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Farmer support programmes: lessons from implementation

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Nick Vink; Johan van Rooyen; Mohammad Karaan (2012). Farmer support programmes: lessons from implementation. Paper read at the 'Strategies to overcome poverty and inequality: towards Carnegie III' Conference, University of Cape Town, 4 September.
Type conference paper
Scope Wider apartheid literature
Method synthesis review
Period studied 1913–2011
Regions South Africa, former homelands, KaNgwane, Lebowa, Bophuthatswana
Themes agriculture land, bantustans removals influx, business and state, transition post apartheid, inequality poverty unemployment
Citation key vink2012a

Argument

The authors argue that South Africa's land reform has failed mainly because land transfer was not accompanied by support for beneficiaries. They trace this to apartheid-era spatial distortions (the Land Acts, betterment planning, and the Marketing Act's control boards) and to the post-1980s withdrawal of state support to commercial farming. They review the Development Bank of Southern Africa's Farmer Support Programme (FSP) of the late 1980s and early 1990s as a coherent, comprehensive model that was not carried forward after 1994. They draw eight lessons for designing farmer support today (coherence, participation, flexibility, land access, institutions and tools). The evidence is mostly the authors' own retrospective account and the 1995 DBSA evaluation.

Evidence and method

DBSA's 1995 FSP evaluation (Singini and Van Rooyen), Kirsten et al. (2008) nominal rates of assistance data, government budget figures, policy documents (1984 White Paper, RDP, CASP), earlier academic literature, and the authors' own experience as participants in the DBSA programme.

Place in the debates

Findings

  • The authors identify the lack of post-transfer support as the main cause of land reform's failure. (p. 1)

    policies that have succeeded in transferring land have not been supplemented with support to the beneficiaries to enable them to make productive use of the land.

  • Pan-territorial and pan-seasonal pricing under the Marketing Act spread production into marginal areas and moved processing out of small towns. (p. 3)

    farmers close to the market were cross-subsidising those further away, which allowed a wider spatial dispersion of production.

  • The grain control board schemes were monopolistic, cost-plus and fixed-price. (p. 3)

    The Board was a monopoly buyer and seller of the commodity, had a monopoly over imports and exports, and the price was fixed annually by the Cabinet on a cost-plus basis.

  • State spending on agriculture fell sharply in real terms between 1988 and 1998. (p. 5)

    amounted to R2.8bn in 1998. In real terms, this was 46 per cent of the budget of the Department of Agriculture plus that of the budgets of the former homeland departments in 1988.

  • Support to commercial agriculture peaked in the early 1980s and then declined, so farmers were left to fend for themselves. (p. 5)

    The support reached its peak in the first half of the 1980s and declined after that.

  • DBSA's FSP was designed to give homeland farmers access to the support services farmers elsewhere take for granted. (p. 6)

    the aim of the FSP was to ensure that farmers had access to all these support services.

  • The FSP reached large numbers of smallholders and created jobs over 1987-92. (p. 12)

    Over the 1987-92 period, it was estimated that more than 350 000ha and 25 000 small holders were reached through DBSA supported FSPs. More than 30 000 new jobs were created over this period.

  • FSPs were far cheaper per farmer than large settlement projects. (p. 13)

    around 25 000 smallholders were served by 34 FSPs at an average cost of R5000/farmer (1993 values) and around 30 000 jobs were created; LSPs settled 2 500 farmers at an average cost of R52 000

  • The shift in DBSA's portfolio from large settlement projects to FSPs was marked. (p. 13)

    investment in FSP's amounted to 73% in 1991 and 41% in 1992; in LSP – around 80% in the early eighties, down to 22% in 1991 and only 5% in 1992.

  • Post-1994 the end of coordinated support left a vacuum in the former homelands, and CASP and MAFISA have shown few successes. (p. 13)

    Despite dedicated government funding schemes such as CASP and MAFISA, few successful and progressive interventions can be shown

  • Lack of land ownership and tenure constrains smallholders' access to credit and investment. (p. 16)

    Land purchase is currently still not possible under communal tenure systems and the lack of land ownership constrains the ability of farmers to mobilise loans

