Macroeconomic strategies, agriculture and rural poverty in post ...

enefit well situated farmers; most African producers will continue to be relatively
disadvantaged, even after a land reform, by their distance from roads, railways and major
markets.” Tea production in the former Transkei is one industry which will almost certainly
do worse under a freer trading regime (Porter and Phillips-Howard 1996). Before GATT, a
quota system protected producers by from cheaper imports; while contractors sold tea at
between R12 and R14 per kilo, it was possible to import high quality tea for R8 per
kilogramme. Porter and Phillips-Howard (1996) argue that tea production - and livelihoods
and employment - in this region is extremely vulnerable to a more open trading regime. Gear
places a large burden of responsibility in poverty alleviation on small scale farmers; whether
small scale farmers will be able to grow to deliver on these high expectations in a neo-liberal
and open macroeconomy is very much in doubt.
De Janvry et al’s (1995) research on Mexico and the diversification of small scale farmers
into high value foods raises the question of the possibility of emerging farmers in South
Africa participating in the export of fruit, citrus and grape products. Citrus and fruit
production is economically viable on very small tracts of land and the large fruit marketing
organisations - Outspan and Unifruco - are involved in assisting small farmers producing the
high quality fruit that is required for export. In the citrus industry, most of the oranges and
grapefruit produced by black farmers originates from former bantustan development
schemes which have been transformed to allow individual control and cultivation of crops.
Although incomes vary widely, on one scheme in the Northern Province some farmers are
earning upwards of R100,000 per year, an enormous sum compared to average rural incomes
in South Africa. The apparent success of schemes like these must be set against the
enormous costs of establishing small scale fruit farming schemes. Establishing citrus - which
involves preparing the land, purchasing trees and constructing the infrastructure for irrigation
- is over R14,000 per hectare. This figure does not take into consideration the increasingly
high cost of land with access to water (van der Riet and Darroch 1993). Returns on
investment are typically only realised after five years and profits are earned only after 7 to 8
depending on the proportion of the crop exported. The considerable costs of establishing a
fruit farm explains why Outspan is prepared to assist emerging farmers on former bantustan
schemes where the infrastructure for irrigation farming is already in place. The result is that
there are probably less than 100 citrus small scale black citrus farmers in the country. Large
establishment costs also account for the current interest in equity schemes as a way of
empowering rural workers in high value export agriculture. The obstacles to small farmers in
high value food exports is also apparent in other contexts. In Chile, where the
transformation of farming towards exports has been extremely successful, land concentration
has occurred and smallholders have been marginalised from the benefits of the export boom
(Jaffee 1993).
Finally, Gear’s emphasis on small scale farming must be set against its potential for
alleviating and eradicating rural poverty. There are two issues which suggest that emerging
farmers cannot be the only solution to rural poverty. The first was referred to earlier in the
paper: recent poverty studies indicate that rural Africans who are able to earn an income
from agriculture also earn wages in the primary labour market. The poorest rural households,
in contrast, are unable to earn any income whatsoever from agriculture and use what is
produced on the land for personal consumption. A rural land reform programme that is
aimed at increasing the efficiency of ‘emerging farmers’ is unlikely to reach the poorest
households and is much more likely to assist farmers who are already earning part of their
income from farming. In other words, a small scale farming campaign is less likely to assist
the poorest rural households and will probably increase rural differentiation. The second
issue is that even if a small farmer scheme were successful in targeting the rural poor, it is
doubtful that enough farmers could be targeted to have a meaningful impact on rural
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