Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater

SCHOOLof Sekhukhune District: GOVERNMENT Perspectives from Hereford UNIVERSITY OF THE WESTERN CAPE

Barbara Research Nompumelelo report Tapela no. 21 Research report no. 21

Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District: Perspectives from Hereford

Barbara Nompumelelo Tapela

Programme for Land and Agrarian Studies September 2005

i Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District: Perspectives from Hereford Barbara Nompumelelo Tapela

Published by the Programme for Land and Agrarian Studies, School of Government, University of the Western Cape, Private Bag X17, Bellville 7535, Cape Town, South Africa. Tel: +27 21 959 3733. Fax: +27 21 959 3732. [email protected]. www.uwc.ac.za/plaas

Programme for Land and Agrarian Studies Research report no. 21

ISBN 1-86808-617-8

September 2005

All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without prior permission from the publisher or author.

Copy editor: Josie Stadler Cover photograph: Barbara Tapela Layout: Designs for Development Map: John Hall (Figure 1) Photographs: Barbara Tapela (Figures 3 & 4) Printing: Digital Bureau.com

ii Contents

Figures, tables and boxes ii Acronyms and abbreviations iii Acknowledgements iv Foreword v Chapter 1: Introduction 1 Defining sustainable rural livelihood 1 Research methodology 5 The study area 7 The ISRDP 10 Chapter 2: Emerging small-scale irrigation in Greater Sekhukhune 16 Characteristics 16 Challenges 17 Joint ventures 18 Chapter 3: Hereford Irrigation Scheme 19 History prior to land ‘reclamation’ 19 Non-violent occupation 21 Land allocation 23 Socio-economic profile 25 Vulnerability 32 Shortage of irrigation water 33 Farmer organisation 34 Rehabilitation and ‘revitalisation’ of the Hereford Irrigation Scheme 35 Summary 37 Chapter 4: Hereford Tobacco Project - A joint venture in crisis 39 A joint venture in crisis 40 Voices from below: Oral testimonies of the emerging farmers 41 Other local voices 45 Key emerging issues 48 Conclusion 52 Chapter 5: Vegetable joint venture or ‘the “return” of the fugitive pack house’ 54 Vegetable pack house: Birth of an idea 55 Shift of the pack house 56 Return of the Hereford pack house: A new lease on life 58 Conclusion 58 Chapter 6: Lessons from the Hereford case 60 Joint venture risks in the context of rural poverty and inequality 60 Costs, benefits and power issues in joint ventures 61 Gender issues 62 Institutional co-ordination and monitoring 62 Conclusion 64 References 65

i Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District Figures, tables and boxes

Figure 1: Map of the study area 7 Figure 2: Amalgamated expenditure envelope for funding the ISRDP 12 Figure 3: Panoramic view of the scheme 20 Figure 4: Close-up of a tobacco curing barn, cottage, chicken coop and garden 20 Figure 5: Percentage frequency of distribution of smallholdings by age and gender, 2004 25 Figure 6: Crop production, 2004 28 Figure 7: Percentage frequency of adult members of households by status of employment, 2004 28 Figure 8: Material asset ownership by households, 2004 31 Figure 9: Frequency of disclosed illness in Hereford Irrigation Scheme households 32 Figure 10: Hereford Irrigation Scheme networks 37

Table 1: Greater Sekhukhune: Summary of selected living conditions, 2002 10 Table 2: Allocation of smallholdings in the Hereford Irrigation Scheme, 2004 24 Table 3: Distribution of smallholdings by gender and age, 2004 24 Table 4: Employment status of resident household members aged 18 years and above, 2004 28 Table 5: Key funding towards rehabilitating the scheme 36 Table 6: Farmer accounts for 2003–04 production 42 Table 7: Farmer accounts for the 1999 tobacco growing partnership with local commercial farmer Joppie Graham 46

Box 1: Some key outputs of the ISRDP 13 Box 2: On ‘straddling’ by irrigation farmers’ households… 27 Box 3: On employment in the nearby town of Groblersdal… 29 Box 4: Example of livestock contributions to household income… 30

ii Acronyms and abbreviations

Agri BEE Broad Based Black Economic Empowerment Framework for Agriculture ANC African National Congress ARC Agricultural Research Council BAT British American Tobacco BEE black economic empowerment CBOs community-based organisations CCAW Co-ordination Committee(s) for Agricultural Water DALA Department of Agriculture and Land Administration (Provincial) DBSA Development Bank of Southern Africa DLA Department of Land Affairs DPLG Department of Provincial and Local Government DWAF Department of Water Affairs and Forestry Eskom Electricity Supply Commission Gear Growth, Employment and Redistribution macroeconomic strategy HDI Human Development Index HVGA Hereford Vegetable Growers’ Association IDP integrated development plan IDT Independent Development Trust ISRDP Integrated Sustainable Rural Development Programme ISRDS Integrated Sustainable Rural Development Strategy LED local economic development LDCs Less Developed Countries LRAD Land Redistribution for Agricultural Development MKTV Magaliesberg Koöperatiewe Tabak Vereniging NAFU National African Farmers’ Union NDA National Department of Agriculture NDPW National Department of Public Works NGO non-governmental organisation RDP Reconstruction and Development Programme REAP Rural Enterprise and Agribusiness Programme RESIS Revitalisation of Smallholder Irrigation Schemes SAGL South Africa Gold Leaf SFDT Sekhukhune Farmers’ Development Trust Stats SA Statistics South Africa Systems Act Local Government: Municipal Systems Act 32 of 2000 TFA Tafelkop Farmers’ Association TISA Tobacco Institute of South Africa UNDP United Nations Development Programme WSDP Water Services Development Plan WUAs water user associations

iii Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District Acknowledgements

he research towards this report was Department of Local Government and made possible through funding from a Housing, the Independent Development Trust Tcollaborative partnership between the (IDT), Africare, the Sekhukhune Farmers’ Programme for Land and Agrarian Studies Development Trust (SFDT), the Hereford (PLAAS) and the Centre for International Farmers’ Association, the Hereford Irrigation Environmental and Development Studies Board, the Upper Arabie Irrigation Scheme, (Noragric) at the Norwegian University of Ndzalo Consulting, Tobacco Institute of Life Sciences. South Africa (TISA), Tobacco RSA and Various other institutions and persons Limpopo Tobacco Processors (ex-MKTV). gave generous assistance during the research. Special thanks go to Mrs Pearl Moruasui These include persons affiliated to the (formerly) of Africare, Dr Barbara van International Water Management Institute Koppen of IWMI and Mr Jan Venter of (IWMI), the Water Research Commission DALA. I am also grateful to Elma Molobela, (WRC), the Greater Sekhukhune District Michael Marotla, Emmanuel Masemola and Council, the Greater Marble Hall and Metla Mabye for their assistance with the Greater Groblersdal Local Municipalities, fieldwork. the Limpopo Provincial Department of I am particularly indebted to Professor Agriculture, the Mpumalanga Provincial Ben Cousins for his guidance throughout the Department of Agriculture and Land research. I also thank my PLAAS colleagues Administration (DALA), the Department for their generous support. of Water Affairs and Forestry (DWAF), Last but not least, my gratitude goes to the Department of Land Affairs (DLA) Nigel and Mbongeni Tapela, who have been a office in Witbank, the Limpopo Provincial great support team on the home front.

iv Foreword

mall-scale irrigation farming is Municipality, which straddles the boundaries envisaged as playing a progressively of the Mpumalanga and Limpopo provinces. Slarger role in rural development This research took place in two case-study and in reducing some of the inequalities sites, namely the Hereford and the Phetwane inherent in South Africa’s space economy. Irrigation Schemes. However, this report The promotion of entry by black farmers focuses on findings from Hereford only. into commercialised small-scale irrigation The research was primarily concerned with farming appears to have been bolstered by the impact of BEE, articulated through joint the late 1990s convergence of agricultural, ventures, on the ‘livelihoods’ of people living water, land, local government and other in emerging small-scale irrigation schemes in sector reforms. Concomitant to these reforms, some of the least affluent rural areas within the government’s macro-policy shifts seem the municipality. to favour the creation of a black farming The report examines joint ventures in elite, and an important question centres on the context of the Integrated Sustainable the possible negative impacts of neo-liberal Rural Development Programme (ISRDP) policies on the livelihoods of the poorest and the Land Redistribution for Agricultural and most vulnerable people within small- Development (LRAD) programme. The focus scale irrigation farming communities. It is is on the sustainability of rural livelihoods, also debatable whether a new class of petty while attention is given to the stakeholder commodity producers can establish a viable power dynamics at the local level. niche within global commodity chains, Although the inception of joint ventures given the significant constraints to effective has been greeted with optimism and renewed participation in a highly competitive and hope in certain circles within government, globalised commodity production sector. non-governmental organisations (NGOs), Furthermore, there are questions over the the private sector and small-scale irrigation impacts of recent attempts to facilitate entry schemes, so far the performance of joint by small-scale farmers into commercial ventures in Greater Sekhukhune has fallen production through joint ventures or ‘black short of expectations. The promise of higher economic empowerment’ (BEE) partnerships incomes and improved livelihoods has involving small-scale farmers, private remained elusive, and instead debts and investors and government. There is a need potential losses of often meagre household to examine the power dynamics within such assets have loomed large, threatening to joint venture schemes. The historical context erode existing livelihoods and undermine of gender inequalities in access to and control government interventions. over productive resources in communal Our research findings suggest that the settings and the observations that women’s challenge of reducing rural poverty and roles and interests in land are increasingly inequality might not be resolved through politicised and contested indicate a need for existing approaches to joint ventures. While a gender-sensitive examination of the impacts these facilitate the integration of resource- of commercialisation on the livelihoods poor irrigation farmers into the globalised of women and men living in emerging mainstream commercial production sector, small-scale irrigation schemes. Such an this might reinforce socio-economic examination is required not only within disparities and undermine the livelihoods of communal area settings, but also in the newly the poorest and most vulnerable members of redistributed commercial farming areas. the irrigation schemes. This report is based on research carried This report proposes a re-examination of out between June 2003 and April 2005 in the the current conceptualisation, implementation Greater Sekhukhune Cross-Border District and monitoring of joint ventures. New

v Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District approaches are needed to avert possible yet to realise their capacity to hold local losses of livelihood and assets by resource- political representatives accountable, it is up poor irrigation farmers. It is particularly to municipalities to be more proactive and to important to improve the administration of actively ensure that local people’s interests joint venture contracts. Although, generally are not subsumed by the interests of private rural people in Greater Sekhukhune have capital.

vi Chapter 1: Introduction

Chapter 1: Introduction

This chapter introduces the key terms of reference of the research report, and offers a definition of the term ‘sustainable rural livelihoods’ in the context of joint ventures in the Hereford emerging small-scale irrigation scheme in Greater Sekhukhune District. A key contention of this introductory chapter is that the livelihoods of resource-poor and vulnerable rural people might be compromised by neo-liberal elements of the prevailing development approach.

Defining sustainable rural irrigation schemes is premised on the fact that such schemes are envisaged as playing livelihood a progressively larger role in reducing the ivelihoods have been defined in terms poverty and inequality inherent in South of the capabilities, assets and activities Africa’s rural space economy (Ministry for Lrequired for living (Chambers Agriculture and Land Affairs 1998b). This is & Conway 1992:7). The UNDP (1999:3) demonstrated by the targeting of agricultural defines a livelihood system as a dynamic investment in rural development nodes to realm that integrates both the opportunities provide livelihoods, infrastructure, irrigation, and assets available to a group of people for services and skills development (NDA achieving their goals and aspirations as well 2001). Emerging commercialised small-scale as interactions with and exposure to a large irrigation schemes are among the ‘anchor range of beneficial or harmful ecological, projects’ within Integrated Sustainable Rural social, economic and political influences that Development Programme (ISRDP) nodes, may help or hinder the group’s capacity to such as Greater Sekhukhune District. make a living. The ISRDP is an institutional Definitions of the term ‘sustainable rationalisation strategy for aligning the livelihoods’ relate to a wide set of issues activities of the three spheres of government which encompass much of the broader debate with the local development priorities of about the relationships between poverty and selected poverty nodes (IDT 2000). An environment, but offer no clarity about how important feature of the ISRDP is that contradictions are addressed and trade-offs the programme is a hybrid of various assessed (Scoones 1998). This study adopts development approaches, blending neo- the definition developed through the works of liberal and social welfare approaches within various scholars, including those of Hussein a somewhat vaguely articulated ‘sustainable & Nelson (1998), Carswell (1997) and development’ framework. The principal Chambers & Conway (1992), that sustainable instrument for the ISRDP is the integrated livelihoods are those that can cope with, development plan (IDP) which, in terms of recover from and adapt to stresses and the Local Government Municipal Systems shocks, maintain or enhance their capabilities Act 32 of 2000 (‘Systems Act’), must be and assets and provide net benefits to other developed by all municipalities in South livelihoods locally and more widely, both Africa, whether they are poverty nodes or now and in the future, without undermining not. the natural resource base. In this report, the IDP provides a useful The focus on livelihood sustainability framework for examining how relevant local in emerging commercialised small-scale governance structures have promoted or

1 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District failed to promote the sustainability of rural 2000; May et al. 1998). The range of sector livelihoods in the context of joint ventures reforms, development interventions and in emerging small-scale irrigation schemes poverty reduction strategies that have been within the Greater Sekhukhune ISRDP nodal implemented have not made significant district. impacts on rural poverty and inequality Although rural development plans, such as (DBSA 1999 cited in Everatt 2004:9; IDPs in districts such as Greater Sekhukhune, Goldman et al. 2002; Cousins 2003; IDT have emphasised the importance of small- 2000). The increasing convergence, since scale irrigation schemes, viewed at a national the late 1990s, of reforms in rural production scale the contribution of various schemes to sectors indicates government’s recognition agriculture and livelihoods seems modest. of the need to put in place a co-ordinated and Some studies suggest that the majority of effective institutional framework to eradicate black farmers practise rain-fed cropping poverty and to redistribute productive assets. rather than irrigation. The majority of black This convergence is evident in the arable farmers also practise subsistence rather various policies, laws and strategies that than commercial farming (Perret 2001). The have emerged to address redistribution. This vision of a significant role for commercialised is captured in Section 25:8 of the National small-scale irrigation farming appears rather Constitution’s Bill of Rights which expresses ambitious, given the constraints facing the state’s commitment to take legislative small-scale farmers. Nonetheless, emerging and other measures to achieve land, water commercialised small-scale irrigation and related reforms in order to ‘redress the schemes provide a useful case study of how, results of past racial discrimination’. Such within a predominantly neo-liberal economics measures include the LRAD programme policy context, the interplay between land (DLA 2001), the Broad-based Black and water policy, joint ventures and local Economic Empowerment Framework for governance might impact on resource-poor Agriculture (Agri BEE) (NDA 2004) and and vulnerable local people and, more policies on Financial Assistance to Resource broadly, provide lessons for how to address the challenge of rural poverty and inequality. Poor Irrigation Farmers (DWAF 2004) and The issue of livelihood sustainability Water Allocation Reform (DWAF 2005), in rural South Africa warrants particular which derive from Sections 61 and 62 of the attention for two reasons. First, the historical National Water Act 36 of 1998. background of losses of livelihoods due to As well as developing frameworks forced removals and the dispossession of land for redistribution, there have been moves and other resources, described by Platzky & towards institutional integration and co- Walker (1985), places an ethical imperative ordination in the water, land, agriculture, on research to identify the livelihood impacts local government and related sectors. The of on-going agrarian reforms and rural view that the ‘silo’ approach to development development interventions, and to suggest has been a contributing factor to the failure ways to ensure livelihood security. Second, of development interventions appears to the need to give attention to rural livelihood have informed these moves. Frameworks sustainability arises from observations that and structures that give expression to the spectre of uncertainty – due to livelihood institutional integration and co-ordination insecurity and vulnerability – prevails in include the National Guidelines for Integrated contemporary South African rural settings Management of Agricultural Water Use (SLSA Team 2003:7). (NDA 2000), Provincial Co-ordinating As I write this report, a decade has Committees for Agricultural Water passed since the advent of majority rule yet (CCAWs), catchment management agencies, South Africa retains the historical legacy water user associations (WUAs), municipal of a highly polarised space economy. IDPs and local economic development (LED) Poverty and inequality persist in many committees for agriculture. rural areas, particularly in the former Government’s attempts to co-ordinate ‘homelands’ (Van Rooyen et al. 2001; May institutional frameworks and structures and

2 Chapter 1: Introduction

ensure the redistribution of productive assets the government’s interest in ‘playing are, indeed, laudable. The convergence of a significant role in the economy while land, water, agriculture, local government and fighting poverty’ in the Finance Minister’s other sector reforms seems to have provided 2005 budget speech, in which expenditure on a semblance of the required policy, statutory an expanding social security programme to and governance framework within which the cater for the poorest 40% of the population challenges of poverty and inequality can be has been increased by 25% over the next five resolved, rural development achieved and years (Friedman 2005). Notwithstanding the livelihoods secured. However, there is some government’s efforts to balance conditions concern that the various sector reforms have for economic growth with social security been concomitant with the government’s concerns, in many rural contexts structural policy shifts away from the focused anti- conditions seem to favour the creation of a poverty strategies of the Reconstruction and black farming elite. Development Programme (RDP) towards Various scholars (Wilson et al. 2001: the national economic goals espoused by 4; Tarrow 1996:396 cited in Harris 2001: the Growth Employment and Redistribution 1; Cousins 2003; Drummond & Maarsden (Gear) macro-economic strategy. 1999) have argued that the persistence of A number of scholars (Cousins 2003; poverty in developing countries, irrespective Borras 2003; Levin 2002; May 2000:7; of more recent formulations for development, Levin & Weiner 1996), drawing largely for example the ‘sustainable development from radical political economy perspectives, approach’, has largely been a direct result have challenged neo-liberal approaches to of the broader structural factors inherent in development on the basis that these are often a capitalist global political economy. The the cause of rural poverty and are therefore structural factors reinforce the divergence incapable of eradicating it. Cousins (2003) between core and the periphery, such that argues that contrary to conventional notions deliberate interventions have to be put in of poverty as ‘residual’ in character, the vast place to ensure that some development majority of rural dwellers are not so much ‘trickles down’to the periphery. Without excluded as included on highly adverse a radical transformation of the structural terms. His argument centres on the ‘agrarian factors, development interventions will question of the dispossessed’ (Cousins 2003: remain ineffective. From this perspective, 41), which essentially revolves around the promoting an elite group of emergent black constituting of a new class of emergent farmers through mechanisms such as the Agri petty commodity producers from the ranks BEE programme is not a sufficient means of the desperately poor, a class which ‘must of resolving the rural poverty and inequality insert itself aggressively into the mainstream problem. capitalist economy’. Without wide-ranging Indications are that the livelihoods of agrarian reform, the prospects of achieving resource-poor and vulnerable rural people this objective are debatable (Cousins 2003). might indeed be compromised by neo-liberal Amid the policy shifts, however, the elements of the prevailing development government has retained a commitment approach. An important question centres on to both economic growth and social the possible negative impacts of hybrid neo- development. The ISRDP, implemented liberal economics and the social development initially in designated nodal districts approach on the livelihoods of the poorest such as Greater Sekhukhune, and due and most vulnerable people within farming to be implemented nationwide by 2010, communities. It is also debatable whether or demonstrates the hybrid nature of the not a new class of petty commodity producers government’s macro-economic policy. can establish a viable niche within global The programme draws from a diversity commodity chains, in a context where the of development approaches and its vision radical redistribution of land and water blends economic growth and social security is constrained, and where the majority of concerns. There is further evidence of black small-scale farmers face significant

