Eastern Cape’s farmers have little collateral with which to access finance
Eastern Cape’s farmers have little collateral with which to access finance © Florian Kopp/Shutterstock

Mthatha airport in South Africa’s Eastern Cape might one day be a place from which produce from the fields of one of the country’s poorest yet most agriculturally promising provinces is sent out.

But for now, the recent planting around the airport of about 50 hectares of teff as livestock fodder points to how, even in the most industrialised and well-connected African economy, developing a new farming frontier and connecting it to markets is literally a tough grassroots battle.

The planting was by Sinelizwi Fakade, a local farmer and chair of a new non-profit, Ukhanyo Farmer Development, which is mentoring young people and women, in particular from the black majority. The aim is to help establish them as smallholders and ultimately rise to commercial producers, in an effort to rebalance South Africa’s post-apartheid agricultural economy.

“This is where you are achieving food security,” Mr Fakade says. “You are going to get a lot of game changers in the smallholder categories. Our aim is to contribute to a commercial Eastern Cape.”

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The province is next door to the vineyards and fruit farms of the Western Cape, which has become a hub for agricultural exports to Europe and the US. The Eastern Cape is seen as having great potential for adding to South African grain production in particular because of its climate.

But the Eastern Cape also reflects South Africa’s difficult history as it is a former apartheid “homeland” where white-minority rule forced rural South Africans into reserves and empowered traditional chiefs with control over land.

The legacy is poor infrastructure in the province and a lack of clear title to land ownership that leaves emerging farmers with little collateral to access financing, says Wandile Sihlobo, chief economist at South Africa’s agricultural business chamber. Without roads and silos in which to store grain, “infrastructure then derails access to markets”, he says.

Instead of becoming farmers in their own right, young people in the Eastern Cape often have to emigrate west to work as labourers in the big agribusinesses of the region’s richer neighbour.

Mr Fakade, who himself has achieved commercial farmer status with about 1,200 hectares of grain, wants the next generation to stay. “They are young people who want to make something of their lives,” and Ukhanyo’s mentors are a reflection of this group, he says.

Black farmers are estimated to produce relatively small amounts of the country’s main crop, maize, and its soyabeans and wheat. More livestock is in black hands, at about a third of South Africa’s 9m herd of cattle.

However productivity across the country is often hostage to problems including theft, grazing rights and access to fodder — which prompted Mr Fakade’s planting near the airport.

“A lot of overgrazing has happened” in the province, Mr Fakade says. “Everyone uses the grass as they please.”

Ukhanyo is working to advise farmers on how to use cattle feed more effectively. It is also working pragmatically with traditional leaders who play a critical role in determining rights over land use in the province.

“Our work is in tandem with traditional authority,” Mr Fakade says. The roles of local headmen, chiefs and kings are not going anywhere any time soon, he adds.

This grassroots perspective about the realities of communal land and infrastructure can feel distant from the political discussion on land reform in South Africa.

Political debate has focused on recrimination over the slow pace at which the ruling African National Congress of President Cyril Ramaphosa has put land back in the hands of black South Africans in the 26 years of its rule. Black South Africans and other non-white groups were dispossessed by colonial rule and then apartheid.

A 2017 government audit found that three-quarters of the rural land owned by individuals, including the largest farms, was in white hands.

That year was also when the ANC alarmed investors by adopting a policy allowing the government to seize land, without payment if necessary, to speed up redistribution.

The plan, which would require changes to the constitution, reflects a grinding ideological battle inside the ANC between radicals with ties to Jacob Zuma, the former president, and moderates allied to Mr Ramaphosa, who took over in 2018. It has not been resolved during his presidency. The proposed expropriation amendment has become bogged down in parliament, but remains on the table despite the market fears it unleashed.

In the meantime, Mr Ramaphosa is attempting to reboot land reform on other fronts, even though analysts say that the pandemic is likely to further reduce the financial resources that are available.

“With land ownership still concentrated in the hands of the few, and agriculture primary production and value chains mainly owned by white commercial farmers, the effects of our past remain with us today,” the president said this month, after his government announced a plan to hand 700,000 hectares of unused state land to farmers on 30-year leases.

But there was a catch. “To safeguard the allocated state land for farming purposes, the lease is not transferable,” Mr Ramaphosa added. That could impede farmers from using the land for collateral and limit their horizons in other ways, says the chamber of commerce’s Mr Sihlobo. “If you’re stuck there for 30 years, that is a whole career in farming.”

Mr Fakade echoed frustrations about the ability of black farmers to secure financing from banks when they lack conventional land title but have a viable path to increasing production: “We are still working with systems that are 20 years old.”

“We have to make sure we deliver on the foundation,” Mr Fakade adds. Ukhanyo’s funding requirements to help deliver this with mentoring and support are relatively modest, he says, about 15m rand, or less than $1m a year.

The Eastern Cape’s agricultural potential is there to be tapped, he adds. “The climate is with us, the land is with us, the water is with us,” he says. “The time has come.”

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