro | 1950 to early 1990s | Supports the claim of premature 'deagriculturization' compared with countries of similar GDP per head. |
| Unattributed information on rural incomes, nutrition, education and health access, and unemployment (about 40% of economically active outside the formal sector) | other | Early 1990s | Asserted basis for rural dwellers being the poorest and for high unemployment justifying rural job creation. |
| Van Zyl and van Rooyen 1991, 'Agricultural production in South Africa' (and van Zyl research on capital per job) | secondary literature compilation | c. 1991 | Cited as confirming that agriculture requires less capital per job than urban sectors and has strong employment multipliers. |
| Rimmer 1993, 'Debt relief and the South African drought relief programme' (Land and Agriculture Policy Centre) | secondary literature compilation | 1993 | Shows that most of almost R4bn of drought relief went to bail out indebted White farmers, with little to emerging Black farmers. |
| Thirtle, Sartorius von Bach and van Zyl 1993, TFP growth in South African commercial agriculture 1947-91 | secondary literature compilation | 1947-91 | Supports the claim that market-oriented reforms reduced capital intensity and improved total factor productivity on White farms. |
| Duncan et al. 1992 (World Bank, agricultural marketing and pricing); Sunnyside Group 1991 (red meat industry); Lipton 1993 | commission or official report | 1991-1993 | Cited for oligopolistic structures linking Marketing Boards and large processors, blocking small-scale operators. |
| Lipton and Lipton 1993, 'Creating Rural livelihoods' (World Development 21(9)) and Binswanger and Deininger 1993 (World Bank mimeo) | secondary literature compilation | 1993 | Relied on for evidence that easing restrictions stimulated Black farm output (market gardening, sugar, tropical fruit) and on comparative farm-size efficiency. |
| Apartheid-era agricultural controls and statutory Marketing Boards (land ownership limits, marketing and pricing of up to 80% of production) | legislation gazette | apartheid era | Described to show a heavily regulated agriculture and the discriminatory dual structure. |
Inference¶
Quantification: Illustrative figures.
Policy-argument essay that relies on assertion, general development economics reasoning (factor endowments, small-farm efficiency), cross-country comparison (Argentina, Brazil, Japan, Taiwan, Korea, Ecuador) and a few cited studies; it builds no systematic empirical analysis.
Key claims¶
| Claim | Basis | Strength |
|---|---|---|
| Rural dwellers (37% of population, 47% of Africans in 1985) are the poorest in South Africa, and their number will rise to 16m by 2010, requiring rural livelihoods. (p. 1) | Unattributed population figures and projections; income, nutrition and access data not shown. | Asserted |
| Apartheid probably reduced agricultural employment relative to a more smallholder, labour-intensive path, causing premature deagriculturization. (p. 2) | Cross-country comparison with Argentina, Brazil, Uruguay and Bulgaria and the GDP share decline; theory about small-farm labour intensity. | Illustrative or anecdotal |
| Pervasive regulation (land restrictions, marketing boards, credit, subsidies) created a dualistic agriculture, with inefficiency and above-world prices for basic foods. (p. 2) | Descriptive account of controls; price claim asserted without data; cites Duncan et al. and Thirtle et al. indirectly. | Partial data |
| Limited easing of restrictions has already increased production by Black farmers, and Black part-time farming reflects restricted opportunity, not lack of interest. (p. 3) | Cites Lipton and Lipton 1993 and general international research on rural diversification; no local data presented. | Illustrative or anecdotal |
| Agricultural livelihoods cost less per job than urban jobs and have strong multipliers. (p. 4) | Van Zyl (1991) and 'others' cited, not presented. | Partial data |
| Drought relief of almost R4bn is mostly bailing out heavily indebted White farmers, with little for emerging Black farmers. (p. 5) | Rimmer (1993) mimeo. | Partial data |
| Recent deregulation and reduced tax breaks have lowered capital intensity and raised total factor productivity on White farms. (p. 5) | Thirtle et al. 1993 TFP study of commercial agriculture 1947-91. | Partial data |
The author's caveats¶
The authors note that unreliable agricultural statistics underestimate output from smallholders, especially Black smallholders.
Gaps in the evidence¶
The argument needs systematic data on farm size, labour use and productivity by race and farm type (agricultural censuses, Land Bank and marketing board records, household surveys) to test the smallholder efficiency and employment claims. Figures for rural poverty, unemployment and GDP shares are unsourced; the Agricultural Censuses, population censuses and national accounts existed then and could have been cited. Evidence on Black farm response to liberalization and on land-reform costs would require survey or case data that was thin in 1994 but exists now.
Replicability: Data poorly documented.