3 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District constraints to effective participation in the to agrarian reform is required. Jacobs, highly competitive and globalised commodity Lahiff & Hall (2003:27) suggest that there is production sector. Of particular concern is the a need for large-scale transfers of land and, view within certain government, civil society where necessary, for government to adopt and private circles that joint ventures provide expropriation – with compensation – as a key an effective means for small-scale farmers to tool for redistribution. The same might be enter the commodity production sector. said for the redistribution of water. Such Joint ventures involving private investors radical measures call for substantial inputs of and producers, and supported by government financial resources and political will within agencies, are seen as providing the financial, government to adopt more effective measures technical, managerial and marketing to address rural poverty and inequality resources required by black farmers. and to promote a viable – not necessarily However, critics have argued that joint commercial – farming sector within the black ventures are a new form of exploitation and a peasantry. mechanism through which white commercial The recent adoption of the Policy on farmers spread the risk of engaging in an Financial Assistance to Resource Poor increasingly complex and capital-intensive Irrigation Farmers (DWAF 2004) indicates sector, while gaining market and political a positive shift in political will and financial credibility in the process (Mayson 2003). We commitment towards promoting access can learn from the experiences of other less to water by small-scale farmers. Yet developed countries (LDCs) elsewhere with the question still remains whether such joint ventures; these suggest that producers’ a move has been echoed in the adoption control of the production process is reduced, of appropriate approaches to land and and cash crops are produced at the expense agricultural reform in the context of small- of local food production and food security scale irrigation schemes. (Jacobs 2001:28). In the case of ‘water-stressed’ catchments Furthermore, trade liberalisation policies, such as the Olifants, within which the Phetwane and Hereford irrigation schemes such as the World Trade Organisation’s are located, white commercial farmers Agreement on Agriculture, coerce LDCs to continue to command a larger share of phase out subsidies, exchange controls and irrigation water and infrastructure (Tren trade barriers without imposing the same & Schur 2000; Piontek 2000; Ligthelm conditions in the north (Jacobs 2001:28). 2001). The National Water Act of 1998 has Sanitary and phytosanitary measures, as abolished ‘riparian rights’, thereby breaking well as Provisions of the European Union’s the legal coupling of land and water rights Common Agricultural Policy, are used as and paving the way for the redistribution of non-trade barriers to protect producers in the water resources. The new policy on subsidies north and to make it difficult for producers for resource-poor irrigation farmers also in LDCs to compete (Madonsela 2001:1, provides support for black farmers to gain cited in Jacobs 2001:29), which could result access to water resources for productive in resource-poor farmers being pushed out purposes. However, the unfolding water of the production game. Although the South reallocation process does not seem to offer African government has adopted a policy to many options for a radical and sustainable subsidise resource-poor irrigation farmers, redistribution of water. the proliferation of joint ventures in small- The articulation of water reforms has been scale irrigation schemes raises questions characterised by inadequate communication over the extent to which government policy of the legal requirement for designated interventions can enhance the interests users to register their water use, with the of black farmers in settings such as those result that many black farmers have not prevailing in designated poverty nodes. been informed of this. Consequently, the On the issue of overcoming dualism in registration of lawful use by established South Africa’s rural space economy, Cousins white commercial farming sectors has been (2003) asserts that a more radical approach relatively higher than that by black farmers.

4 Chapter 1: Introduction

Similarly, there has been greater participation consumption, ‘hardly features in official in the predominantly white Irrigation Boards’ redistribution thinking’, and state agricultural processes to establish local level WUAs than support services are unavailable in many of black farmers. While government officials parts of the country (Jacobs et al. 2003). In cite the lack of institutional capacity to light of these factors, Jacobs et al. (2003:25) drive a broad and effective public awareness conclude that the prospects of the very poor initiative as a major constraint, the top-down accessing LRAD funding are increasingly and centre-driven approach to the formation in doubt. Thus it is difficult to see how a of new water management structures also commercialised approach to the allocation of appears to have contributed to this problem. land and water resources and to agricultural Given the provision that a review and production can contribute to sustainable possible reallocation of registered water livelihoods in contexts where poverty is use should take place after a period of five rampant, such as in the small-scale irrigation years, and that reallocations detracting from schemes in Greater Sekhukhune. existing lawful use have to be justified, the Cousins (2003:43, 45) proposes that process of redistributing water is likely to a sustainable livelihoods approach that be ‘technically demanding and contentious’ builds on the land-based livelihoods which (DWAF 2005). rural people currently practise and which The emphasis on ‘efficiency’ in water enhances their economic value might be more use, the ‘user-pays’ principle and the appropriate than attempting to replace these payment of water charges at the ‘economic value’ of water further narrow the prospects livelihoods with fully market-orientated or for resource-poor emerging black farmers commercialised approaches. At the same securing equitable access to water. An time, he recognises that it is clear that the illustration of the small-scale farmers’ deep poverty in rural areas requires radical dilemma relates to inter-sectoral competition measures, not least a redistribution of for water between the mining sector and the resources including land. Friedman’s (2005) emerging small-scale farmers in the Olifants observation that attempts to deal with poverty Basin (Farolfi & Perret 2002). This seems are ineffective because they do not reflect to compel small-scale farmers, whose profit what the poor want, suggests the need for the margins are relatively low (Tren & Schur poor to participate more actively in shaping 2000), towards trading away a greater share the development agenda. Lessons might be of their water allocation to the mines who derived from LDCs elsewhere. can afford to offset the water prices. The commoditisation of water resources poses Research methodology a threat to the sustainability of gains made Both primary and secondary data sources by black farmers in terms of the new Policy were used during the research process. on Financial Assistance to Resource Poor Primary data sources included direct Irrigation Farmers (DWAF 2004). observation, informal conversations and The possible negative effects of discussions, semi-structured formal and commoditisation of water resonate with the informal in-depth interviews, questionnaires, effects of market-based land reform. Recent focus group discussions, networking with studies (Jacobs et al. 2003:25) suggest that reliance on the market to acquire land has relevant researchers, and workshops with resulted in a strong and increasing emphasis various stakeholders. Secondary data on commercial agriculture. Applications for sources included documents pertaining to land reform grants are required to adhere relevant policy, legislation, plans, strategies, to stringent commercial criteria to qualify programmes and projects, community for land purchase grants and loans, and records, electronic databases, statistical applicants are required to procure support survey reports, published and unpublished services, such as business planning, extension literature and other document sources and finance, from the private sector. Small- compiled by government, civil society and scale production, particularly for household the private sector.

5 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

The research framework for the study with data in relevant externally-based revolved around livelihoods, institutions institutions. and land and water resources. The analytical Land and water resources are considered framework for the study was adapted from critical to the generation of both farm and the Sustainable Rural Livelihoods framework non-farm based livelihoods in the selected developed by Scoones (1998). sites. These resources are a key component For each of the selected study sites, the of the basket of household and community following baseline data was collected and livelihood assets. It was thus necessary to analysed: collect data on land and water allocation, • livelihood profiles of the irrigation tenure, land use and land development and farmers’ households management. • land and water allocations, uses, Institutions involved in the development, safeguarding, control and commercialisation processes influence the contestation dynamics surrounding livelihood generation • institutional structures, processes, roles, strategies and entitlements to land and resources and relationships. water in the selected irrigation schemes. Livelihood profiling offered a means to Data generation and analysis of institutional establishing a base line for normative process, resilience and outcome variables descriptions and analyses of characteristics of focused at two levels of analysis, namely the the population in the selected site. Livelihood joint ventures and the small-scale irrigation profiles also provided a useful background farmers’ group level. Process variables to the power and gender dynamics emerging included representation, responsiveness from or concomitant with commercialisation. to participation, accountability and Empirical research on livelihood profiles took transparency, relationships with small-scale place in two stages. farmers, local communities, traditional The initial stage involved determining authorities and elected councillors (or local the profile of the study site; this was done by authorities), relationships among stakeholder means of questionnaire surveys. Particular institutions, co-ordination, communications attention was paid to the gender dimensions and performance and impact monitoring. of poverty and inequality at the household Resilience variables included legitimacy, level. The target sample size for the first robustness and compliance. Outcome stage was 100% in the selected site. At variables pertaining to small-scale irrigators’ such a scale, the profile could only offer groups and to the rural people residing in a generalised overview of the population the irrigation scheme areas included equity, composition, in terms of variables such as efficiency and sustainability. age, gender, literacy rates and language, Institutional analysis also involved livelihood assets, strategies, resilience reviews of literature pertaining to stakeholder and vulnerability. The second stage of the power politics, gender issues and case livelihood profiling therefore sought to elicit studies on commercialisation processes in greater nuance. small-scale irrigation schemes elsewhere, Data collection during the second stage such as in countries in Asia namely: India, took place mainly through direct observation, Pakistan, China, Bangladesh, Vietnam and informal conversation and in-depth Indonesia (IWMI 2005), Latin America interviews. Since poverty and inequality are namely: Ecuador (Bastidas 1999) and Mexico experienced differentially among members (Kloezen et al. 1997) and Africa namely: of a household, emphasis was placed on Burkina Faso (Zwarteveen 1997) and Kenya determining individual profiles. Because of (Krishna et al. 2004). The investigation of the demanding time requirements of in-depth stakeholder power dynamics was conducted data collection, a relatively small sample within three units of analysis namely, the was drawn, and the primary emphasis was joint venture, irrigation farmer group and placed on qualitative rigour rather than irrigation farmer households. This report representivity. The data collected at the focuses mainly on power dynamics within Hereford Irrigation Scheme were triangulated joint ventures.

6 Chapter 1: Introduction

The study area centres such as Pretoria, Polokwane and Nelspruit. The five local municipalities Location and spatial extent constituting Greater Sekhukhune District Greater Sekhukhune District is a cross- are Makhuduthamaga, Fetakgomo, Greater border district municipality straddling the Tubatse, Greater Groblersdal and Greater boundary between the southern part of the Marble Hall. All of these are located Limpopo Province and the north-western within the Olifants River Basin. However, portion of the Mpumalanga Province of Makhuduthamaga and Fetakgomo are located South Africa (Figure 1). The spatial area of entirely within Limpopo Province, while the district is approximately 1 326 437ha Greater Groblersdal, Greater Marble Hall (Greater Sekhukhune Cross Border District and Greater Tubatse are cross-border local Municipality 2005; Greater Sekhukhune municipalities. This research report focuses Cross Border District Municipality 2002). on a study site within the Greater Groblersdal The district is located close to larger urban local municipality.

Figure 1: Map of the study area

7 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Physiographic features Hall and Burgersfort. The rural population Greater Sekhukhune District is characterised is distributed in varying densities across the by variations in relief, climate and vegetation. district. Makhuduthamaga and Fetakgomo, The undulating grassy plains of the Highveld which correspond to the former homeland give way to the lower-lying Bushveld areas areas of Lebowa, have the greatest rural and the mountainous terrain dissected by population densities. Other densely populated the Oliphants River system. Rainfall is rural areas occur in Nebo and Moutse, seasonal, distributed mostly in the summer which are large cluster settlements located months between November and April while in erstwhile Lebowa and KwaNdebele the winters are generally cool and dry. The homeland areas, and in Dennilton, a formerly varied micro-climates, hydrology and aspect designated ‘black’ area within apartheid in the mountainous parts have produced South Africa. The rest of the rural population micro-variations in vegetation. The beauty of Greater Sekhukhune (less than 1 000 and ecological diversity of the area have people) is scattered among the numerous encouraged the establishment of a number of small settlements that are dispersed over tourist resorts and nature reserves. much of the district municipal area. Population size and distribution Historical context According to the 2001 population census, the Peter Delius (1996) succinctly summarises total population for the district is the history of Greater Sekhukhune District as 967 197 (Stats SA 2001). This represents follows: an increase of approximately 54 347 people Sekhukhuneland was the heartland of from the figure of 912 850 in the census of the formidable Pedi Kingdom which 1996 (Stats SA 1996). However, there are long held the Swazi, the British and the inconsistencies in the existing statistical Boers at bay. In the twentieth century it data on the total population of Greater was transformed into an impoverished Sekhukhune. Stats SA census figures indicate and overcrowded ‘reserve’ but that from 1996 to 2001 the population for the remained a byword for rural local municipalities in the district increased resistance; in the 1980s it achieved by an average of 1.2%. But according to the national notoriety as the epicentre of data provided by the 1995 Water Services witch burnings. Development Plan (WSDP) of DWAF, in It is worth noting that black people of 1995 the total district population was Greater Sekhukhune District have historically 974 830, indicating a decrease of 7 366 played a significant role in rural resistance people in the period 1995 to 2001. Yet, while to both colonialism and apartheid, within the IDP document of 2002 formally accepts a context where much of the resistance in this figure, the 2004–5 IDP document uses post-Second World War South Africa was the 2001 census data. It is to be hoped that the urban proletariat based. People like the late current district IDP has verified the Stats SA Flag Boshielo, after whom the water supply 2001 census data and not simply overlooked dam above the Phetwane Irrigation Scheme a discrepancy of over 62 000 people between (the research site not included in this report) the total population data provided by the is named, are documented as having actively 1995 WSDP and that provided by the pioneered the initial armed resistance against 1996 census data. Repercussions of such a apartheid. The historical onslaught on the discrepancy might include under-budgeting local political power structure, dispossession for interventions within the poverty node. of land and related resources and erosion of Women comprise 55.5% of the total livelihoods appear to have provided a strong population in Greater Sekhukhune District impetus to the early phases of resistance to (Stats SA 2001). According to the 1996 colonialism by the Pedi of Sekhukhuneland. and 2001 census statistics (Stats SA 1996; After this, the rural–urban linkages between 2001) 94.7% of the population reside in Sekhukhuneland and urban-industrial rural areas, while the rest is concentrated in centres also fostered the rural resistance urban centres such as Groblersdal, Marble to colonialism, and later to apartheid. This

8 Chapter 1: Introduction

was articulated mainly through the migrant service sector provided a significant number labour system. Sekhukhuneland became a of the jobs in the district, however this major source of cheap labour for the colonial sector has shrunk and therefore is now less political economy following the defeat of able to absorb prospective labour (Greater Sekhukhune by the combined British, Boer Sekhukhune IDP 2002). Lack of employment and Swazi onslaught. The term ‘Nebo’, which opportunities has encouraged the migration today refers to a densely populated region of significant numbers of the rural population within Makhuduthaga local municipality in to various urban centres, including centres in Greater Sekhukhune District, originated as the Gauteng Province. Table 1 summarises an acronym for ‘Native Employment Bureau selected characteristics of the district. Office’. According to the data in Table 1 salaries Following the re-alignment of municipal and wages, remittances, pensions, grants boundaries in terms of the Municipal and access to agricultural land make Demarcation Act of 1998, the contemporary significant contributions to livelihoods configuration of Greater Sekhukhune District in the district. There are relatively low has brought together rural people with a proportions of households with access to land diversity of backgrounds and cultures, mainly for agricultural use (30.4%) and engaged the Pedi, Ndebele, Ntwane (Tswana) and the in crop farming (30%). There are very Swazi, among others. Although these have low proportions of households engaged in historically experienced varying degrees of livestock farming (1.2%) and horticulture conflict over time, conditions of poverty and (0.3%), as well as households which depend inequality have been an enduring common on the sale of farm produce as the main factor. source of income (1.2%). Debates around integrated development plans (IDPs) and Socio-economic features local economic development (LED) in the Greater Sekhukhune District has a dualistic district indicate that land redistribution socio-economic structure of the kind found in and greater involvement of black people many of South Africa’s rural municipalities in the farming sector are priority issues in which have been demarcated since the Greater Sekhukhune (Tapela 2002; Greater promulgation of the Municipal Demarcation Sekhukhune IDP 2002; Greater Sekhukhune Act No. 27 of 1998. The settlement pattern District Status Report, January to July 2003). indicates the social and physical segregation The key challenges for development in of communities. The relative affluence of Greater Sekhukhune District, as outlined by the formerly designated ‘white’ commercial the District Status Report for January to July areas contrasts with the high levels of poverty 2003, are: and unemployment in the non-commercial • poor social and economic infrastructure former ‘black’ areas. The latter have a lower in all areas of the municipality Human Development Index (HDI), with • poor social and physical integration of large backlogs in services and infrastructure, the communities of the district and very small or non-existent economic • high poverty levels bases. Recently there have been moves to • gender inequality promote economic integration and equity • inaccessibility of basic services such as through various BEE initiatives, including the health and education commercialisation of small-scale irrigation • lack of economic opportunities and schemes. However, the underlying dualism wealth creation for the majority of the largely endures in many sectors and areas population within the district. • landlessness Commercial agriculture provides the • environmentally unsustainable utilisation bulk of employment opportunities in the of resources in the area district, but more than half of the population • under-utilisation of the tourism potential (64.8%) is unemployed (Stats SA 2002), within the nodal area, and particularly the youth (defined as between • under-utilisation of agricultural potential 15 to 35 years). In the past, the government in both production and agri-processing.

9 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Table 1: Greater Sekhukhune: Summary of selected living conditions, 2002 Characteristic Measure (as a %) Unemployment rate (in terms of the expanded definition) 64.8 Proportion of households below minimum living level (R1 100 p.a.) 77.4 Proportion of female-headed households 58.6 Proportion of households with access to land for agriculture 30.4 Proportion of households engaged in field crop farming 30.0 Proportion of households engaged in livestock farming 1.2 Proportion of households engaged in horticulture 0.3 Proportion of households which never had a problem in satisfying their food 28.9 needs Proportion of households which depend on sale of farm produce as main 1.2 source of income Proportion of households which depend on remittances as the main source of 29.1 income Proportion of households which depend on pensions and grants as the main 37.8 source of income Proportion of households which depend on salaries and/or wages 21.6 Proportion of households which depend on other sources of income 6.9 Proportion of households with NO income 3.3 Sources: Stats SA 2002; Sekhukhune IDP Document 2002:20.

