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Small-scale farmers need much more than a bailout

The financial stimulus package for businesses in distress due to the COVID-19 pandemic is the South African Government’s strategy to begin the process of economic recovery. Small-scale farmers received only a meagre percentage of these funds. Stan Muyebe, from the Justice and Peace Commission, under the auspices of the Southern African Bishops’ Conference (SACBC), calls for the transformation of the food supply chain to stimulate rural development and provide greater access for small-scale agricultural producers.

Over the past few weeks, there has been a lot of talk about sustainable and inclusive economic recovery. President Cyril Ramaphosa has frequently spoken about using the COVID-19 pandemic as an opportunity to create a “new economy” that is more sustainable and inclusive. The focus, however, has largely been on providing bailouts to big business, using the argument that they employ the most people, people who would otherwise increase the ranks of the unemployed.

This argument forgets that small-scale farmers, an often-forgotten economic sector comprising some 2.5 million people, form the backbone of rural development and food security at community level. The government’s economic recovery plan should also prioritise the ongoing sustainability of this sector.

Small-scale farmers were among the beneficiaries of the government’s R500 billion stimulus package to provide economic relief to those who were the worst affected by the COVID-19 pandemic. In May, Agriculture, Land Reform and Rural Development Minister Thoko Didiza announced that small-holder agriculturalists would get R1.2 billion in relief, representing only 0.24% of the total stimulus package. Of that amount, the government has already allocated R500 million to approximately 15,000 applicants, just under a third of the 55,000 who applied for assistance. The Minister explained the value of the once-off grant will vary from operation to operation, but will not exceed R50,000.

Systemic exclusion

This measure may be well-intended, but the aid did not do much to help small-scale farmers deal sustainably and comprehensively with the impact of COVID-19 and its aftermath. Nor did it address the far bigger systemic problem that small-scale farmers have endured for years – exclusion from commercial produce supply chains, poor access to financial services, infrastructure constraints, and the struggle to access quality agricultural products and equipment. The pandemic has simply amplified the myriad of challenges they face daily.

The SACBC Justice and Peace Commission has been working with several associations for small-scale producers in policy research and advocacy around effective land reform and rural development interventions. Without access to formal supermarket supply chains, the market opportunities for small-scale producers are limited to fresh produce markets and street vendors, both of which suffered massive collapse during the lockdown and have been susceptible to other economic shocks. 

Without access to formal supermarket supply chains, the market opportunities for small-scale producers are limited to fresh produce markets and street vendors.

Throughout the pandemic, the government ensured that formal food networks, local supply chain values and food trade were not severely disrupted. However, these measures clearly benefited commercial agriculturalists far more than small-scale producers. This has been the case for decades. Government continues to ignore agricultural investments in small-scale production and policy support for inclusive markets, measures that have reaped immense benefits in many developing countries.

‘New economy’ for small-scale farmers

If the government is taking the plight of small-scale farmers as seriously as they say they are, writing out one-off COVID-19 relief cheques should be the very first step in a multi-stakeholder strategy to help small-scale producers to build and strengthen their businesses, farm more food, improve market access, and feed more people.

Efforts should also be made to ensure that competition policies create fairer market conditions for small-scale producers.  Equally important, is the need to fast-track land redistribution to uplift women who engage in small-scale farming. These women are the main breadwinners in rural households, but they are often overlooked when interventions for equitable access to land, training, agricultural inputs, and other benefits are available.

Equally important, is the need to fast-track land redistribution to uplift women who engage in small-scale farming.

Financial investment and sound policies for small-scale producers are critical components in strengthening the national food system but these measures will also create more jobs where they are needed the most, namely in rural areas where unemployment is rampant.

Developing rural economies will reduce people’s reliance on social grants. Investing sustainably and meaningfully in small-holder farmers will, in the long-term, save the government billions of rand each year, which can in turn be used to solve other pressing social problems.  

* The opinions expressed here by Spotlight.Africa contributors and editors are their own and not official statements of the Society of Jesus in South Africa or of the Catholic Church unless explicitly stated.