Evidence ledger

Sources used

Source Kind Period How used
DBSA evaluation of the Farmer Support Programmes (Singini and Van Rooyen eds, Development Paper No 44, 1995) commission or official report 1987-1993 (evaluation commissioned 1992/3, published 1995) Main source for FSP outcomes: hectares, smallholders reached, jobs created, investment shares, per-farmer costs, and lessons learned.
DBSA FSP investment portfolio statistics (FSP vs LSP shares, costs per farmer, 1987-1992) company records or reports 1980s-1993 Shows the shift of DBSA agricultural investment from large-scale settlement projects to FSPs and the cost per beneficiary.
Kirsten, Edwards and Vink (2008), Distortions to Agricultural Incentives in South Africa, World Bank Working Paper 38 (nominal rate of assistance series) secondary literature compilation 1955-2004 (Figure 1 labelled 1960-2005) Figure 1 shows nominal rate of assistance to agriculture peaking in early 1980s and declining thereafter.
Government budget figures for national and provincial Departments of Agriculture 1998 and homeland agricultural departments 1988 official statistical series 1988, 1998 Establishes that real state spending on farming in 1998 was 46% of the 1988 combined budget.
White Paper on Agricultural Policy (RSA 1984) commission or official report 1984 Source of the three pillars of 'optimum agricultural development' policy characterising state support.
Marketing Act 1937 (consolidated 1968, abolished 1997) and Maize/Winter Grain schemes legislation gazette 1937-1997 Used to explain pan-territorial, pan-seasonal pricing and its spatial consequences for commercial farming.
Land and land-related legislation: 1913 and 1936 Land Acts, Settlement Act 1922, (Native) Administration Act 1927, Proclamations 116 of 1949 and R196 of 1967, soil conservation Acts (1946, 1969, 1983, 1989), Bantu Homelands Constitution Act 1971, Marketing of Agricultural Products Act 47 of 1996 legislation gazette 1913-1996 Documents the legal framework producing spatial distortions, betterment planning and differential state support.
Kassier Report (1992), Report of the Committee of Inquiry into the Marketing Act commission or official report 1992 Listed in references as background on marketing regulation; not cited in the body text.
Minister of Agriculture and Land Affairs (2004), Presentation on CASP to the Portfolio Committee parliamentary debates 2004 Quoted for the stated purpose of the Comprehensive Agricultural Support Programme (CASP).
Oettle et al. (1998), Encouraging sustainable smallholder agriculture in South Africa commission or official report 1998 Source of the assessment of BATAT's aims and why it failed.
FSP Evaluation Workshop 1993 and DBSA interim evaluation surveys/focus groups (1989) interviews oral history 1989-1993 Quotes from an implementation practitioner and farmer views used to illustrate FSP's non-material achievements.
Van Niekerk et al. (2011), views of Eastern Cape smallholder farmers on extension author survey or fieldwork 2011 Evidence of present-day smallholder views and the breakdown of extension and support services in former homelands.
Van Rooyen, Hobson and Kirsten (2010) report to the Agricultural Business Chamber; Mabaya et al. (2011) case studies of emerging farmers and agribusiness company records or reports 2010-2011 Case evidence that agribusiness-linked models succeed where support elements are provided; Sheila-Mooifontein FSP example.
Vink (2001), Small farmer research in South Africa: a survey (summary of DBSA FSP philosophy) secondary literature compilation 2001 Quoted as the summary of the DBSA debate and philosophy behind the FSP.
Lipton (1977), 'South Africa: two agricultures?' secondary literature compilation 1977 Source of the argument that dualism is a policy construct and basis of DBSA thinking; compares outputs and inputs.

Inference

Quantification: Illustrative figures.

Retrospective, largely narrative policy analysis and insider case study of the DBSA FSP, drawing on a prior DBSA evaluation, one secondary series on rates of assistance and a few headline statistics; lessons are derived by historical comparison of FSP with later BATAT/CASP programmes, without systematic testing.

Key claims

Claim Basis Strength
State support to commercial agriculture peaked in the early 1980s and was largely dismantled by the late 1990s, and the commercial farming space is geared to large-scale farmers. (p. 5) Kirsten et al. (2008) nominal rate of assistance series (Figure 1) and budget comparison 1988-1998, supported by narrative on the Marketing Act. Partial data
Marketing Act control schemes with pan-territorial and pan-seasonal pricing distorted agricultural space, producing dispersion of production, urban milling, and disinvestment in rural towns. (p. 3) Description of the Act and scheme design; causal consequences are reasoned, with no data cited. Asserted
DBSA FSPs reached large numbers of smallholders, brought land into production and created jobs at far lower cost per farmer than large-scale settlement projects. (p. 13) Singini and Van Rooyen (1995) DBSA evaluation figures on hectares, smallholders, jobs and costs. Partial data
DBSA shifted its agricultural investment from large-scale projects to FSPs between the early 1980s and 1992. (p. 13) DBSA portfolio shares cited from Singini and Van Rooyen 1995. Partial data
Land reform failed mainly because land transfer was not accompanied by support to beneficiaries, and the later BATAT/CASP did not learn from FSP experience. (p. 1) Asserted from policy documents and Oettle et al. 1998; no outcome data on land reform presented. Asserted
Smallholders in the former homelands remain neglected, with extension, funding and infrastructure having broken down, and CASP/MAFISA have few successes. (p. 13) Van Niekerk et al. (2011) Eastern Cape smallholder views and general assertion. Illustrative or anecdotal
Key lessons from FSP: comprehensive, coordinated and sequenced support; coherent policy and funding; participatory design and evaluation; flexible funding; secure production rights. (p. 12) Authors' synthesis of the 1995 DBSA evaluation and their own involvement in DBSA. Illustrative or anecdotal

The author's caveats

The authors note that participating farmers and beneficiary groups were absent from the formal 1992/3 evaluation, although their views were captured in interim surveys and focus groups. They also note that the 'DBSA success story' framing rests on an in-house evaluation.

Gaps in the evidence

The argument relies on DBSA-commissioned evaluation figures reported secondhand, without independent verification of production, income, jobs or sustainability after subsidies ended. It would need project-level data (yields, incomes, loan repayment, post-1994 survival of FSP schemes) and comparable data on CASP/land reform outcomes; some of this exists in DBSA archives and in the cited evaluation report. The claims on Marketing Act spatial effects would be better tested with regional price, production and processing-location data from the Control Boards and agricultural censuses.

Replicability: Data poorly documented.