According to Delius (1996), contemporary the rural poor and to ensure their wellbeing conditions in the Sekhukhune region (IDT 2000:iv). Prior to this, the Office of the exemplify the daunting task of reconstruction Presidency of South Africa had directed the demanded of South Africa’s democratically- formulation process for the ISRD Strategy elected government. Greater Sekhukhune (ISRDS), and President Thabo Mbeki had District is one of 13 rural poverty nodes formally announced the ISRDS on June 25 identified in 2001 for accelerated rural 1999. development through the South African The ISRDP is the product of a concerted government’s ISRDP. The active role played effort by the South African government, by the rural people of Greater Sekhukhune acting in conjunction with local, national in the struggle against colonialism and and international structures and networks apartheid, and the prevailing impoverishment (IDT 2000). The programme draws from and inequality seem to have been strong a diversity of development approaches and compelling factors for the government to interests. Indeed, international frameworks prioritise the district for the ISRDP. The such as Agenda 21 and the Millenium question, though, is whether this will translate Development Goals appear to have into a tangible improvement of livelihoods significantly influenced the drafting of the for rural people. ISRDP. While this enriched the discourses that informed the ISRDP design process, the The ISRDP same diversity has also created difficulties in In July 2000, the ISRDP was launched by the the conceptualisation of the rural challenge in South African government, after consultation South Africa and the requisite interventions. with a wide range of key stakeholders, in a These difficulties are reflected in the ongoing renewed attempt to improve opportunities for debate on whether the ISRDP provides an

10 Chapter 1: Introduction

adequate construct for the resolution of the government intervention. Practitioners within rural challenge. various sector departments appear to have recognised the weaknesses inherent in the Origins uncoordinated delivery of assets and services. The ISRDP emerged during the African For example, the ‘cluster’ delivery model National Congress’s (ANC’s) second term developed by the National Department of in government. Everatt (2004:3) asserts Public Works (NDPW) for implementing the that between 1999 and 2004, there was Community Based Public Works Programme a shift away from the previous (1994–1999) became the ‘nodal’ model for the ISRDP emphasis on policy formulation and releasing (Everatt 2004). resources to benefit the majority of citizens The degree to which the nationally towards a focus on implementation and and locally driven imperatives for the service delivery, including better organisation ISRDP reflect rural people’s interests of government through mechanisms such as might ultimately prove to be the key the Cabinet Cluster system. The beginnings reckoning factor determining the impacts of of this shift were rooted in the ANC’s first interventions on the livelihoods of resource- term in government. This was the design poor people in designated poverty nodes in phase of the Cabinet Cluster system and South Africa. systems and structures such as the Poverty Relief Fund, the annual Cabinet Lekgotlas Vision and mechanisms for and the Medium Term Strategic Framework. implementation However, there are varying views regarding The vision of the ISRDP is to: the contributions of the policy and legal attain socially cohesive and stable rural frameworks developed in the ANC economies with viable institutions, government’s first term of office. sustainable economies and universal One view (Everatt 2004:4) is that the access to social amenities, able to attract ISRDP was a response to the failure of the and retain skilled and knowledgeable Rural Development Strategy and the Rural people who are equipped to contribute to Development Framework to articulate growth and development (IDT 2000:19). a clear methodology for achieving the RDP The articulation of this vision involves an requirements and standards, due to a lack incremental approach wherein the initial of experience with the complexities of focus on 13 identified pilot nodal areas shall governance. Everatt’s view is therefore that be broadened to embrace all impoverished the RDP provided the key macro-policy rural areas in the country by the year 2010. A that set out the delivery requirements and further 17 nodes were identified in September standards for the ISRDP. Another view 2003 but have yet to be gazetted. (Van Rooyen et al. 2001:42) recognises the The articulation of the ISRDP vision also role of both the RDP and Gear in providing involves the integration and co-ordination the policy grounding of the ISRDP, the of rural development interventions by latter being seen as providing the requisite various sectors and spheres of government stable macro-economic framework. The in South Africa. In this regard, the integrated contrasting views probably reflect divergence development planning process provides in the conceptual bases for the ISRDP and the principal instrument for integration and contradictory perspectives on the broader co-ordination, as required by the ‘Systems rural development approach adopted Act’. This act gives municipalities the legal by government as well as reflecting the responsibility to undertake IDP processes to interests and tensions inherent in the policy guide and inform all planning, budgeting, framework. management and decision making in Notwithstanding the diversity of municipal areas, and therefore places conceptual foundations and the impacts of municipalities in a key position to co-ordinate international frameworks on the ISRDP, the ISRDP. there seem also to have been some The central positioning of municipalities practical national and local imperatives for in the implementation of the ISRDP reflects

11 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District the government’s objective to decentralise management and funding mechanisms to political and administrative decision making focus the expenditure of the three spheres of to local authorities. Other policy objectives government in order to more effectively and pertaining to rural development include: efficiently respond to needs and opportunities • the promotion of macro-economic (See Figure 2). It is perhaps worth noting that stability to create favourable conditions the implementation approach is not based for investment and trade on additional funding from government, but • agricultural policy reform to remove on increasing efficiency in the application distortions and enhance competitiveness of public funds to create appropriate outputs in the agricultural sector in the rural areas where they are required. • investment in infrastructure and service Towards this end, the structures and delivery to strengthen links between rural procedures of the Medium Term Expenditure areas and the economy as a whole, to Framework provide the mechanism for reduce the costs of production in rural localities and to make rural areas more rationalising national and provincial budget desirable places in which to live structures into an ‘amalgamated expenditure • investment in human capital to enhance envelope’ to meet ISRDP objectives. the skills and health of rural people Mobilisation of funds takes place through • broadly-based ownership of land and various delivery structures and relationships, productive assets to address the historical including the economic, social and inequalities in access to land and housing infrastructure ‘clusters’ and ‘partnerships’ (Goldman et al. 2002). of various state organs, the private sector, The implementation of the ISRDP involves public-private partnerships and the donor the use of existing institutional, planning, sector.

Figure 2: Amalgamated expenditure envelope for funding the ISRDP

SOURCES OF FUNDS

Inter-governmental Ministerial fiscal flows/ tax Other budgets Private sector revenues & user fees

Line function

NGOs, donors 1 2 3 4 Municipal budgets Private sector & others

Municipal expenditure on programmes

Basket of programmes

Source: IDT 2000:28.

12 Chapter 1: Introduction

Box 1: Some key outputs of the ISRDP • An inter-governmental relations organalysis that outlines the key roles and responsibilities of critical entities across all spheres of government. • The assignation of a core group of 14 national ministers to act in pairs as political ‘champions’ for individual provinces and rural nodes. • The identification of political and technical champions at the provincial and nodal municipal levels. • The establishment of an Inter-Departmental Task Team structure to manage and co-ordinate the ISRDP nationally. • The initiation of a process to establish provincial and nodal municipality Technical Co-ordinating Committees to manage and co-ordinate the ISRDP at an operational level. • The initiation of process to establish nodal delivery teams in all the nodal district municipalities. • The identification of ‘anchor’ projects for each of the 13 pilot nodal areas, and the incorporation of these into the relevant IDPs.

Source: IDT 2002.

The implementation of the ISRDP has • slow response by institutional systems included the establishment of political and and actors to the demands for new technical institutions to drive, manage and protocols of organisational behaviour implement the programme across the three • poor visibility and support of political spheres of government (see Box 1). champions. It is evident that the ISRDP is basically An evaluation of the ISRDP, on behalf an institutional rationalisation strategy for of the Independent Development Trust aligning the activities of all three spheres (IDT) in 2004, showed that there had of government with local development been only limited improvements over the priorities. Although the ISRDP has previous four years and the programme no tangible development outputs, the was still beset with insufficient capacity implementation framework for the and inadequate co-ordination with and programme includes the identification of participation by provincial and national ‘anchor projects’ around which the various departments (Everatt et al. 2004). Although development initiatives will revolve. Small- a great deal of money had been made scale irrigation schemes constitute some available for capacity-building initiatives in of the 17 anchor projects in the Greater the nodes, such funding was not guided by Sekhukhune District. clear planning. Institutional arrangements Despite achievements in setting up at the nodal level had yet to be sufficiently a variety of institutional arrangements to refined. Although relations between district implement the ISRDP and the identification and local municipalities seemed to be of nodal anchor projects, a common view is generally adequate, there were problematic that the implementation of the programme undercurrents that needed to be dealt has been beset with a number of difficulties. with. The IDP process required greater Prior to the onset of the ISRDP in 2001, participation by the national sphere and the national Inter-Departmental Task Team better co-ordination of planning, budgeting identified the following challenges: and delivery between all the spheres of • insufficient alignment across the three government. spheres of government The previously mentioned challenges • lack of adequate funding and technical have been compounded by the fact that inputs for projects the ISRDP has emerged within a context

13 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District in which there has been ‘very little co-ordination problems, an Inter-Provincial concentration on spatial planning in rural Co-ordination Committee was established areas to succeed the former apartheid in 2003. This research could not establish planning strategies’ (Swartz et al. 2003:3). how effective this structure has been. The existence of this provincial level structure Some challenges to implementing the did not, however, change the ground level ISRDP in Greater Sekhukhune perceptions of difference or reduce the The implementation of the ISRDP in Greater suspicions emanating from these perceptions. Sekhukhune appears to have been beset Co-ordination problems are compounded by obstacles relating to local government by the persistence of the sectoral approach, reform. Institutional capacity seems to have and many government officials have been lacking or not robust enough. There continued to work within the ambit of have been insufficient administrative skills, their line departments irrespective of the inadequate office infrastructure, high staff requirements for integration. Municipal turn-over, lack of co-ordination between the actors express frustration over the apparent technical and the political champions of the disregard by many senior government ISRDP and difficulties in mobilising funding officials of the municipalities’ legal mandate for anchor projects. Residual differences to co-ordinate development within local in the budgeting cycles of the District authority jurisdictions. This disregard Municipality and national and provincial involves the generally inconsistent attendance departments have also posed a difficulty to of municipal meetings by senior government the financing of projects prioritised in the officials, who often send junior officials IDPs. The District Municipality has also despite such meetings requiring input from faced problems in co-ordinating projects officials with decision-making authority. across local municipal jurisdictions. To some Interviews with senior government extent, this problem appears to have been due officials in 2003 revealed a perception to the failure by the District Municipality to that the governance process prescribed by overcome the negative effects of competition the ‘Systems Act’ is too cumbersome and among the various local municipalities. time-consuming for effective delivery. The problem of co-ordination has also Given the requirements of the Performance been exacerbated by the cross-border issue. Management System introduced by Some respondents have expressed concerns government, many officials therefore tend over the possible capture of resources by to prioritise activities within their key people belonging either to ‘Mpumalanga’ performance areas, to the detriment of or to ‘Limpopo’ provinces. These concerns the development co-ordination activities are mostly associated with the Greater of municipalities. Staff of institutions Groblersdal cross-border local municipality, providing support to the Greater Sekhukhune which brings together the former white municipality express the view that there commercial areas, black township areas is a need for government to make active and the Lebowa homeland, as well as participation in development co-ordination people of different ethnic identities. Beyond activities mandatory for all relevant people’s perceptions of capture, there have senior officials. It is acknowledged that been practical governance issues around the municipality needs to be proactive in co-ordinating the enforcement of differing ensuring that it has the capacity to play the by-laws of two provinces within the same co-ordination function effectively. cross-border municipality. Finally, funding of The problem of institutional participation projects in the cross-border municipality by appears to have been associated with the early provincial departments has been split along phase of the local governance framework provincial lines. To many people this has that emerged in 2001 following the passing created the impression that the municipality of the ‘Systems Act’. The problem might be favours one province over the other. interpreted as having been one of institutional In an attempt to resolve the cross-border inertia, in which government officials

14 Chapter 1: Introduction

continued with procedures and practices that Currently the general view of people had become outdated by the new governance working in government departments, NGOs policy and laws. Since 2004, there has been and the private sector is that development a shift towards more active participation by co-ordination by municipalities can be government officials in various development improved. This view is often associated with co-ordination committees, within and outside the management of IDP processes and LED municipal structures in Greater Sekhukhune. structures by municipalities.

15 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District Chapter 2: Emerging small-scale irrigation in Greater Sekhukhune

In the context of the ISRDP, there has been an acceleration of attempts to promote economic integration and equity in the agricultural sector within the Greater Sekhukhune District. Small-scale irrigation farming and joint ventures are envisaged as constituting the key routes towards black economic empowerment in agriculture. This chapter outlines key issues pertaining to the commercialisation of small-scale irrigation schemes in the district.

Characteristics the ‘Revitalisation of Smallholder Irrigation n Greater Sekhukhune, there are Schemes’ (RESIS) programme. basically two types of emerging small- The key government departments Iscale irrigation scheme associated with involved in the ongoing collaborative effort BEE through joint ventures. The first type to promote entry by black farmers into comprises schemes located in the formerly commercial agriculture include the DLA, the white commercial farming areas, such as NDA, DWAF and the provincial departments the Hereford Irrigation Scheme. This type of Agriculture and Public Works. A number of scheme, often associated with the DLA’s of actors from the non-governmental and LRAD programme, the NDA’s Farmer private sectors have also been involved, Settlement Programme and the DLA’s the latter mainly through joint ventures. erstwhile Settlement and Land Acquisition This collaborative effort is captured in IDP Grant, is not very common. Indeed, the slow documents within the Greater Sekhukhune pace of the LRAD programme is considered District. Two of the small-scale irrigation a ‘burning issue’ by emerging black farmers schemes, namely the Mid-Arabie Olifants in Sekhukhune, while DLA officials attribute and the Lepellane, are among the 17 ISRDP this to the prevalence of overlapping and anchor projects for the district. competing land claims and delays in the Despite support for the commercialisation processing of grants. The second type of of small-scale irrigation schemes, inroads irrigation scheme includes government- by black irrigation farmers into the owned schemes located in communal lands predominantly white commercial farming of the former Lebowa homeland, such as sector remain small. Likewise, the RESIS the Upper Arabie, the Mid-Arabie Olifants programme’s impact on the structure of and the Lepellane irrigation schemes. Both small-scale agriculture has been minimal. types of scheme involve a shift towards Nonetheless, there is a heightened transferring of land rights, water allocations preoccupation in certain government, and responsibility for irrigation management civil society and private sector circles to black small-scale farmers, with financial, with promoting joint ventures in Greater material, technical and other support from Sekhukhune, based on the assumption government departments, civil society and that these are critically important to the the private sector. For the government-owned integration of black irrigation farmers into irrigation schemes, this initiative is termed the mainstream commercial production sector

16 Chapter 2: Emerging small-scale irrigation in Greater Sekhukhune

and, by extension, to equity in the irrigation water should be re-allocated on the basis farming sector. of efficiency, amongst other criteria. It is doubtful that such commoditisation of water Challenges contributes towards alleviating rural poverty in the Greater Sekhukhune District [described Water access issues in Chapter 1 of this report]. Water scarcity is a major concern in the Indeed the commoditisation of water district. Not only is the Olifants catchment seems to have particularly dire implications area drought-prone, but all the available for the unfolding programme to promote water appears to have already been BEE through the commercialisation of allocated, mostly to commercial irrigation, small-scale irrigation schemes. Recognising tourism, industrial and domestic uses. this, the DWAF has recently adopted the While discrepancies in various data sets Policy on Financial Assistance to Resource regarding water availability and usage in Poor Irrigation Farmers as a means towards the Olifants catchment area make it difficult ensuring access to water by these farmers. to determine the precise nature of the water Despite the adoption of this policy, however, scarcity problem, there is agreement that there is a danger that the use of economic the established commercial farming sector measures of efficiency in performance accounts for the bulk of water usage. By evaluations of emerging farmers might contrast, emerging small-scale irrigation result in a reversal of their livelihood gains. farmers currently have insufficient water and Performance evaluations should therefore a number of interventions are underway to take into account the possibility that not all improve water access for this sector. the irrigation farmers can or will become A worrying factor is that the local fully-fledged commercial farmers, and build authorities in Greater Sekhukhune do not livelihood sustainability measures into the seem to have adequately conceptualised evaluation process. the issues underlying water scarcity. The Greater Sekhukhune District IDP links the Land issues problem of scarcity to visions of exponential According to the ISRDP documents for population growth that might eventually Greater Sekhukhune, land reform is critical exert an excessive demand on the available to the realisation of ISRDP targets in the water resources. No mention is made of the poverty node. Although the district is viewed challenge of inequality in the existing water as having a high agricultural potential, allocations. Moreover, the ongoing debate 70% of the farmers, mostly black, are among water sector stakeholders on the ‘subsistence farmers’ (Greater Sekhukhune livelihood implications of commoditising Cross-Border District Municipality 2002). water is also not captured in the IDP and Of these, 30.4% have access to land outside ISRDP documents. of their small homestead plots (Stats Concerns over water scarcity appear SA 2002). Land use in three of the five to have gained prominence following the constituent local municipalities remains recent development of platinum mining dominated by commercial farming areas. in the eastern rim of the district and since The legacy of inequitable allocation of land moves by the government, private and non- therefore persists in Greater Sekhukhune, governmental agencies to promote entry by and 25% of the total land area has been black farmers into commercialised irrigation subject to land claims (Greater Sekhukhune farming. Envisaged increases in the demand Cross-Border District Municipality 2002). for water from the small-scale irrigation Most of these claims are from Greater farming and mining sectors have given rise to Groblersdal, Greater Marble Hall and intense inter-sectoral competition over water Greater Tubatse local municipalities, which (Farolfi & Perret 2002). This competition have significant proportions of land under appears to have prompted some government white commercial farming. Black farmers officials and scholars to argue that productive in the Nebo Region of the district describe

17 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District land redistribution as ‘a burning issue’ and irrigation farmer development needs to take perceive the LRAD programme as having into account the multiple realities, needs fallen far short of expectations, due to an and aspirations of black farmers, and to give impasse in the processing of applications particular attention to the poorest and most from prospective entrants into commercial vulnerable people within the schemes. production. According to the DLA, this is because much of the farmland identified Joint ventures by applicants is subject to unresolved land Joint ventures within the selected sites claims. It is perhaps worth noting that most provide a useful context for examining the of the identified farmland is located in the ways in which the difficulties pertaining to Mpumalanga portion of the cross-border land rights and access to water have been district municipality, while the applicants are grappled with in attempts to commercialise mostly from the Limpopo Province, where small-scale irrigation farming. The most of the district’s communal areas are predominant type of joint venture in located. emerging small-scale irrigation schemes in While the commercial farming areas Greater Sekhukhune is contract farming. are subject to land claims and calls for land Mayson (2004) defines this type of joint redistribution, residents of areas under venture as an agreement between small-scale communal tenure experience problems of farmers and processing or marketing firms, tenure insecurity. Claassens (2001), for in which farmers commit to supplying an example, documents tenure insecurity within agreed quantity of goods of a special quality. the Rakgwadi area in which the Upper Arabie In exchange, the farmers receive payment Scheme is located. Land tenure insecurity seems largely a consequence of past apartheid for produce as well as support with credit, practices which gave chiefs more power training and extension services, production over land than they had under traditional machinery and other resources. The activities systems of government, and the subsequent of the joint ventures associated with emerging abuse of that power by some of the chiefs. small-scale irrigation farmers in Greater Although the Communal Land Rights Act of Sekhukhune include joint production, agri- 2004 is intended to strengthen the security processing and marketing initiatives. of communal tenure, how effective this Joint ventures in small-scale irrigation instrument is, has been subject to ongoing schemes are not a new phenomenon in the criticism. Some of the criticism has revolved Sekhukhune region. In both the commercial around the negative implications of the Act and communal farming areas, farmers for the more vulnerable groups, particularly have experiences of joint ventures prior women, and the possible reversal of power to 1994. A common refrain in farmers’ and equity gains conferred by the post- accounts is dissatisfaction with the way in 1994 National Constitution (Parliamentary which joint ventures were implemented. hearings on the Communal Lands Rights Bill, Problems include private investors’ lack of November 2003). transparency and accountability, a sense of Land- and water-related challenges to disempowerment among irrigation farmers commercialised small-scale irrigation farming and the ultimate failure of the joint ventures, in Greater Sekhukhune raise questions about resulting in losses of livelihoods and assets. the extent to which this form of intervention The selected case-study sites for this report can contribute to enhancing the livelihoods of provide insights on the degree to which the rural people. In addition to providing secure contemporary approach to joint ventures has land tenure, water access rights, technical taken into account the historical experiences skills and managerial support, small-scale of small-scale farmers.

