Rural and Social Development

The purpose of this article is to investigate the effectiveness of the model used by the South African government to finance emerging black farmers for agricultural development and empowerment. It is widely acknowledged that the South African government spends a vast amount of money attempting to help black community members become commercial farmers. In this article, I argue that those who currently qualify for the funding are mostly farmers with little experience, expertise or interest in agricultural farming. The huge investment spent on such farmers ends up being lost in failed agricultural projects, and the government has not succeeded in finding better alternatives to empower emerging black farmers. Such activities benefit neither the government nor the black farmers intended to be assisted in various areas of the country. The black South African farmers remain agriculturally underdeveloped, while the government on the other hand loses a huge amount of money financing unsuccessful agricultural projects, which potentially threatens future food security. This article is conceptual in nature and uses literature to argue that the financing of emerging black farmers can only succeed if emerging black farmers are financed on basis of experience or ability and interest in farming and that such funding does not exclude potential public and private sector motivated employees who want to access such funding to pursue agricultural farming.

Agriculture is growing in Subsaharan Africa (SSA), but the growth is precarious. In most countries, it has yet to reach the sustained 6% annual rate estimated by NEPAD as necessary to meet the Millennium Development Goal of cutting poverty in half by 2015. Growth needs to be accelerated, secured and used more effectively to promote broadly shared development. This requires two elements. The first is a reversal in the massive underinvestment and significant mis-investment that has taken place in the past in African agriculture, which has led to a huge cost in forgone development for Africans. There is an opportunity now for increased productive investment and improved efficiency of investment in African agriculture, which can significantly increase productivity and output, especially among certain groups of smallholders. The second element is to capture part of this productivity growth to help finance a set of investments, programs and policies that in the short to medium term will secure the assets and access to services of those smallholders facing severe resource and productivity constraints, while over the longer term provide them or their children with a path out of low-productivity farming.

Purchases of agricultural land for diverse reasons, such as recreation or aesthetic appeal (collectively referred to as lifestyle purposes), has implications for agricultural land valuations, commercial agriculture and the acquisition of land for redistribution purposes. This paper reports on the extent of purchases of agricultural land for diverse reasons within an intensive and extensive agricultural farming area in the Western Cape, gathered through a survey of land buyers between January 2005 and October 2007. Descriptive statistics provide demographical information of buyers, their reasons for purchasing farms and the importance of specific characteristics of agricultural properties considered in such purchases. Analyses of variance convey more information regarding the different characteristics of agricultural properties
considered by agricultural and lifestyle buyers. Survey results indicated that farm purchases for alternative purposes were substantial: more than half of all transactions in both the intensive and extensive area were for lifestyle reasons. Lifestyle buyers mostly rely on income from outside the agricultural sector for their livelihoods and financing of purchased properties, therefore they could focus on characteristics of farms unrelated to commercial agricultural production in their decision to buy agricultural properties. Characteristics such as the recreational opportunities provided by the property and its aesthetic beauty, including natural scenery, beautiful viewsand locations within a valley and set against a mountain, appealed to these buyers.

This study assesses public investment required for agricultural growth and poverty reduction in Nigeria. Using time series data for public spending and agricultural total factor productivity (TFP) growth, the econometrically estimated results show that one percent of growth in agricultural spending generates 0.24 percent of growth in agricultural TFP. To support 9.5 percent in agricultural annual growth in 2009-17, a growth rate from the economy-wide analysis on options of growth for poverty reduction (Diao et al. 2009), required agricultural investment would have to grow at 23.8 percent annually in the same period. However, if the spending efficiency were improved based on an estimated elasticity for Sub-Saharan Africa as whole, then required agricultural investment would grow at 13.6 percent per year instead. The study also shows that investment outside agriculture benefits the agricultural sector. By taking into account such indirect effect of public investment, required growth in agricultural spending is much lower.

Malawi has experienced modest economic growth over the last decade and a half. However, agricultural growth has been particularly erratic, and while the incidence of poverty has declined, it still remains high. The Malawian government, within the framework of the Agricultural Development Plan (ADP), is in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP), which provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security. This paper analyzes agricultural growth and investment options that can support the development of a comprehensive agricultural development strategy consistent with the principles and objectives of the CAADP, which include achieving six percent agricultural growth and allocating at least ten percent of budgetary resources to the sector.

Economic modeling results indicate that it is possible for Malawi to reach the CAADP target of six percent agricultural growth. However, achievement of these goals will require additional growth in most crops and agricultural sub-sectors, meaning that Malawi cannot rely solely on growth in maize or tobacco to reach this growth target. Broader-based agricultural growth, including growth in pulses and horticultural crops, will be important if this target is to be achieved. So, too, is meeting the Maputo declaration of spending at least ten percent of the government?s total budget on agriculture. In fact, even under a more optimistic and efficient spending scenario, the Government of Malawi must increase its spending on agriculture in real value terms by about 20 percent per year between 2006 and 2015, and account for at least 24 percent of its total expenditure by 2015 if the CAADP goals are to be met.

Although agriculture has strong linkages to the rest of the economy, with agricultural growth typically resulting in substantial overall growth in the economy and rising incomes in rural and urban areas, simply achieving the CAADP target of six percent will not be sufficient to halve poverty by 2015, i.e. achieving the first Millennium Development Goal (MDG1). To achieve this more ambitious target, agriculture and non-agriculture would need an average annual growth rate above seven percent. This growth requirement is substantial, as is the associated resource requirements, indicating that the MDG target may be beyond reach. However, achieving the CAADP target should remain a priority, as this goal has more reasonable growth and expenditure requirements, and will substantially reduce the number of people living below the poverty line by 2015 and significantly improve the well-being of both rural and urban households.

This Farmers’ Agribusiness training course has been developed to help both farmers and farmer organisations. Its intention is to provide access to additional skills and knowledge that will allow farmers to move from a 'farm' to a 'firm'. The first lesson from Module 3 on entrepreneurship provides information on the role of entrepreneurship in economic development, how to identify sources of ideas for new agricultural ventures and methods for generating new ideas.