18 Chapter 3: Hereford Irrigation Scheme

Chapter 3: Hereford Irrigation Scheme

The Hereford Irrigation Scheme is the focus of this chapter. Plagued by contestations over land and water resources, as well as the changing partnerships between the resource-poor irrigation farmers and the private sector, the Hereford Irrigation Scheme offers an interesting study of the dynamics and power struggles that have emerged in the historically white commercial farming areas following the implementation of ‘black economic empowerment’ in agriculture.

ested within the gap between the chapter gives an account of the issues Olifants River and the eastern surrounding the joint ventures that have been Nmargins of the small town of promoted within the Scheme. Groblersdal, south of the R33 road to The Hereford Irrigation Scheme is situated Stoffberg, is a cluster of small-holdings on portions 236, 237, 238 and 239 of 53JS whose most obvious defining features are Loskop South Farm along the Olifants River the numerous tobacco-curing barns that and the Hereford Canal (see Figure 1). The tower over a series of squat cottages in scheme is sited at an altitude of 1 000m, varying states of repair and disrepair (Figure approximately 44km downstream of the 3). A patchwork quilt of ploughed fields, Loskop Dam at an altitude of 1 300m. The flourishing gardens and fallow land is spread scheme is located within the commercial out among the cottages and barns. Closer farming area administered by the Hereford scrutiny might reveal sprinklers quietly Irrigation Board, in the Greater Groblersdal humming away and people labouring and Local Municipality of Greater Sekhukhune gradually embroidering changes to the District. The Hereford Irrigation Scheme mosaic of the landscape (Figure 4). This is occupies a total area of 192.19ha within the Hereford Irrigation Scheme, a small-scale the approximately 2 140ha managed by the irrigation scheme that was revived by black Hereford Irrigation Board. farmers in 1997. What this idyllic vista does not reveal are the historical and ongoing contestations over land and water resources, History prior to land as well as the changing partnerships between ‘reclamation’ the resource-poor irrigation farmers and the The commercial farming area along the private sector. Hereford Canal, presently managed by the The Hereford Irrigation Scheme provides Hereford Irrigation Board, was proclaimed an interesting study of the dynamics that have in 1926 in terms of the Irrigation and emerged in the historically white commercial Conservation of Water Act 12 of 1912 farming areas following the implementation (Tren & Schur 2000). Private landowners of BEE in agriculture. Joint ventures provide established irrigation farming following the one important context for examining the construction of a small weir and a canal by impacts of these dynamics on the livelihoods two farmers, Meissner and Beukes. After the of resource-poor irrigation farmers. This Second World War, following the accession

19 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Figure 3: Panoramic view of the scheme

Figure 4: Close-up of a tobacco curing barn, cottage, chicken coop and garden

20 Chapter 3: Hereford Irrigation Scheme

of the National Party government in 1948, agricultural training and promised settlement the Hereford area was developed as a welfare on the vacant farm, as part of a pilot project settlement scheme for white workers who of the Mpumalanga Provincial Department were pensioned early from mines and other of Agriculture. The farmers heard nothing industrial sectors (Butler 1994). These about the pilot until, four years later, in 1997 a workers were among the National Party’s sign was erected on the farm indicating that it key constituencies (Kruger 2001:2). Portions had been sold. This prompted the farmers to 236 to 239 of 53JS Loskop South farm, in invade and forcibly occupy the land. which the Hereford Irrigation Scheme is After the invasion, there was heated located, were developed by the government debate over the legitimacy of the occupation. specifically as a white settlement scheme All the relevant stakeholders, including the for soldiers returning from the war. These NDA, the DLA, the NDPW, the Groblersdal war veterans-cum-tenant farmers abandoned Resettlement Committee, the Groblersdal the land in the 1980s for a number of Civic Association, the ANC Youth League, reasons, including the failure of a tobacco the Groblersdal Taxi Association and local farming joint venture and insecurity due traditional leaders (diKgoshi), agreed at to anti-apartheid activism. Deprived of a meeting that the invasion was justified.1 gainful employment, the scheme’s black The Hereford Irrigation Scheme was then farm workers were compelled to relocate to established, the farmers initially referring to Tafelkop and Motetema settlements, between themselves as the TFA, but later changing 10 and 15km north-east of Groblersdal. their name to the ‘Hereford Farmers’ For ten years the land lay fallow and Association’ to distinguish the particular infrastructure was vandalised and became group of farmers from the larger parent dilapidated. organisation. The DLA then began a process to lease the land for a renewable three- Non-violent occupation year term to the small-scale farmers, with On 1 February 1997, a group of 32 black the provision that land ownership would farmers invaded and occupied the unused eventually be transferred from the state to the state land within portions 236 to 239 of farmers.2 53JS Loskop South Farm. The farmers The DLA prioritised this project under the were members of the Tafelkop Farmers’ name ‘Hereford Irrigation Scheme’. Since Association (TFA), currently consisting of the land was not under its control, the DLA more than 800 members. Most of the 32 had to motivate for a transfer of title from the farmers who invaded Hereford had spent responsible department, then the NDPW, to their childhoods working on the Hereford the farmers. The NDPW was to transfer the smallholdings alongside their parents. four portions of land to the NDA, who would The black small-scale farmers’ interests in then transfer the land to the Mpumalanga the four portions of 53JS Loskop South farm Provincial Department of Agriculture.3 The related primarily to the availability of water provincial Department of Agriculture would for irrigation, the possibility of secure tenure then transfer the land to the DLA, for lease on arable land, as well as access to funds to and eventual transfer to the small-scale buy tractors and other agricultural inputs. The farmers. The transfer process, however, was opportunities to generate livelihoods through complicated by a number of factors. farming in the impoverished communal lands First, there was a stand-off between the around Tafelkop and Motetema had been farmers and the provincial and regional very limited, and poverty and food insecurity department officials, with the farmers was rife. These constraints and hardships, refusing to speak to these officials.4 however, were not the principal motivations Consequently, the DLA resorted to involving for invading the land. national departments and not the provincial or The main reason for the farmers’ invasion regional offices in the land transfer process, was that in 1993, a group of black small- motivating the transfer of land from the scale farmers from Tafelkop had been given NDPW to the NDA. The DLA also proceeded

21 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District to provide support to the farmers through agreement between the governments of South a contracted consultancy, the ‘Mpumalanga- Africa and the United States. The farmers West Consortium’. The NDA prepared to were to be granted the land on the basis of enter into three-year lease agreements with the anticipated lease agreements from the the 32 identified farmers, with an option provincial DALA and the farmers’ business for the farmers to purchase the land. The plan. farmers then applied for assistance from the However, the land transfer process NDA’s Farmer Settlement Support Fund and encountered further problems. Following received approval from the Minister of Land the Minister’s decision, title was transferred Affairs and Agriculture. This effectively from the NDPW to the Agricultural Research would have been a duplication of government Council (ARC).7 This created tension among assistance. The then-Minister of Land Affairs the small-scale farmers,8 who were reportedly and Agriculture, Derek Hanekom, was called threatened by outside parties who claimed upon to intervene in the resolution of the that the small-scale farmers had no right complexities that emanated from the process to the land.9 In addition, the small-scale surrounding farmer support for the Hereford farmers reportedly alleged that a ‘third force’ Irrigation Scheme. from the past was preventing progress, and The Minister responded, firstly, by that various political parties were actively cautioning against further similar land following the progress of the Hereford occupation. Secondly, the Minister decided project.10 Some key respondents describe the that the settlement of the farmers should transfer of land to the ARC as a ‘suspicious’ be facilitated through three-year lease manoeuvre by certain government officials to agreements, with the option to buy.5 He also forestall the allocation of land to black small- wrote: scale farmers. Some consider this transfer The National Department of to have been the trigger that prompted the Agriculture should not in any way be invasion and occupation of the scheme. directly involved in the settlement of It is worth noting that the rest of the farmers, the leasing or administration portions of 53JS Loskop South farm of land. It just confuses matters. Agency agreements should be entered – excluding portions 236 to 239 – then into with provincial departments belonged to the Mpumalanga Provincial or local government to administer Department of Agriculture. This department leases or manage certain farmer motivated for a transfer of its portions of settlement programmes. The two DGs the farm to the ARC around the time that should please meet to discuss the portions 236 to 239 were to be transferred rationalisation necessary to locate from the NDPW, through the NDA, to the leasing function which is done by the DLA and then leased to the small- NDA in DLA. In the face of substantial scale farmers. For some reason, the land demand for land, 5 hectares of transfer from the Provincial Department of irrigated land is a lot – the conditions Agriculture to the ARC included the land of lease extensions should include earmarked for the small-scale farmers.11 This performance assessment.6 meant that before the process of transferring The farmers accepted the minister’s decision, land to the small-scale irrigation farmers and gave assurances that the precedent set could begin, it was necessary to reverse by the Hereford case would not be repeated, the transfer of land to the ARC back to the but that the other members of the TFA would Department of Public Works. Consequently, follow the normal procedure of applying there was a delay of three years before the for land acquisition through the DLA lease agreements could be effected (Kruger District Office. A business plan outlining 2001). However, the inception of the LRAD the proposed use of the land was then programme in 2001 provided a mechanism drawn up with the help of Africare, an NGO through which the land transfer could be put operating under a bilateral development aid into effect.12

22 Chapter 3: Hereford Irrigation Scheme

At the time of this study, the lease agreements process and some of the farmers in the entered into on 16 August 2000 had lapsed original list of beneficiaries submitted to the and since been renewed on an annual basis DLA in 1997 are no longer part of the group. with the NDPW.13 The four lots of land, In addition, other farmers have since replaced portions 236 to 239, of 53JS Loskop South three of the farmers who occupied the scheme farm had been surveyed, subdivided into and attempted commercial farming (Table 2). 33 plots and the title deeds registered at the According to the chairperson of the Deeds Office in Pretoria. However, the land Hereford Farmers’ Association, the changes had yet to be transferred from the Department in the composition of the farmers’ group of Public Works to the Provincial Department are mainly due to the failure of the replaced of Agriculture and Land Administration, and farmers to ‘demonstrate a commitment to the farmers had still to be formally granted the collective goal of becoming commercial ownership rights. farmers’. Several criteria are apparently used to determine the degree of such commitment; Early phase of occupation these include diligence in production The first few years following the occupation activities and subscribing to the governance of the Hereford Irrigation Scheme by black practices of the group. farmers appear to have been marked by Plot sizes range from 0.70ha to 13.79ha, ongoing tension between the occupiers and with a mean of 5.4ha (see Table 2). The established white farmers in the Hereford gender distribution of the allocated plots is commercial farming area. During in- 81.8% male and 18.2% female. Farmers of depth interviews with the black farmers, 60 years and older command the largest share respondents alluded to conflicts, mistrust, low (39.4%) of allocated plots (Table 3; Figure 5). levels of co-operation and exclusion from Of this age group, 92.3% are male. The plot water governance by the Hereford Irrigation size allocation did not seem to be strongly Board during the early phase of settlement. linked to income, gender or membership of Piontek (2000) documented small-scale the governance structure, although the five farmers’ experiences during this phase. largest plots are allocated to male farmers. Respondents linked their earlier problematic Several factors seem to have determined relations with the established white farmers to the pattern of allocation that has emerged. their lack of ownership rights to the land. The The existing variations in plot size are respondents also pointed out that the support inherited from the original demarcations for from a few white commercial farmers in the tenants of the welfare settlement scheme. immediate aftermath of the occupation had One respondent explained that the pattern gradually evolved into a broader and more of occupation of plots had largely been co-operative relationship with the farmers. determined by events on the morning of 1 February 1997. The group had previously Land allocation agreed that as soon as each farmer occupied The total area of the Hereford Irrigation a plot, he or she would hang up some Scheme is 192.19ha. Initially 33 plots were ‘laundry’ on a line outside to indicate that surveyed, although there are now 34 plots of the plot had been claimed. Among the land on the Hereford Irrigation Scheme and present plot holders, however, are farmers members of the association reserve plot 34 who are recorded as having been too afraid for collective use. The remainder of the plots to invade the land, although they were part are allocated to the 33 farmers who make up of the original group that had signed up to the Hereford Farmers’ Association. invade Hereford (Piontek 2000). Also, among There have been some changes in the present plot holders are some farmers who composition of the original farmers’ group. have replaced original occupants who either There is currently one farmer more than the subsequently ‘left’ their plots or who were number of farmers identified during the land ‘removed’ due to a failure to demonstrate invasion, occupation and rights formalisation their commitment to the collective goal.

23 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Table 2: Allocation of smallholdings in the Hereford Irrigation Scheme, 200414 Plot Emerging farmers prior to 2004 Emerging farmers in 2004 Plot size number Name Gender Name Gender (ha) F Matthew Mokolobetsi M Richard Kenosi M 5.15 N Spencer Mahlatini M Moscow Masuku M 6.02 L Phineas Sithole M Phineas Sithole M 5.37 T Johnson Mathake M Johnson Mathake M 3.78 V Timothy Mambazo M Timothy Mambazo M 4.9 M Goitsemang Pelotona F Goitsemang Pelotona F 7.31 A Kgositsile Boikhutso M Kgositsile Boikhutso M 9.01 B Bohutsanyana Modimo M Bohutsanyana Modimo M 5.53 J Refilwe Monageng M Refilwe Monageng M 4.88 K Thabang Raperekisi M Thabang Raperekisi M 7.25 SO Kleinbooi Sibanda M Kleinbooi Sibanda M 6.16 Y Kedibonye Motsamai M Kedibonye Motsamai M 3.79 Z Jorosi Mdluli M Jorosi Mdluli M 5.05 P Kereng Maphala M Kereng Maphala M 8.53 Q Jabulani Stimela M Jabulani Stimela M 9.09 RN Mosimane Phuti M Mosimane Phuti M 3.06 D Themba Shabangu M Themba Shabangu M 5.43 C John Dlamini M John Dlamini M 7.42 IH Freddy Molapisi M Freddy Molapisi M 1.94 H Tirelo Sontaga M Tirelo Sontaga M 7.05 CG Maria Thulare F Maria Thulare F 2.99 AW Nakedi Sebolelo F Nakedi Sebolelo F 0.71 UQ Paul Basimane M Paul Basimane M 0.70 I Mqeda Nkathazo M Mqeda Nkathazo M 6.38 W Kabelo Mabalane F Kabelo Mabalane F 2.79 TP Rapelang Ramushu M Rapelang Ramushu M 4.87 X Nkele Simelane M Nkele Simelane M 6.95 U Mmegi Ntoane M Reneilwe Mofokeng M 4.59 O Lethlohonolo Thupane F Lethlohonolo Thupane F 6.49 R Pinkie Dube F Pinkie Dube F 5.57 S Serobe Molapo M Serobe Molapo M 6.06 E Petros Mphuchane M Petros Mphuchane M 13.7 G Kgabo Letsatsi M Kgabo Letsatsi M 2.70 MI Hereford Farmers’ N/a Hereford Farmers’ n/a 2.79 Association Association

Table 3: Distribution of smallholdings by gender and age, 2004 Age group Male % Female % Total % 40–49 8 24.2 2 6.1 10 30.3 50–59 7 21.2 3 9.1 10 30.3 60 and above 12 36.4 1 3 13 39.4 Total 27 81.8 6 18.2 33 100

24 Chapter 3: Hereford Irrigation Scheme

Figure 5: Percentage frequency of distribution of smallholdings by age and gender, 2004

60 and above

50–59

40–49 Age group

0 10 20 30 40

Female Percentage frequency Male

The farmers have formally recognised when they can cope with and recover from usufruct rights to the land through three-year stresses and shocks, maintain or enhance lease agreements signed in 1997 by the NDA. their capabilities and assets, and provide These lapsed in 2000 and have been renewed net benefits to other livelihoods locally on an annual basis with the NDPW. Many of and more widely both at present and in the the farmers are not clear regarding the exact future, without undermining the natural status of their land rights, and responses resource base (Carswell 1997; Hussein on the nature of tenure range from ‘partial & Nelson 1998). A deficit or poverty in all ownership’, ‘almost mine’, ‘not yet mine’ to or some of the livelihood capitals therefore ‘leased from government’ (12%). It is also restricts a farmer’s capacity to optimise evident that the farmers are confused about available opportunities and resilience against who is responsible for receiving the land vulnerability-inducing factors. Resource-poor rentals. While there is general anticipation farmers are therefore those for whom a deficit among the farmers that they will be granted or poverty in livelihood capitals detracts from ownership rights, the farmers’ uncertainty the sustainability of their livelihoods. This and distress is evident in statements such as: section outlines the characteristics of the We do not know what is going on. farmers’ households in terms of household The leases lapsed and have not been composition, livelihood capitals and extended. No-one is talking to us about strategies. where we stand. We have a problem.15 Household composition The Hereford small-scale irrigation farmers’ Socio-economic profile households consist of people who speak Emerging black small-scale farmers such various languages, primarily Sepedi (73%), as those in the Hereford Irrigation Scheme isiZulu (15%), Setswana (6%), SiSwati (3%) are often described as ‘resource-poor and Sindebele (3%). Despite this diversity of farmers’. From a sustainable livelihoods languages, there seems to be a strong degree perspective, this can be interpreted as of social coherence amongst the irrigation relating to a deficit in all or some of the farmers. While the observed coherence five livelihood capitals. These include might seem to indicate that the farmers have the physical, natural, economic, social gradually developed into a community, there and human resources required for living. are problems with attempting to delimit Livelihoods are considered sustainable the boundaries of the group and establish

25 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District the precise total population. In attempting more other households elsewhere. Others to profile the population of the Hereford appear to be more consistently present within Irrigation Scheme, there are difficulties the household, although dividing their time with using the concepts of ‘community’ and between the homestead on the scheme and ‘household’ for a number of reasons. that in Motetema or Tafelkop. In a number of The first is the phenomenon of instances, farm workers are virtually part of ‘straddling’, whereby the farmers’ households the households, sharing food from the same have retained the use of homestead sites in pot and, in some cases, also sharing the same either Tafelkop or Motetema after occupying house. the small-holdings within the Hereford However, the transient nature of Irrigation Scheme (Box 2). The reason employment for many of the farm workers for dual occupation of homesteads is to poses difficulties regarding whether or not to optimise the available livelihood generation include these in the definition of households. opportunities in the Hereford Irrigation Consequently, the study adopts the view of Scheme while simultaneously gaining access the household as defined by the respondents to social services in Tafelkop and Motetema. themselves. Mostly, these definitions These services are absent within the irrigation exclude farm workers from perceptions of scheme area. The general trend is that many households and include nuclear and extended of the married women divide their time family members whose primary base is between working on the scheme and caring viewed as being within the particular family for children and elderly relatives in Tafelkop group, whether or not these relatives reside and Motetema. The more consistent presence in the scheme or in Tafelkop, Motetema of women on the scheme is often associated or elsewhere. Married children are not with polygamous households (6.1%), in considered part of the households, while which one wife – often the younger – resides unmarried adult children often are. Further and works in the scheme while the other research will seek greater clarity on the socio- – often the older – resides in Tafelkop or economic position of farm workers. Motetema caring for younger children The population of adults (over 18 and elderly relatives. The more consistent years) in the surveyed households is 55% presence of women in the scheme is also male and 45% female. This excludes farm associated with elderly women with grown up workers of whom many are casually or children (42.4%) and with women who either seasonally employed. Despite the higher male hold land rights in their own right or who are population, and in spite of the tendency of the main breadwinners in their households many women to divide their time between (18.2%). Owing to the observed straddling, Hereford and Tafelkop or Motetema, women therefore, the definition of a household as ‘a are more visible than men in the day-to- group of people who share the same cooking day work in the fields and gardens. This pot’, often used by Stats SA, is not easily contrasts with the predominance of men in applicable. the allocation of smallholdings. The complexity of social relationships as well as the interwoven links with the broader Crop production TFA compounds the difficulty of defining The main commercial crops grown in the a ‘household’ and a ‘community’ in the Hereford Irrigation Scheme were tobacco context of the Hereford Irrigation Scheme. and vegetables (Figure 6). These were grown There is no clear-cut distinction between within joint ventures between the farmers the nuclear and extended family living and private investors (see Chapters 4 and 5 of both within and outside of a homestead. this report). Two of the farmers also grew Some ‘household’ members move in and cotton. Subsistence crops included maize and out of the homesteads for various reasons wheat. Most of the farmers (94%) grew crops at different times, while continuing to view primarily for commercial use and set aside a themselves as belonging to the particular small proportion of their produce, particularly household on the scheme as well as one or vegetables, for subsistence. At the time of

26 Chapter 3: Hereford Irrigation Scheme the questionnaire survey in May 2004, lack Employment of infrastructure to access irrigation water Most of the respondents (66.25%) – and on plots 30, 31, 32 and 33 limited four of the slightly more women (33.75%) than men farmers (12.5%) to producing fewer crops (32.5%) – consider themselves self- primarily for subsistence, although small employed, mostly within the Hereford quantities of surplus produce were sold. Irrigation Scheme (Table 4; Figure 7). These farmers have since obtained access to More men than women have full-time, paid water as a result of the construction of a canal employment outside the scheme. This partly linking them to the rehabilitated storage dam explains the observed greater visibility of on the scheme. They have now commenced women engaged in day-to-day work on the crop production primarily for commercial scheme. Some (12.5%) of the resident adult purposes. household population are unemployed, while

Box 2: On ‘straddling’ by irrigation farmers’ households…

• Kabelo Mabalane (a widowed female pensioner farmer, 63 years old and the smallholder on Plot W): ‘My children, five adult unmarried girls and one adult son, and nine grandchildren remained in the Tafelkop home. I support them as they are all unemployed. They do get child support grants of R140 per child, but this can only buy soap and a few other things – the bulk of the support is from me.’ • Pinkie Dube (a married female farmer 60 years old and the smallholder on Plot R): ‘My nine children, four boys and five girls, remained in Tafelkop. Two are married and two are working. The five younger children are still staying at home in Tafelkop and attending school.’ • Phineas Sithole (a 67-year-old male farmer with two wives – Maina (47) and Mercy (63) – is a smallholder on Plot ): ‘I have five children, three of who live at home in Tafelkop. The first born is married and the second born passed away recently, as did my second wife. Maina was the third wife. Maina manages the farming and works on the crops on a day-to-day basis, with the help of two hired hands. My first wife, Mercy, lives at home in Tafelkop and looks after my elderly mother and the children... Hereford is where we work, Tafelkop is home.’ • Maina: ‘I do most of the work on the plot. With the income and food we produce here, we support the family in Tafelkop. … I have no children of my own.’ • Tryphine Masuku (52 years old, farmer and the wife of Moscow Masuku – a smallholder on Plot N who is fully employed at a furniture store in Groblersdal): We have one girl child aged 23 who lives in Pretoria, looking for a job. No-one is staying at home in Motetema. On weekends, when my husband is available to supervise work on the plot, I go to Motetema to check if everything is alright. The problem with having two homesteads is the cost of commuting. One cannot commute daily due to financial constraints. Commuting takes money away from investment in crop production.’ • Freddy Molapisi (male pensioner farmer aged 75 and smallholder on Plot IH): ‘We all move up and down … My wife and I have three children and three grandchildren. She mostly lives with them in Motetema. They are not working, so we support the whole household with both our pensions and the income from this plot…’ • Refilwe Monageng (male farmer of 62 years and smallholder on Plot J): ‘Having two homesteads is not easy. We virtually live in Hereford, while two of our children live in Tafelkop, mostly with my wife (Johanna), and attend school there.’

27 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Figure 6: Crop production, 2004

Cotton

Tobacco

Maize

Type of crop Fruit Commercial Subsistence Vegetables

Grain (wheat or sorghum)

0 5 10 15 20 Number of farmers

Table 4: Employment status of resident household members aged 18 years and above, 2004 Male Female Total no. % no. % no. % Unemployed (no paid employment) 5 6.25 5 6.25 10 12.50 Self-employed 26 32.50 27 33.75 53 66.25 Fully employed, with wage/salary 7 8.75 2 2.50 9 11.25 Casually employed 1 1.25 0 0 1 1.25 Other (e.g. students) 5 6.25 2 2.50 7 8.75 Total 4455364580100

Figure 7: Percentage frequency of adult members of households by status of employment, 2004 40 35 30 25 20 Male 15 Female 10 Percentage frequency Percentage 5 0

Unemployed Self-employed Fully employed, with wage/salary Casually employed Other (e.g. students) (no paid employment) Employment status

28 Chapter 3: Hereford Irrigation Scheme

Box 3: On employment in the nearby town of Groblersdal…

Elsie Maphala is a 30 year-old woman who resides on Plot P. The plot is allocated to her father, Kereng Maphala (76 years old). Elsie is the eldest daughter of the family, and has two children, aged seven and two, who live in the Tafelkop home with her mother. Elsie works in the informal sector in Groblersdal. I work for a woman who sells pap and meat at the ‘bus rank’ [bus station] in Groblersdal. She does not pay me any money, but whenever I need food and soap for my two children, she helps me. Selling food at the bus rank is not easy. We make between R100 and R200 per day at the month-end. On a good day during the month, we make between R40 and R50. However, in the middle of the month, we sometimes get only R14 per day, which is the price of one plate of pap and meat. We then have to carry the rest of the food back home to eat.

a small number (1.25%) is casually employed. dwelling structures and other buildings. The The presence of unemployed members of rationale is that the household livelihood households within the scheme indicates that generation strategies in both locations are the decision to engage in farming activities is interlinked, with farming activities on the not universal within farmers’ households. For Hereford Irrigation Scheme considered as some adult household members, living at the an extension of antecedent opportunities in Hereford Irrigation Scheme is advantageous Tafelkop, Motetema and elsewhere. Figure in terms of proximity to employment 8 shows the ownership of selected material opportunities in the town of Groblersdal, resources. located between 0.5 and 2km from the scheme Although the small-scale farmers are (Box 3). The scheme is therefore seen by some considered to be resource poor, ownership as a vantage-point for accessing employment of productive resources varies among the in the urban centre. households, with some households having a greater concentration of material resources Income than others. While a significant proportion The questionnaire survey revealed that mean (57%) of households do not own any gas, monthly household incomes range from zero electric, coal or primus stoves and rely to R4 000. However, follow-up in-depth on wood fuel for cooking, some (15.2%) interviews suggest that respondents are either own two types of stove. The latter group afraid or reluctant to disclose their incomes, (those owning stoves) also own sewing and consequently tend to exclude certain social machines (60%), tractors (60%), produce grants, payments in kind and remittances. tobacco (60%), and have debts (80%) mostly Respondents also exclude consumed between R5 000 and R10 000. Household subsistence produce from perceptions of communication resources mainly include income, partly because they do not keep cellphones (54.5%) and radios (54.5%). One records of such consumption. There is thus household owned a television set, yet none a need for further research on household had a telephone connection. A significant incomes in the Hereford Irrigation Scheme. proportion of households (61%) own One interesting observation, however, is that vehicles, mostly ‘bakkies’ (small trucks) that the households that displayed the greatest are used to transport produce to markets. A anxiety over incomes were those that were number of households (30.3%) own tractors, involved in the tobacco joint venture. many of which were purchased with loans from the Land Bank. None own donkeys or Household material resources horses for draught power, and 30.3% own Household material resources include assets in cattle. both the Hereford and Tafelkop or Motetema Of the total of 27 head of cattle owned homesteads of each household, other than by these households, a single household

29 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District owns 51.9%. A total of 25 goats are owned to residents of the scheme, and the money by two households, one of which owns generated from this contributes towards the 80% of the goats. Most (83.3%) of the 48 purchase of a miscellaneous range of day- sheep distributed among four households to-day requirements for that household. belong to one household. Pigs (27) are For another household that occupies one of owned by five households, two of which the smallest plots (1.94ha) on the scheme, almost equally share 77% of the total pig livestock farming takes precedence over crop population. Chickens (97) are by far the most farming, and sheep, pigs and poultry are widely distributed, with household chicken concentrated on the plot of land and given ownership at 33.3%. One of the chicken- stock-feed, while vegetables are intensively owning households has a share of 20.6% of grown in a garden of under 1ha (see Box 4). the chickens counted. Although ownership There does not seem to be a significant of livestock tends to be concentrated within difference in household material resource particular households, only one household ownership between the Hereford farmers and owns a relatively large number of more than other people living in Greater Sekhukhune’s one type of livestock. communal areas. However, if we compare Although rates of livestock ownership are the asset ownership of Hereford farmers with generally low, livestock contribute to food that of rural households in the whole district security and income for livestock-owning (Stats SA 2002), Hereford farmers appear to households. In one of the households, a single have made greater investments in farming dairy cow provides milk for consumption by assets than the average Greater Sekhukhune the household members as well as for sale household. Hereford farmers also appear to

Box 4: Example of livestock contributions to household income… Freddy Molapisi is a 75-year-old male, married plot holder residing on Plot IH. He was born in Bushbuckridge. He worked as a religious minister in Lydenburg, Burgersfort, Groblersdal and Hammanskraal before retiring and settling in Motetema in 1994. His wife and he support three unemployed adult children and three grandchildren.

Molapisi rears 40 sheep, ten pigs and eight chickens on his 1.94ha plot. He also grows vegetables, mainly for household consumption, in a garden of less than 1ha. The household income derives from the couple’s combined monthly pension of R1 480 and the sale and consumption of livestock and surplus vegetables. Molapisi sells between three and four sheep per month at R500 to R550 each, earning a monthly income of between R1 500 and R2 200. In one month, he sold four pigs at R2 000 each, thus earning R8 000. Chickens are reserved for household consumption, and Molapisi’s wife controls their use and decides when to slaughter them. While Molapisi controls the larger livestock, which bring in cash income, the couple share the task of tending for all livestock. The Molapisis employ two workers and pay them a monthly salary of R550 as well as mealie-meal, a share of food crops and additional money after the sale of produce. Livestock makes a significant contribution to household income and food security and also contributes to the incomes and food security of the farm workers employed by Molapisi.

From an initial flock of five sheep in 1998, Molapisi now has an average of 40 sheep at any given time. For him, the Hereford Irrigation Scheme is ideal for intensive livestock rearing in that water and fodder (in the form of scrap vegetables from local commercial farmers) are abundant. In 2001, he obtained a loan of R10 000 from the Land Bank to grow vegetables. He has since settled this loan and decided to scale down vegetable production in favour of livestock rearing. His decision was based on the recognition that his plot is too small, the water is too limited and the risks are too great to sustain commercial vegetable production.

30 Chapter 3: Hereford Irrigation Scheme

Figure 8: Material asset ownership by households, 2004

Ducks/geese Chicken Pigs Donkeys Horses Goats Sheep Cattle Tractors Sewing Machine Vehicle Assets Cellphone Telephone Microwave Gas Stove Primus Stove Electric Stove Coal Stove TV Radio Fridge PercentagePercentage Frequency Frequency 020406080 PercentagePercentage Frequency Frequency of Households of Households Owning Assest Owning Assets have greater food security and opportunities primary source of collective debt for to generate livelihoods through farming. Hereford farmers. Although the Mpumalanga A major threat to the farmers’ material Provincial Department of Agriculture has resources, livelihoods and well-being are the settled the 2003 water account, farmers debts associated with the risk of producing have continued to appeal to government capital-intensive crops. for assistance with the settling of water- Debts related costs. The Hereford farmers are likely to benefit from a state subsidy, worth At the time of the survey, the majority (71%) a projected R2.2 million, under the DWAF of households had debts ranging from R120 to between R10 000 and R50 000, with some Policy on the Financial Assistance to households (33.3%) having between two Resource Poor Irrigation Farmers. This will and four sources of debt. The larger debts ensure that water prices are kept constant (41.9%) were incurred mainly in order to despite improvements of agricultural finance the acquisition of commercially infrastructure, thereby ensuring that small- productive assets, such as tractors (owned scale farmers have continued access to water by 30.3% of the households). Other debts and do not incur large water-related debts. were incurred in order to pay school fees Grants and subsidies might cushion (16.1%), buy food (9.7%) and set up business farmers against the negative effects of debt. (9.7%). Households involved in a tobacco However, such assistance is unlikely to be joint venture (57.6%) showed the greatest sustained in the longer term. It appears that concern over debts (see Chapter 4). For these the production of capital-intensive crops households, ‘debts’ ranged from R6 449.80 within joint venture contracts creates debts to R22 328.82. The debts relate to a deficit that threaten the assets and livelihoods in the repayment of direct production costs, of small-scale farmers. This threat is and were not linked to costs of renovating compounded, in the longer term, by the the dilapidated cottages, as some respondents requirement for users to pay for water at its among the small-scale farmers assumed. economic value, which will become effective The latter cost is funded through a social after the government subsidy for resource- responsibility donation by British American poor irrigation farmers ceases. This might Tobacco (BAT–South Africa). pressurise small-scale farmers to produce Water account arrears, which amounted high value crops using water-efficient to R281 165.00 in 2003, constitute the methods in an attempt to offset water prices

31 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District and bank loans, or else to trade away their in 1997 has since broken down. The Hereford water allocations. An important question Irrigation Board has recently constructed is: What are the possibilities of promoting sluice gates and storage tanks to provide a viable group of small-scale black farmers, domestic water to the small-scale farmers who may or may not be integrated into the until a more acceptable and permanent mainstream commercial production economy, solution can be found. The threat of water- without incurring the risks of debts? borne disease is a common concern for all the households, and farmers have yet to submit Vulnerability an application for the supply of potable water In the view of the small-scale farmers to the Greater Groblersdal local municipality. vulnerability on the Hereford Irrigation Natural disasters such as floods, drought, Scheme is mainly associated with lack of frost and strong winds are viewed by clean water to drink (100%), natural disasters a significant proportion (87.9%) of farmers such as floods, drought, frost and strong as contributing to vulnerability. The floods winds (87.9%), loss of possessions and theft alluded to mainly relate to the flooding of the (36.4%), serious accidents (12.1%), serious Olifants River and its vicinity in 2000. This illness in the household (21.2%) and violence resulted in damage to crops and infrastructure in the community (3%). and left farmers in the area feeling insecure. The shortage of clean drinking water is Feelings of vulnerability regarding droughts perceived by all the respondents as a major are mainly a consequence of the low rainfall constraint to wellbeing in the Hereford over recent years. Frosts and strong winds Irrigation Scheme. Although the Groblersdal are less common, but nonetheless impact Water Purification Works are situated a negatively, particularly on the vegetable stone’s throw away across the R33 Stoffberg crops produced. road on the northern boundary of the scheme, Crime is mainly associated with theft of the irrigation farmers use raw irrigation possessions. More than a third of households water diverted from the Hereford Canal have been exposed to such crime. Some for drinking and other domestic purposes. women expressed their anxiety about having A water purification plant that was installed to commute between the irrigation scheme

Figure 9: Frequency of disclosed illness in Hereford Irrigation Scheme households

20

18

16

14

12

10

8 Frequency

6

4

2

0 TB BP ARD STDs Other Stroke Cancer Asthma Measles Epilepsy Diabetes Cold/Flu Diarrhoea HIV/AIDS Bad Cough Bone Disease Heart Disease Illness

32 Chapter 3: Hereford Irrigation Scheme

and homesteads in Tafelkop and Motetema, water storage dam on the scheme in 2003 at since absence from either homestead a cost of R7 million, the bentonite lining of leaves property exposed to theft. Straddling the earth bed has developed cracks which has therefore creates difficulties in securing resulted in increased rates of seepage. Repairs household material assets. to the dam are under way. Serious illness is present in approximately A greater portion of water loss, however, a fifth of the households. Disclosed illnesses is from the unlined section of the Hereford include bad coughs, colds and flu, heart Canal. The canal begins at the Loskop Dam disease, high blood pressure, diabetes, asthma on the upper reaches of the Olifants River and and diarrhoeal diseases (Figure 9). HIV/Aids stretches for 44km before discharging water is not reported in any of the households, back into the river. The upper 17km of the although there is universal awareness of the canal are unlined, while the lower 27km are prevalence of HIV/Aids and the way in which lined with concrete. The Hereford Irrigation it is contracted. Ailing household members Scheme is situated below the unlined section mostly reside in homesteads in Tafelkop and of the canal. Prior to the recent concrete Motetema. lining of the lower 27km of the canal, Fear of violence in the community affects seepage rates were high and the estimated only one of the 33 households on the scheme. water loss was 60%. The persisting water The issue seems to be a sensitive one as loss of 30%, reported by key respondents the respondent was reluctant to discuss during in-depth interviews, is largely due to the details. There is evidently less fear of excessive seepage in the unlined 17km of violence now than during the earlier phases the canal. Ground-truthing revealed fields of occupation, when tensions between black and access roads that had been inundated and white farmers were high. by water from the canal There were also massive stands of Queen of the night (Cereus jamacaru DC), a declared invasive plant Shortage of irrigation water species, growing along parts of the unlined Shortage of irrigation water is a major canal. constraint to crop production. The small- Although water loss affects most of scale farmers irrigate their crops for a limited the farmers along the Hereford Canal, time, three days per week, taking turns to particularly those below the unlined access their share of available water. Water section, small-scale irrigation farmers on use is monitored by one of the farmers, who the Hereford Irrigation Scheme appear to also acts as a pump attendant. The crops are be more vulnerable than established white sometimes subject to water stress, which farmers. The latter have larger landholdings impacts negatively on the quantity and and therefore greater water allocations. They quality of produce. often have combined access to between two Of the 192.2ha in the scheme, the and five sources of irrigation water, including Hereford Irrigation Board allocates water the Hereford Canal, the Olifants River, sufficient to irrigate 160ha (or 83.2%) of the the Loskop Canal and the Moses River. area. This allocation is according to the terms Consequently, they have greater leeway of a water allocation system that applies to to manipulate and concentrate their water all farms under the Board’s management, allocations to smaller parcels of land so as to whereby all farmers along the Hereford irrigate their crops more effectively. Canal were allocated 7 200 cubic metres/ The reasons for the farmers’ vulnerability ha/year, which covers the requirements of are two-fold. Viewed in the context of joint 80% of each hectare on a farm. However, at ventures, the water shortage resulting from the time of this study, less than half of the losses from the Hereford Canal poses a threat 160ha was actually under irrigation. The to efficient crop production and, therefore, shortage of irrigation water is largely due to livelihood sustainability. Given the basis of inadequate irrigation infrastructure. Although joint ventures on legal contracts, failure by the Provincial Department of Agriculture the farmers to satisfy the requirements of the and Land Administration rehabilitated the contracts could result in loss of possessions

33 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District and the undermining of livelihoods. Viewed to the relevant water governing bodies. They in terms of the water sector’s ‘user-pays’ have also demanded direct representation principle, the costs of lining the lower section on the canal-wide Hereford Irrigation Board of the canal could push up the cost of water as a means of mitigating decisions that beyond the reach of the small-scale farmers. might render their livelihoods vulnerable. These farmers already experience difficulty This development is complemented by affording the current tariff of R802/ha/year.16 improvements in the institutional framework According to the water bailiff of the Hereford for promoting access to water by emerging Irrigation Board, the current tariff of R720/ black farmers. ha/year [note the discrepancy] could rise by an additional R750/ha/year. Farmer organisation One intervention that could reduce According to the chairperson of the Hereford the threat of higher water prices to small- Farmers’ Association, the small-scale scale farmers’ livelihoods is the Policy irrigation farmers derive their organisational on Financial Assistance to Resource Poor identity from the Tafelkop Farmers’ Irrigation Farmers, adopted by DWAF in Association (TFA). This organisation September 2004. In an effort to resolve the was established on 10 February 1994 in water loss problem, both black and white the Sekhukhune area by a group of black farmers have reached consensus on the farmers from disadvantaged communities. need for emerging small-scale farmers, who The objectives of the organisation are use 4.7% of the total water allocation to to enable landless black farmers from the Hereford Irrigation Board, to apply for neighbouring communities to gain access assistance from government to cover part of to land, use the land for business purposes, the R12 million required to cover the costs of create jobs and contribute towards social and lining the upper section of the canal. economic growth in the region. The TFA Between August and September 2004, has grown into an 800-member organisation the Hereford Irrigation Board and the small- that transcends four provinces, namely: scale irrigation farmers lodged applications Mpumalanga, Limpopo, the Northwest and for government financial assistance to cover Gauteng.17 Membership includes men, women the costs of lining the Hereford Canal. An and youth. The organisation’s national estimated subsidy of R2.2 million is required office is currently based at the Hereford by black small-scale farmers, in terms of the Irrigation Scheme, where the chairperson of Policy on Financial Assistance to Resource the Hereford Farmers’ Association is also Poor Irrigation Farmers. This amount the chairperson of the Tafelkop Farmers’ has yet to be approved by DWAF. The Association. The TFA is a constituent of the recently formed Mpumalanga Co-ordination National African Farmers’ Union (NAFU). Committee for Agricultural Water (CCAW), The term ‘Hereford Farmers’ Association’ which is the relevant structure responsible is used formally to distinguish the 33 small- for cases pertaining to agricultural water use, scale irrigation farmers from the rest of the has requested written confirmation from the TFA. The Hereford Farmers’ Association is Department of Public Works that the lease also closely linked to the Bakgaga ba Kopa agreements with black small-scale farmers Co-operative, an organisation for black will not be terminated. farmers in the Sekhukhune area. Emerging farmers in Hereford have now Internally, the Hereford Farmers’ begun to be more proactive in relation to Association is organised into the following water access issues. During the early years of structures: occupation the farmers resorted to traditional • a management committee means to gain access to more water, and they • the Hereford Vegetable Growers’ called upon the assistance of a traditional Association (HVGA) which is registered healer to help them to pray for rainfall. Now, as a co-operative however, the farmers direct their requests for • the Hereford Tobacco Growers’ access to both irrigation and domestic water Association

34 Chapter 3: Hereford Irrigation Scheme

• the Hereford Women’s Project Association have formally expressed their • the Hereford Youth Project. dissatisfaction with being represented by The Management Committee for the a Department of Agriculture official on Hereford Farmers’ Association also serves the Hereford Irrigation Board and have as the Management Committee for the TFA demanded direct representation by one of and the Bakgaga ba Kopa Co-operative. The their own members. committee consists of five executive and five This research was able to establish that ordinary members. The Women’s and Youth a key underlying principle of the Hereford Projects are described as ‘struggling’ due Farmers’ Association is to actively involve to lack or inconsistency of funding. Of the women and youth in commercial farming structures above, the HVGA and the Hereford activities. The executive committee is elected Tobacco Farmers’ Association are the most by simple majority of all members in good closely linked to joint ventures in the scheme. standing at an Annual General Meeting. Another structure identified by Funding is obtained through contributions a respondent from the local office of the of annual membership fees. Although this Provincial Department of Agriculture is the research involved collecting some data on Hereford Irrigation Committee. However, the governance principles of the Hereford the chairperson of the Hereford Farmers’ Farmers’ Association, further research is Association denies the existence of this necessary in order to establish whether these structure. According to him, a proposal to principles have been formally adopted as form this structure was put to the Hereford well as the manner in which they have been Farmers’ Association and they had decided articulated.18 against it. Emerging farmers have been asked Preliminary indications are that there are to form an irrigation committee consisting a few farmers who are dissatisfied with the of members of the Hereford Farmers’ power dynamics within the organisation, with Association and represented in the Hereford concerns voiced over what is perceived to Irrigation Board by one of their members. be a unilateral style of leadership that leaves Drawing from their past experiences with the very little space for individual voices to be Hereford Irrigation Board, which consists heard within the group. There seem to be almost entirely of white commercial farmers fears over voicing dissent, as well as fears along the Hereford Canal, they perceive that the leadership might know that some such an irrigation committee as furthering within the executive have taken initiative in the white farmers’ intention to avoid communicating directly with the researcher. transforming the Board, in contravention of Thus further research will seek greater clarity the requirements of the National Water Act of on the power dynamics within the Hereford 1998. The Hereford Farmers’ Association’s Farmers’ Association. contention is that a structure such as the Irrigation Committee will eventually become a Rehabilitation and water user association (WUA), which means that black farmers will be formally excluded ‘revitalisation’ of the Hereford from the Hereford Irrigation Board. Irrigation Scheme Members of the Hereford Farmers’ Since the formalisation of the black small- Association contrast this exclusion with the scale farmers’ occupation of the Hereford inclusion in the Board of white small-scale Irrigation Scheme in 1997, a number of farmers who previously occupied the same institutions have contributed funding towards portions of farm 53JS Loskop South. While rehabilitating the infrastructure and services the conditions of inclusion of the latter are on the scheme. Table 5 provides a summary not clear, it is evident that black farmers of the direct financial assistance given have little trust in both the white members by identified sources. Although there is of the Irrigation Board and local officials in significant expenditure on social needs, the the water and agriculture sectors. Since May biggest financial investments are related to 2004, the executive of the Hereford Farmers’ water supply (for example, R7 million for

35 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District the dam) and crop production (for example, within the Hereford area the post-settlement grant of R550 000 for the • Africare (Rural Enterprise and construction of a vegetable pack house). Agribusiness Programme) Hereford small-scale farmers are evidently • Sekhukhune Farmers’ Development Trust unable to pay for water at the present tariff (SFDT) and production income levels, as shown by • Greater Sekhukhune District settlement by the Mpumalanga Department Municipality of Agriculture of their outstanding water • Greater Groblersdal Local Municipality account of R281 165. The envisaged subsidy (LED Committee on Agriculture) of R2.2 million towards lining the upper • Mpumalanga Co-ordinating Committee reaches of the Hereford Canal is envisaged on Agricultural Water to substantially contribute to keeping the cost • Hereford Irrigation Board of water affordable for emerging farmers. It • ESKOM Development Foundation has yet to be seen whether the government • British American Tobacco (BAT), subsidy, and joint ventures in particular, Tobacco RSA, Golden Leaf Ltd and will result in emerging farmers becoming Limpopo Tobacco Processors Pty Ltd financially self-sustaining enough to afford (ex-MKTV): tobacco joint venture with the cost of water. Hereford Tobacco Growers At the same time as efforts to rehabilitate • Nature Choice Farms/ NFM Marketing the scheme, a number of activities have Pty Ltd: vegetable joint venture aimed to ‘revitalise’ production in the with Hereford Vegetable Growers’ Hereford Irrigation Scheme. As individuals, Association (HVGA) smaller groups and collectively, the small- • Limpopo Tomato Growers’ Association scale farmers have developed complex (information sharing) linkages with other institutions and • university researchers institutional actors (Figure 10). Some of the • other local and international donor key institutions are involved in joint ventures. organisations. Linkages are with the following: There have been several joint ventures • individual white commercial farmers since the occupation of the scheme by

Table 5: Key funding towards rehabilitating the scheme Year Purpose Source of funding Amount (R) 2000 Surveying and sub-division of plots Mpumalanga Department of 60 469.56 in sections 236 to 239 of 53JS Agriculture Loskop Farm South _ 2000 Construction of a canal to link Mpumalanga Department of +/ 1 500.00 plots 29, 30, 31 & 32 to water Agriculture storage dam 2000 Drilling of boreholes for domestic Mpumalanga Department of 50 000–75 000 water supply Agriculture 2001 Grant for domestic electricity ESKOM Development 99 724.30 installations and training (no Foundation connections) 2003 Rehabilitation of storage dam Mpumalanga Department of 7 000 000 Agriculture 2003 Settlement of outstanding water Mpumalanga Department of 281 165 account Agriculture 2004 Post-settlement grant towards the Mpumalanga Department of 550 000 construction of a pack house for the Agriculture HVGA

36 Chapter 3: Hereford Irrigation Scheme

Figure 10: Hereford Irrigation Scheme networks

Facilitators: e.g. Joint venture partners: Yukon International, AFRICARE Swallow International, MKTV, Tobacco RSA, Nature Choice Farms SFDT Deltapine, Tiger Foods, Outspan Some established local commercial farmers Seed companies: CottonSA, Monsanto, SAGL Subsidy to Rehabilitation Commercialisation Markets e.g. CottonSA, resource-poor Co-ordination: NTK, Limpopo Tobacco farmers Processors Ltd, local L CCAW Agriculture informal markets Water Water Affairs ARC Leasing allocation and Forestry Public Works Redistribution and supply Hereford HerefordHereford Irrigation Irrigation Board SIS Land Affairs State land transfer Local Authorities Land Bank Credit facilities Integration & co-ordination Lobby Groups ESKOM LEDLED Committee Committee for for Agriculture Research networks e.g. UP, UP, PLAAS PLAAS AgricultureCBOs, e.g.: traditional Electricity supply leadership, taxi association, Analysis ANC Youth League black farmers in 1997, most notable of What counts in the black farmers’ favour which have been those for vegetables and is the increasing strength of the Hereford tobacco production. A number of less formal Farmers’ Association in dealing with external partnerships have also emerged between organisational actors. This is demonstrated individual black farmers and established by the farmers’ pro-active measures to secure commercial farmers in the Hereford area. greater access to water through demanding inclusion and direct representation on the Summary Hereford Irrigation Board and through using Although the emerging small-scale irrigation formal frameworks and structures to obtain farmers in Hereford are classified as being required resources. The implications of this ‘resource poor’, there is some evidence that on the extent to which farmers’ livelihoods they are gradually increasing their livelihood can be secured and enhanced have yet to be resources. Gaining land through a process seen. of occupation and (as yet incomplete) formalisation of tenure, the farmers have Endnotes proceeded to use a variety of strategies to 1 Memorandum of Understanding (MOU) secure their livelihoods. These strategies between the DLA and the Hereford small- are based, in part, on networking with key scale farmers (‘Tafelkop Farmers’ Association role players in government, civil society (TFA)’) on Farmer Settlement on the state- and the private sector. Joint ventures owned Portions 236 to 239 of 53JS Loskop feature prominently among these networks, South Farm, 14 February 1997; Memorandum from the DLA Office in Mpumalanga providing production skills, technology, Province to the Minister of Agriculture and management services and access to credit Land Affairs, 11 May 1997; facilities and markets. The down side of these Farmer’s Weekly, 17 October 1997. joint ventures is an increase in the incidence 2 MOU, 14 February 1997. of debt in farmer households. 3 MOU, 14 February 1997.

37 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

4 Minutes of a Meeting held on 25 September Maloeskop Office (Groblersdal) of the 1997. Provincial DALA, 14 October 2004. 5 Minutes of a Meeting held on 25 September 13 Memorandum from the Mpumalanga DALA 1997. to the NDPW, 25 August 2004. 6 Response by the Minister of Agriculture and 14 Names and plot numbers have been changed Land Affairs to Memorandum from the DLA to protect the identity of persons referred to. office in Mpumalanga Province, 12 July 1997. 15 Interview with the Chairperson of the 7 Letter from the Deputy Director of the Hereford Farmers’ Association, Hereford DLA Northern Highveld Regional Office in Irrigation Scheme, 14 February 2005. Mpumalanga Province to the DLA National 16 Letter from the Chairperson of the Hereford Office, 18 March 1999. Farmers’ Association to the Mpumalanga 8 Letter from the TFA to the Minister of Provincial DALA, 15 September 2004. Agriculture and Land Affairs, 13 May 1999. 17 Interview with the Chairperson of the 9 Letter from the Deputy Director of the Hereford Farmers’ Association, Hereford DLA Northern Highveld Regional Office in Mpumalanga Province to the DLA National Irrigation Scheme, 11 December 2003. Office, 18 March 1999. 18 Governance practices within the Hereford 10 Letter from the Deputy Director of the Farmers’ Association are of interest to this DLA Northern Highveld Regional Office in research. However, in order to gain insights Mpumalanga Province to the DLA National into these practices it is necessary to gain the Office, 18 March 1999. farmers’ trust. This is a lengthy process. These 11 Letter from the Deputy Director of the farmers have a perception that they have been DLA Northern Highveld Regional Office in labelled land ‘invaders’ and that their agency Mpumalanga Province to the DLA National is likened to the politicised and orchestrated Office, 18 March 1999. land occupations in Zimbabwe. Consequently, 12 Interview with the Projects Officer at the they are wary of new researchers.

38 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

Chapter 4: Hereford Tobacco Project – A joint venture in crisis This chapter considers the organisation of, and key role players in the Hereford Tobacco Project, which was initiated in 2001. It considers the impact of the lack of a formal written contract between farmers and private investors in the joint venture. Given the difficulty of establishing exactly what went wrong in the 2004 season, the final section of the chapter documents the views of different stakeholders, as expressed in interviews.

he tobacco joint venture, known to assist with weeding. Provision was made as the Hereford Tobacco Project, within the project for remuneration of such Twas initiated in 2001. The project labour, which involved between two and was aimed at the ‘social and economic five workers, depending on crop hectarage. empowerment of small farmers to become Farmers tended to hire farm labourers independent tobacco farmers within five from outside their households. Although years’.1 The project involved 19 of the 33 the project provided for remuneration at small-scale farmers in the Hereford Scheme minimum wage rates, some farm labourers and a consortium of three private sector appeared to earn less than that. Interviews institutions namely, Tobacco RSA, British with a few plot holders and farm workers American Tobacco (BAT–South Africa) and indicated that the latter’s cash income was SA Gold Leaf (SAGL). supplemented by the food they obtained According to an agreement between the through working on the plots. Such food was farmers and the private investors, each farmer either produced or purchased by plot holders set aside at least 1ha for the growing of and shared with the workers. tobacco. The consortium of private investors There was no written contract between was responsible for all project administration, the farmers and the private investors,2 including provision of production inputs only a ‘nominal’ contract’.3 Nevertheless, such as seeds, pesticides and fertiliser, skills all the farmers committed themselves to training, crop harvesting, processing and marketing, and payment of farmers’ labour planting 1ha of tobacco for the joint venture. costs and profits. Employees of Tobacco BAT–South Africa funded the project, RSA carried out the key production activities, SAGL provided management and technical including ploughing, planting, cultivation, expertise, and Tobacco RSA played the application of pesticides and fertiliser, leading role – administering the funds. harvesting, sorting and processing. Farmers Tobacco RSA appears to have replaced a closely watched these activities so as to learn private tobacco growers’ company called the these production skills. In addition, some Magaliesbergse Koöperatiewe Tabakplanters training was offered through workshops and Vereniging (MKTV), which was actively literacy classes. involved in the beginning of the project The farmers’ main responsibilities were but had since filed for bankruptcy and been to irrigate the crop at specified times, and liquidated.

39 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

MKTV had worked with officials from the for BEE Projects – cum-agronomist for Provincial Department of Agriculture in Limpopo Tobacco Processors – could not providing support to the small-scale farmers. give a clear explanation regarding the nature They did so through supplying funds for the of the companies’ relationship. Nor could operation of machinery from the Department the respondents explain the process that had of Agriculture, the camping allowance for led to the dissolution of MKTV and the re- the operators (government officials) and employment of its employees in Tobacco the restoration of the community hall on RSA and Limpopo Tobacco Processors. the scheme. MKTV planned to provide Follow-up interviews with the senior R3 million to cover costs of production, management of the Tobacco Institute renovation of the houses on the scheme, of South Africa (TISA) and Tobacco provision of electricity supply to the RSA helped to clarify the institutional community hall and houses and construction arrangements. It emerged that TISA was the of tobacco sorting rooms, among other umbrella institution for all the role players in costs. As Table 5 in Chapter 3 of this report the 2003–2004 tobacco joint venture with the shows, electricity was supplied by the Eskom Hereford small-scale farmers. The members Development Foundation, although the of TISA included BAT–South Africa, JT houses had yet to be connected. BAT–South International South Africa and Tobacco RSA. Africa provided a donation of approximately Tobacco RSA, in turn, had ten members R3.2 million towards the renovation and namely: SAGL, BAT–South Africa, Limpopo construction of houses (R1 034 823) and Tobacco Processors, Gamtoos Tobacco curing barns (R686 610) and to cover other Co-operative, Swedish Match South Africa capital, direct and indirect production costs of (Leonard Dingler & Best Blend), World Class the joint venture. SAGL provided extension Connection Trading, SA Nicecentury Trading and technical services, and Tobacco RSA CC, Universal Leaf SA, Dimon and Tribac provided the management and administration CC. Within this institutional arrangement, of the joint venture. There seemed to be Limpopo Tobacco Processors was directly a strong link between the future production linked to the erstwhile MKTV through and funding plans expressed by MKTV in having bought the liquidated company the 2001–2002 season and the subsequent and taking over some of the MKTV staff. provision of funding by BAT–South Africa. Because of the overlapping linkages between In the 2003–2004 joint venture, BAT–South TISA and Tobacco RSA, the staff of both Africa, through Tobacco RSA, funded much institutions performed dual functions at the of the activities and expenditure planned by head office level as well as at the local level. MKTV in 2001–2002. Further to explaining the complexity of the The perception of some respondents institutional arrangements, respondents from was that after filing for bankruptcy, MKTV TISA/Tobacco RSA provided information had re-emerged under a different name regarding the problems experienced by the – ‘OBARO’ – and with links to Tobacco tobacco joint venture in 2004. RSA and another company, Limpopo Tobacco Processors. This view seems to A joint venture in crisis have been informed by the re-employment The joint venture experienced a crisis during of MKTV’s employees in Tobacco RSA and the post-harvest period from September to Limpopo Tobacco Processors, for which the October 2004. The promised earnings had joint venture manager was a dual functionary. not only fallen far below expectations, but Moreover, the office of Tobacco RSA was farmers were also said to have incurred large located within the same premises as those ‘debts’. Tensions ran high. The realisation which MKTV had previously occupied, the that earnings from the 2004 tobacco crop difference being that instead of ‘MKTV’, were far below expectations was a primary the signage of the premises had changed to cause for concern among the tobacco growers ‘OBARO’. The respondents interviewed, in the Hereford Irrigation Scheme. The main including the Tobacco RSA Manager reason Tobacco RSA gave for this failure

40 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

was that the tobacco produced by the small- production skills and harvested and marketed scale farmers had been sub-standard (of poor the tobacco on their behalf. The black farmers quality). This was due to a number of factors, participated in all the production work, including low rainfall, late season planting including planting, weeding, application of by Tobacco RSA and the inexperience and, fertilisers and pesticides and irrigation, and according to one Tobacco RSA employee, their tobacco was bought at the same price ‘poor management’ by most farmers. Added as that of the white farmer. In light of this to these constraints, the small-scale farmers’ background, some farmers expressed a view high expectations were viewed by Tobacco that tobacco bought directly from a black RSA as having contributed to deepening their farmer is classified as ‘scrap’ or poor quality anxiety and insecurity. tobacco, while that bought from a white A second source of apprehension was the farmer is viewed as being of higher quality. information communicated to the farmers Others suspected some irregularities in the by representatives of Tobacco RSA that manner in which Nkathazo’s account was the farmers’ performance had resulted in represented. significant ‘debts’ (see Column E of Table 6). In the absence of a written contract for These ‘debts’ were actually deficits resulting the joint venture, and in the context of the from the difference between expenditure in complexity of the institutional arrangements 2004 on direct production costs (Column C) within this joint venture, it is difficult and the repayments towards the production to establish exactly what went wrong in costs (D) from the money received from the 2004 season. The next section of the sales of tobacco (A), less the payments to the report documents the views of different farmers (B). Since the overall cost of the joint stakeholders, as expressed in interviews. venture had been funded through a ‘donation’ of approximately R3.2 million from BAT– South Africa, it is not clear how the deficits Voices from below: Oral could be regarded as debts. According to testimonies of the emerging TISA/Tobacco RSA, the conditions of the farmers ‘nominal’ joint venture agreement had been that expenditure by Tobacco RSA on Refilwe Monageng – Plot J the indirect socio-economic costs, such as Age: 62 renovations to houses, constituted a donation, Sex: male but that farmers were responsible for the Married with two dependent children. direct production costs. Without a written Education: Never went to school, but has contract establishing the exact conditions of since attended adult basic education (ABET) the financial assistance given, the differing classes. Can read and write a bit. views between the farmers and Tobacco RSA were not easy to resolve. Consequently, Monageng has been growing tobacco in the Tobacco RSA decided to write-off the scheme since 1998. He originally came from farmers’ debts. the Middelburg area and arrived in Tafelkop Table 6 shows that one farmer, Mqeda in 1973. He worked in Witbank as a driver Nkathazo, had significantly higher net until he lost his job in 1984. Since then, he receipts and repayments than the others, and has sold vegetables (which he purchased from consequently had relatively lower deficits. commercial farms) and subsequently bought The performance of this farmer is particularly himself a tractor. For three years he produced significant when compared to that of two maize on other people’s disused fields around other farmers whose previous experience Tafelkop. Monageng lacked secure land in tobacco production resulted in profits tenure and access to irrigation water, yet of over R23 000. The two farmers were wanted to grow vegetables commercially. among a group of four who were assisted He was among the original group of black by a white local tobacco producer between farmers that occupied Hereford in 1997. With 1998 and 1999. The white farmer taught them his family, he went through the hardship

41 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Table 6: Farmer accounts Plot ABCD E no. Name* Net Paid to Direct costs Repayments Balance receipts farmer due Phineas Sithole L 9 122.12 3 192.73 23 841.25 (5 929.36) 17 911.89 Goitsemang M 16 922.43 5 992.85 29 360.06 (10 999.59) 18 360.47 Pelotona Kgositsile Boikhutso A 8 383.25 2 934.14 27 179.93 (5 449.10) 21 730.83 Bohutsanyana B 13 739.66 4 808.88 24 826.15 (8 930.78) 15 895.37 Modimo Refilwe Monageng J 7 610.15 2 663.55 23 214.06 (4 946.59) 18 267.47 Thabang Raperekisi K 9 353.32 3 273.66 20 420.78 (6079.66) 14 341.12 Kedibonye Y 13 318.30 4 661.40 27 767.06 (8 656.90) 19 110.16 Motsamai Jorosi Mdluli Z 8 207.36 2 872.58 20 010.42 (5 334.79) 14 675.63 Kereng Maphala P 16 844.77 5 895.67 24 563.51 (10 949.09) 13 614.42 Jabulani Stimela Q 13 742.78 4 809.97 31 261.61 (8 932.79) 22 328.82 John Dlamini C 13 616.44 4 765.75 28 848.44 (8 850.69) 19 997.75 Themba Shabangu D 8 373.27 2 930.65 23 468.01 (5 442.63) 18 025.38 Tirelo Sontaga H 6 775.25 2 371.34 23 078.76 (4 403.93) 18 674.83 Mqeda Nkathazo I 26 474.50 9 266.05 23 658.23 17 208.43) 6 449.80 Michael Somkhosi W 13 772.78 4 820.47 17 437.07 (8 952.29) 8 484.78 Nkele Simelane X 14 488.14 5 070.85 31 691.25 (9 417.30) 22 273.95 Boykie Dube R 7 270.94 2 544.83 22 845.91 (4 726.12) 18 119.79 Serobe Molapo S 5 006.35 1 752.22 17 915.86 (3 254.13) 14 661.73 Petros Mphuchane E 8 247.86 2 886.75 25 145.85 (5 361.10) 19 785.75 TOTAL 221 269.67 77 444.34 466 534.21 (143 825.27) 322 709.94 Source: Tobacco RSA, 2004.

*Names have been changed to protect the identity of persons listed.

Key to terminology used Net receipts: Amount of money received from sale of tobacco produced by the farmer. Paid to farmer: Amount of money paid out to the farmer by Tobacco RSA. Direct costs: Expenditure by Tobacco RSA on production costs (for example, seeds, fertilisers, pesticides) in 2004. Repayments: Amounts deducted from the net receipts received from the sale of tobacco produced, to repay expenditure towards direct production costs.

42 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

of rehabilitating the overgrown plot and provided assistance with five window dilapidated buildings and turning both into frames and panes, nine doors and a productive asset and a home. In 1998–9 he door frames, floors for three rooms earned R23 655.22 from a tobacco production and all painting. My wife and I fixed partnership that he and three other farmers everything else. The problem now is had with local commercial farmer, Joppie that MKTV employees keep saying that Graham. When he joined the MKTV-led I should remove the roofing, and they Hereford Tobacco Project, he therefore will take my metal roofing sheets in had had training in commercial tobacco exchange for their own supply to make production and processing. it simple and uniform to the rest of the On the contention by Tobacco RSA that tobacco growers’ houses. This is my the tobacco was of poor quality: house, and I like it with its heaped roof. Some time early this year, when the I have also refused to accept their offer tobacco was thriving, we had an open of smaller windows. I like the large day on which MKTV representatives windows that I installed – they bring in brought the visitors to my plot to show more light and air…4 them the crop. One visitor asked how much I expected to earn from the crop. Pinkie Dube – Plot R I replied that I did not really know. Age: 60 The visitor then posed the question Sex: Female to the Tobacco RSA [Tobacco RSA/ Married with nine children, five of whom are Limpopo Tobacco Processors] BEE dependants. Projects Manager, who replied that Education: Never went to school, but can the crop should fetch at least R30 000. read and write a bit. However, I was very surprised when after the harvest I was paid a sum of Dube was born in Steelport (presently within just above R2 500. Yesterday afternoon the Greater Tubatse local municipal area). [i.e. the day the researcher interviewed Her family was forcibly removed from the Tobacco RSA BEE Projects Steelport in 1961. She arrived in Tafelkop as a Manager] two employees of MKTV young unmarried woman (18 years old). She came and gave me a little more than worked on the farms until 1969, when she R100 and said that an amount of just married Goodman. above R400 had been deposited into Goodman used to work in Boksburg my bank account. For me, these small (Gauteng) when we got married, but amounts are a far cry from the R30 000 lost his job when we had our sixth that I expected. I am very concerned child. about this. Kgoshi Rammupudu at Tafelkop allocated My concern is also due to that when her a 2ha field where she grew maize. my tobacco was ready for harvesting, Because she had no knowledge of recognised MKTV sent its employees to come and farming methods, she used to get only two harvest my prime tobacco. I was not at bags of maize. Then she met Agricultural home then. They did not weigh it, or if Extension Officer Mr Mahlukwane, who they did, they never informed me how taught her how to plough, plant and apply much was taken or how much money fertiliser. Subsequently her production I had earned. So far, my earnings have increased to between 40–50 or even 80 bags only been from the ‘scrap’ tobacco… of maize. She would then market her produce On assistance with renovations to the house at a co-operative in Tafelkop. occupied by his household: This is how I brought up my children. When MKTV began the renovations, However, there was a problem with I and my wife had already started on water. Our men then tried to find an the renovations and had completed the alternative farming area and identified roof and some windows. MKTV then Hereford, where there was water. We

43 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

then invaded Hereford as a group of Mabalane moved to Tafelkop after forced 33 farmers. The place was run down, removal from Maloeskop (where the local the fields overgrown. We stayed; district office of the Provincial Department persevered and transformed Hereford of Agriculture and Land Administration is into the productive place you see today. presently located). A land claim for this land Moving to Hereford was therefore has been submitted, and the claimants have difficult – not only due to the effort been assured of restitution. Before occupying used to make the place productive the land in the irrigation scheme, Mabalane and habitable – but also due to the practised subsistence farming, growing maize resistance by white farmers. in the land around Tafelkop. Her decision to On the issue of the earnings that fell short of move to Hereford was determined by water expectations: shortages in the Tafelkop area. Asked what I have grown tobacco with MKTV for had driven her, an elderly woman alone, to three years. From 1ha, I got R12 000 venture into commercial farming, she replied: in the first year and R3 000 in the ‘Hunger. And the need to rely on myself, second year. This year (2004), I got which I have done since my husband passed only R500 for three months of my away in 1986’. labour on the 1ha field. In addition, On the issue of debt: I have a debt. I am not sure of the At a meeting in September [2004] with amount I owe MKTV, but the figure is the Tobacco Institute of South Africa over R4 000. The reason given was that and BAT, we were informed that we the quality of tobacco was low. In my owed a lot of money. Initially I was view, the quality of this year’s tobacco told that I owe R20 000 or R22 000 to was better than that of the previous the Tobacco Institute of South Africa. Recently I was told that I also owed years. We have a photograph taken by over R8 000, but I am not clear what Deon Meyer [Tobacco RSA/Limpopo this amount is for. They also said that Tobacco Processors BEE Projects this would be recovered from the next Manager] some time this year showing tobacco crop, but we refused to grow how good our tobacco was. There is tobacco again. We will instead grow no way I can understand how I now sweetcorn and other vegetables [with a owe over R4 000. I spent not more new vegetable joint venture].6 than R2 000 on fertiliser, pesticide, seeds and other inputs. I need to see Phineas Sithole – Plot L the statements. Nothing has been said Age: 67 about tobacco prices falling … In the Sex: Male first and second years, we were told Married with two wives and widowed that we had made losses, but that through the death of one wife. Dependants these had been settled by MKTV. In include three children and elderly mother. the third year, this has not been done. Education: Never went to school but can read Has MKTV shifted previous losses to and write a little. the third year? After all the labour we expended on tobacco, we gain nothing Sithole moved to Tafelkop following but debts! I have decided not to grow forced removal from Braakfontein. tobacco anymore. 5 Before occupying the land in Hereford, he farmed maize and sometimes tomatoes for Kabelo Mabalane – Plot W subsistence. Water shortages prompted his Age: 63 decision to move to Hereford. Difficulties Sex: Female associated with this move were mostly to do Widowed with six adult children and nine with having to clear the fields and make the grandchildren, all dependent. place productive and habitable. Education: Never went to school; cannot read We began growing vegetables like or write. butternut, beetroot, spinach, beans,

44 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

tomatoes and cabbage for sale on resided mostly in Tafelkop, caring for the streets of Groblersdal and to the home and children. Our father supply local traders. Marketing was has been self-employed, mending a problem. The new partnership with fences and repairing tractors … More NFM will assist. They [NFM] have recently, our parents have begun prepared the fields and will produce to anticipate being part of the new sweetcorn; imparting skills to us vegetable production contract between farmers. the 15 members of the Hereford On the issue of losses and debt: Vegetable Growers’ Association We started growing tobacco last year, (HVGA) and NFA.8 using hired labour that was paid [for] by MKTV. Although BAT assisted us Other local voices with the tobacco curing tower and windows for the house, we had to buy Projects Officer our own roofing material. The harvest Mpumalanga Provincial Department of this year shows that we made a loss. Agriculture and Land Administration (Local The reason is not clear. We all have Office) losses. The debts that we are said The tobacco joint venture is having to owe are from renovations to the serious problems. The current crisis houses…7 should be viewed against the way some of the small-scale farmers have done Kereng Maphala – Plot P in previous years. In 1999, before the Age: 76 farmers entered into a joint venture Sex: Male with MKTV, Graham, who owns Married. Dependants include three children a neighbouring commercial farm, and two grandchildren. assisted four of the farmers. These Education: Never went to school; can read were Jabulani, Refilwe, Spencer and a bit. Matthew [Table 7]. Profits were very high. Jabulani got around R23 000 and Maphala’s original home was in Tafelkop. Refilwe R23 600. The others did not Before occupying the land in Hereford, he was self-employed, repairing tractors for do so well. This is what encouraged farmers in the Ramokgwebane area around the other farmers to go into the joint Tafelkop. He had no tractor himself. At the venture with MKTV… time, his wife, Cynthia, was unemployed and I have tried to advise the farmers did not do any farming in Tafelkop. Maphala to grow vegetables that have high moved to Hereford because he felt that profit margins, such as paprika. I have repairing tractors was not enough, and that arranged for meetings with companies farming would generate more money. such as Tygerbrands Vegetable Elsie, (Maphala’s daughter), spoke on his Canners. I have also suggested that behalf: they should plant long-term growing We grew tobacco with MKTV last year crops, such as table grapes, oranges [2003]. We stopped growing tobacco and macadamia on 4 to 5ha of the some time in 2003 when the Land communal plot [Plot MI] and on two Bank repossessed most of our father’s other plots next to it. For table grapes, productive assets, including two for example, the capital required for ploughs and other machines, to settle production in the first year would be a debt that he owed. This discouraged R150 000 per hectare. For the next him from further production. This year four years, the production costs would [2004] we did not grow any crops due be R50 000 per hectare. After this, the to lack of money … We had enough costs would become significantly lower, water. Since the repossession of assets and the fruit would be harvested. The by the Land Bank, our mother has profits could be used by the farmers’

45 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Table 7: Farmer accounts for the 1999 tobacco growing partnership with local commercial farmer Joppie Graham

Producer Production costs (R) Total cost Receipts Profit Mechanisation Chemicals Fertiliser Labour Insurance from sales Refilwe 1 750.00 3 751.35 2 719.08 2 018.91 5 040.00 15 279.34 38 934.56 23 655.22 Monageng Jabulani 2 936.50 4 817.43 3 769.50 2 626.72 6 804.00 20 954.16 43 982.40 23 028.24 Stimela Matthew 2 861.46 4 817.43 3 716.58 2 024.75 6 804.00 20 224.22 22 527.68 2 303.46 Mokolobetsi Spencer 3 045.00 5 349.51 4 032.00 2 183.26 7 560.00 22 169.77 17 368.96 –4 800.81 Mahlathini Total harvest per producer: • Refilwe Monageng: 34 763kg of tobacco harvested from a 2ha field and sold at R1.12/kg • Jabulani Stimela: 39 270kg of tobacco harvested from a 3ha field and sold at R1.12/kg • Matthew Mokolobetsi: 20 114kg of tobacco harvested from a 2.7ha field and sold at R1.12/kg • Spencer Mahlathini: 15 508kg of tobacco harvested from a 3ha field and sold at R1.12/kg

Source: Records of Hereford tobacco production, 1999.

co-operative to buy tractors and other for the longer term, also begin by inputs. Although the initial costs look planting say a hectare of grapes or prohibitive, a R3–4 million LRAD oranges, things might work out better. grant is possible. In addition to this, They could then increase the hectare of there is possible assistance by [white] fruit according to what they can afford. commercial farmers.9 The capital costs of establishing the The insurance costs shown in Table 7 are orchard would be relatively high to relatively high (between 30 and 34% of the begin with and the turnover would take total production costs). This implies that a while – say four to five years – but tobacco is a risky crop. The concluding eventually the profits would be higher.10 section of this chapter analyses tobacco production by Hereford farmers in the context Marie van Niekerk of selected economic factors within the Commercial farmer formerly resident in the regional tobacco sector. Greater Groblersdal area We used to own a farm along the Stephanus van Meulen Vaalfontein Road between Groblersdal Local commercial farmer and member of and Marble Hall, and have since the management committee for the Hereford moved to the States [USA]. We entered Irrigation Board into a tobacco production scheme A proposal was made to small-scale with MKTV, and it failed. The reasons farmers to grow oranges or table for the failure were not very clear, grapes and vegetables, with subsidies although there was talk of reduced from government and assistance tobacco prices. As crime and violence from the white commercial farmers. increased in the area, with one of our Somehow, they decided to go with the relatives murdered, we ultimately gave MKTV tobacco scheme. From what we up and emigrated to America…11 know, tobacco farming has never been profitable in the long run in this area. Gerhardus Booysens However, if the [small-scale] farmers Local respondent with links to the Hereford could start with vegetables and then commercial farming sector

46 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

The activities of MKTV in this area On the issue of debts have been known for a while. The Manager 1: land that is presently occupied by the The debts have been written off. The small-scale farmers in Hereford was debts incurred by the farmers through abandoned by white tobacco producers the 2003–4 joint venture were not due to failure by a production scheme the only debts the farmers had. When they entered into with MKTV. MKTV Tobacco RSA came into the joint is now under different ownership venture, many of the farmers already since filing for bankruptcy. There owed debts totalling about R200 000 are rumours about the whole issue to local input suppliers like OBARO and it is not clear what exactly has and NTK for the growing of cotton, happened. We have tried to advise tomatoes and other crops. We paid the the farmers, but they suspect that we debts for them. They also owed a lot just want to discourage them. The of money to the Land Bank who, when activities of MKTV really need to be they heard that something was coming investigated...12 up in Hereford, also wanted to get their money back. We refused to enter Senior managers of Tobacco RSA and into any arrangement with the Land TISA13 Bank, and therefore the proceeds of the joint venture were in no way linked On the issue of losses to the Land Bank debts. Even in the Manager 1: previous joint venture with MKTV, the The losses were due to a number of farmers made losses. When MKTV was factors. The climatic factor related liquidated, the debts were also written to a dry spell and low rainfall in the off … The farmers’ debts were part last season. Planting was therefore of MKTV’s financial problems since done late in December instead of MKTV had financed the joint venture. October. Most of the farmers were On the profile and status of MKTV inexperienced, and hence did not Manager 3: properly supervise the tobacco MKTV Tobacco (Pty) Ltd was founded production on the plots. For example, in 1909 and was the oldest tobacco some of the farmers had gone off to co-operative body in South Africa. do other business in town when the Over the years, MKTV played harvesting began. Despite all this, the a lead role in the development and farmers had unrealistic expectations. protection of the South African tobacco They thought that by simply going into industry. MKTV was also a pioneer in commercial tobacco production, they marketing, modernisation and export would become rich overnight. Growing requirements for its members and for tobacco is not easy, and in the farming the tobacco industry. The company was industry in South Africa, a farmer can also instrumental in the formulation of often make a living but not get rich. tobacco-related statutory regulations This takes a lot of work. and bodies. Due to a number of On the harvesting of Monageng’s prime reasons, MKTV went out of business tobacco crop14 in 2002–3, and a new company called Manager 1: Limpopo Tobacco Processors (LTP) We admit that mistakes might have was formed. been made along the way. We are still On the way forward learning … Normally we communicate Manager 1: with the farmers through meetings Since the harvest, we have had two where we inform them of what is to three meetings with the farmers happening and what needs to be done … between October and November last We might not have got it all right and year [2004]. At the meetings, we this is regrettable. tried explain how the joint venture

47 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

works. However, the farmers wanted interactions between the parties and among guarantees that they would not end the farmers involved in the joint venture. up with debts if they went ahead with These mainly relate to stakeholder and tobacco production. Of course there gender power relations and the problem are no guarantees in the farming of communication. They include variables industry. It is a risky enterprise and such as accountability, transparency, therefore we could not give any representation, participation and monitoring. assurances. As a result, 17 farmers Small-scale farmers and big business: A have declined to proceed with the joint venture. question of power Manager 2: Joint ventures bring together stakeholders Only two of the 19 farmers have agreed with varying degrees of power and influence. to continue growing tobacco. The Private investors’ power derives largely rest have refused. The problem is that from their substantial financial resources, there are internal politics and conflicts technology and market linkages. Although within the group of farmers. Some lead small-scale farmers’ access to government others astray, and have influenced grants and subsidies, farmer credit schemes them not to grow tobacco. and networks with influential actors and Manager 1: structures within government and civil I don’t think there is a recipe for society give them some leverage, the farmers view their lack of land ownership success in joint ventures involving rights as a significant setback. Low levels emerging small-scale farmers. If the of literacy, commercial farming skills and small-scale farmers are willing to grow access to markets also limit the power of cash crops like tobacco, they need small-scale farmers. The manner in which to be willing to work hard. There is issues such as communication, transparency also a need to manage expectations. and accountability are handled gives a good A farmer can mostly make a living indication of the balance of power within and not become rich from farming. joint ventures. We need to identify the right areas The issues of transparency and to grow tobacco without irrigation. accountability are evident in some of the Perhaps irrigation schemes are not the views expressed by respondents. In the case appropriate places to grow the crop. of Refilwe Monageng, lack of trust among What is most important in our view is the farmers resulted primarily from the that there should be partnership with lack of a satisfactory justification for the government and financing institutions discrepancy between the judgement made in these joint ventures. In this case, on crop quality before and after the crop was BAT provided funding and Tobacco harvested. What compounded Monageng’s RSA provided project management lack of trust in the dealings of Tobacco services. Partnerships with government RSA was the lack of transparency in the and financing institutions would lead manner in which the crop was harvested in to the development of proper business his absence and Tobacco RSA’s failure to plans for the joint ventures. However, communicate the details of the transaction. the problem for us at the moment is The significance of the discrepancy between that government is hostile to tobacco. expected and actual earnings that emerged Hence there is also a need to change from this transaction points to a need for attitudes within government because closer examination of the procedures for tobacco can lead to the creation of jobs interactions and transactions between the and to economic growth. joint venture parties. Tobacco RSA’s interpretation of the Key emerging issues absence of farmers like Monageng during The views expressed in the previous sections the harvesting of tobacco as an indication point to a number of issues regarding of ‘poor management’ and lack of

48 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

commitment shows a misunderstanding of the a project. Management of expectations communication and accountability problem. might, therefore, need to include ensuring Monageng’s absence during the harvesting that field days do not only highlight the of the crop on his plot was a result of his not good aspects but also point out the down- having been informed of this by the Tobacco side of commercial activity and give farmers RSA employees. Clearly the means by which constructive advice on how to address Tobacco RSA employees communicated constraints. Clearly defined and broadly information about the harvest to farmers were accepted performance indicators could not effective. Moreover, the manner in which be used in combination with appropriate Tobacco RSA handled the communication of accountability mechanisms. this critical information does not demonstrate The Hereford tobacco joint venture also sufficient regard for the requirement for highlights the need for private investors accountability between joint venture partners. to adopt appropriate communication The incident itself also demonstrates the mechanisms with farmers. Many of the implicit power relations between the farmers Hereford small-scale farmers have low levels and their joint venture partners. The relatively of literacy and some, like Kabelo Mabalane, weaker bargaining position of Monageng is a are clearly confused about the financial factor in the trivialisation of his commitment accounting. Other farmers, such as Phineas to farming by Tobacco RSA employees. Sithole, rationalise the confusing financial The field employees showed no respect accounting by reasoning that the debts for the small-scale farmer’s need to know could have derived from renovations to the about the outcome of the harvest of a prime houses. Demands by farmers to see financial crop that he had laboured hard to produce. statements indicates an emerging lack of Rather, they behaved as if the crop belonged trust in Tobacco RSA’s accounting, and also to Tobacco RSA, and beyond the labour that points to a need to foster greater transparency the farmer had already tendered and been in communications between Tobacco paid for, the farmer had become expendable. RSA and small-scale tobacco producers. The employees’ attitude contrasts with The confusion about debts increases the Monageng’s reference to the crop as ‘my farmers’ frustration with the 2004 tobacco prime tobacco’ and one of the senior Tobacco joint venture and creates a profound sense RSA managers’ allusion to ‘the tobacco of uncertainty and vulnerability. This crop’. Monageng’s case illustrates the need uncertainty, more than the internal politics to clarify issues of ownership of a ‘jointly’ perceived by some in Tobacco RSA, led produced crop. A contract that also sets out to the decision by most of the farmers to the procedures as well as the roles, resources abandon tobacco production for vegetable and responsibilities is clearly requisite. production. Without such a regulatory framework, it Gender issues might be difficult to monitor and sanction Female respondents appeared less informed non-compliance in instances such as about the ‘resolution’ of the debt issue than Monageng’s. their male counterparts. For example, Phineas The communication problem is Sithole knew that the debts had been written compounded by events that took place during off from a meeting that he had attended at the Hereford Project Publicity Day, held on the Hereford Farmers’ Association building. the scheme on 24 March 2004 (TISA 2004). However, his second wife, Maina, did not While the field day might have been intended attend this meeting and was not party to this as an incentive for small-scale farmers, information. Ironically, Maina – age 47 – was it also contributed to raising the farmers’ the household member most actively involved expectations. Granted that the quality of in the day-to-day production of crops on the the tobacco might indeed have been sub- plot. The communication problem around standard, the views expressed by Monageng the debt issue points to a gender division of and Pinkie Dube illustrate some of the labour and power dynamics within the group unintended consequences of ‘show-casing’ of farmers and within households.

49 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Such politics seem linked to levels of a more active role in day-to-day production individual and household literacy, the types activities, their participation in decision and extent of social networks and access to making tends to be limited. In cases such as bases of power and productive wealth. In Hereford, where men dominate land-holding the case of the Sithole household, Phineas (Table 3) and decision-making arenas, it is is the registered occupant of the productive important for the Hereford Women’s Project land in Plot L and therefore has access to to have clearly articulated and actively meetings in which decisions are taken and pursued objectives that address women’s information communicated. His second wife strategic interests. Despite its present Maina has access to land through Phineas, weaknesses, the Hereford Women’s Project and relies on him to pass on information from provides an opportunity for the women to meetings. Hence, despite her relatively higher mobilise greater involvement in decision contribution to crop production, she is in making and access to information.15 a weaker position to influence decisions and access information that affects her livelihood. Risk associated with capital-intensive By contrast, Kabelo Mabalane is a 63- crops year-old widowed female head of household The small-scale farmers’ production accounts and the registered occupant of land on Plot (Tables 6 and 7) show that tobacco is W. She therefore has access to meetings. a capital-intensive crop. Direct production While this might be assumed as conferring a costs account for between 89% and over degree of power, her lack of formal education 320% of the farmers’ net receipts from is a major constraint on her understanding tobacco sales in 2004. In 1999, production of financial issues. The dominance of male costs per farmer ranged from 39.2% of the plot holders on the scheme, Kabelo’s age receipts from sales for the more successful and the burden of responsibility as the sole farmers to 127.6% for the less successful. breadwinner of a relatively large household The insurance costs shown in Table 7 are results in her feeling more uncertain and relatively high, accounting for between 30 vulnerable than many of the other farmers. and 34% of the total production costs. This Gender power dynamics warrant particular implies that tobacco is a risky crop. The high attention by the Hereford Farmers’ risks involved, the requirement for substantial Association. capital outlay and the losses experienced in Within the Hereford Farmers’ successive tobacco joint ventures in Hereford Association, although the organisation is raise questions about the ability of small- purportedly predicated on principles such scale farmers to sustain tobacco production as democratic accession into the executive without long-term financial assistance. committee, gender equity, the involvement The Hereford tobacco producers’ of youth, accountability and transparency, apprehension about joint ventures can be these principles appear to have been partially understood in light of the insecurity observed pursued. Indications are that there are in the household of Kereng Maphala. gender power issues among farmers within Maphala lost most of his productive assets the organisation. Although the Hereford when the Land Bank repossessed these in Women’s Project is described as ‘struggling’ lieu of a debt owed by the farmer. This led due to inconsistency of funding, the project to his inability to grow any crops in 2004 as does not clearly show how it will contribute he waited to recover from the loss. However, to mainstreaming the strategic interests of this household might be vulnerable in the women in farming activities. longer term, given that the total household Studies by Van Koppen (2001), Bastidas income comes from the intermittent self- (1999), Zwarteveen (1997) and Zwarteveen employment of Maphala, his daughter Elsie’s & Neupane (1996) suggest that irrigation informal working relationship in exchange farming is not gender neutral, but that gender for food and soap and the social grant of roles and rights strongly determine crop types R340 for two of Elsie’s children (see Box 3). and levels of production and food security. The widespread failure to repay loans However, although women often play within the scheme was identified prior to the

50 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

tobacco joint venture. The involvement of the farmers might resort to credit schemes to Land Bank was linked to REAP, which since finance the production of capital-intensive 1997 had provided the farmers with inputs to crops. The high ratio between possible debts the value of R54 052 on a no-interest credit and net earnings will render small-scale basis through the government’s erstwhile tobacco producers vulnerable to downturns National Agricultural Sector Investment in the tobacco market prices. Losses of Programme. A mere R7 332.10 had been assets following failure to repay bank loans, repaid by 2000, and an evaluation of REAP exemplified by the case of Kereng Maphala, recommended the involvement of the Land point to a need for caution in adopting Bank in designing a scheme in which REAP credit schemes as a means of supporting the could provide funds for on-lending by the establishment of small-scale farmers. bank to the farmers, with the bank monitoring Following the failures of supply-led repayments. It is not clear whether Maphala’s credit, critics have placed particular emphasis debt was linked to assistance from REAP. on the need to ensure institutional efficiency, However, the recurrence within Hereford of sustainability of the credit programmes joint ventures that provide credit to farmers measured in terms of few default incidences, and expose them to risk, debt and possible viable interest rates and the degree of losses of assets and livelihoods suggests integration of the credit project with the the need for interventions to break the overall development of a rural financial vicious cycle of vulnerability and livelihood market. In the wake of new institutional insecurity. designs there is concern whether loans are Studies by de Klerk (1996) on similar used efficiently by borrowers, institutions farming schemes in the Western Cape suggest meet farmers’ demands for credit, credit that adequate financial support is central to programmes enhance farmers’ access to the success of any programme to establish market and whether they treat borrowers small-scale farmers. In February 2005, the equitably. While these concerns call for Minister of Finance announced the launch of a further studies to evaluate credit delivery government-funded credit scheme to support initiatives by development projects, there is emerging small-scale farmers (Business also a need to examine the potential of credit Report 2005). This has been greeted with to significantly raise small-scale farmers’ optimism within commercial farming circles degrees of leverage, rendering their attempts despite the fact that agricultural credit at commercial production highly risky. schemes for small-scale farmers, which have Another source of risk relates to decisions traditionally been an important component of to produce capital-intensive cash or industrial agricultural development projects, have often crops based on perceived opportunities failed. within regional and global production and A critical factor determining the viability market trends. While this form of risk of farming activity is ‘gearing’. This is the is typical of most commercial farming degree to which farming activities are funded activity, emerging small-scale farmers are by a small-scale farmer’s own funds relative particularly vulnerable to possible losses to finance through creditors’ funds. A ‘rule emanating from changing trends. Hereford of thumb’ of the South African Agricultural farmers’ decision to grow tobacco, despite Union (cited in de Klerk 1996:72) considers this crop’s unsuccessful production history that farms with a debt of more than 30% in Hereford, appears to have been influenced in their financial structure are unsound, by the decline of tobacco production in while those with debt levels above 50% are Zimbabwe following the orchestrated ‘fast- unlikely to survive. In the case of Hereford, track’ land reform. The decline in imports of tobacco production costs have often far Zimbabwean tobacco by BAT–SA to around exceeded 50% of net earnings, with much 10% of levels of previous years has reduced of the costs financed through a subsidy competition from Zimbabwe’s prime quality grant from BAT–South Africa as well as tobacco and created a gap in supply. This subsidies from government. Such subsidies has provided South African farmers with an are not sustainable in the long term, and opportunity for entry into the tobacco sector.

51 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

However, the broader market trends also building confidence among the farmers. show that Brazil has increased its output of The identified weaknesses relate mainly to prime tobacco, thereby claiming a significant the management of power dynamics within share of the market. In addition, BAT–PLC, the joint venture, the Hereford Farmers’ a major role player in the world tobacco Association and, to some extent, household trade, recently nominated Brazil, the United gender and age groupings. The Hereford States and Zimbabwe as future major sources Tobacco Project also indicates a need for of tobacco.16 The future of small-scale greater attention to be paid to governance tobacco production in Hereford therefore issues within and surrounding the joint remains uncertain. Channelling significant venture. investments towards capital-intensive crops, Many of the views expressed by such as tobacco, that are selected on the respondents outside of the Hereford Farmers’ basis of short-term opportunities will only Association echo the small-scale farmers’ predispose emerging small-scale farmers to observations of problems such as lack of the negative effects of debt and losses. transparency on the part of Tobacco RSA and MKTV, its predecessor. While the views of key respondents from the tobacco Conclusion agribusiness sector indicate their greater Experiences in this joint venture show that clarity regarding institutional arrangements, black economic empowerment in agriculture it appears that no effort has been made to requires that attention be given to issues of ensure broader awareness of the rationale power, gender, accountability, transparency, behind changes within the private investor communication and the risks associated with group, particularly the role and fate of capital-intensive crops such as tobacco. There MKTV. In view of the repeated failure of is also a need for support to strengthen farmer the project, such awareness is vital, given organisations so that they can engage more the attention and moral, political, financial effectively and equably both within the group and other support that the Hereford case and with external role players. Emerging attracts from a wide range of stakeholders findings point to strengths and weaknesses and observers. The disparity in levels of in the governance of the Hereford Farmers’ information between people inside and Association. outside the tobacco agribusiness sector points Strengths derive from the farmers’ pro- not only to a problem with communication, active move to reclaim land, water and but also to a problem of accountability. other resources on the scheme, and from A question that begs to be answered is: their growing confidence resulting from In a joint venture setting with so many support by government and other external stakeholders, who is accountable to whom, role players. Of these factors, land provides and who should play the monitoring role? the primary motivation for farmers to claim The views of external respondents point further rights of access to water, decision to the importance of legitimacy and trust making and government funding. There are in decision making. The adoption of new also strengths associated with the support ideas depends on farmers’ perceptions of the given by private investors in the tobacco joint legitimacy of the sources of advice. Emerging venture, mainly relating to the transfer of farmers’ lack of trust in some commercial production skills to the small-scale farmers. farmers and provincial government officials All the respondents express an appreciation emanates from past conflicts and tensions, of the knowledge gained from the extension in which emerging farmers perceived that and technical services provided by Tobacco their interests were being marginalised and RSA. The mode of skills transfer is largely undermined. Hence farmers’ refusal to accept through direct observation and instruction the advice of some commercial farmers and in the course of production activities. There government officials to grow high value is also some training through workshops as vegetables and tree crops. Yet they accepted well as literacy classes. Such skills transfer the advice of a trusted white commercial and education constitute key factors towards farmer that they should grow tobacco, and

52 Chapter 4: Hereford Tobacco Project: A joint venture in crisis

earlier that of a trusted NGO, Africare, to 6. Interview, Hereford Irrigation Scheme, 11 grow high value vegetables. The Hereford October 2004. case also illustrates how the loss of trust can 7. Interview, Hereford Irrigation Scheme, 11 result in advice from a trusted source, in this October 2004. 8. Interview, Hereford Irrigation Scheme, 11 case Africare, becoming unacceptable. October 2004. Beyond issues of trust, the debacle around 9. Interview, Maloeskop Groblersdal, 14 the tobacco joint venture is also characterised October 2004. by political manoeuvring by the leadership 10. Informal Interview, Groblersdal, 13 October of the farmers, who feel that as a group they 2004. have had to deal with more powerful actors. 11. Informal conversation, Johannesburg, 15 Although not fully substantiated, this is October 2004. evident in the farmers’ choice of strategies 12. Telephonic interview, 13 October 2004. and in certain decisions by the leadership. 13. Interviews, 9 March 2005. Some farmers consider the leadership style to 14. See Chapter 4. 15. Further research will seek to interrogate be rather heavy-handed, while some external the communication problem in order to get actors consider it variously as ‘bullying’, greater clarity on the power and gender ‘leading others astray’ and ‘rather too dynamics in Hereford. Questions will relate 17 strong’. Such perceptions point to concerns to issues of representation, language barriers, over power relations within the group. The accountability and power dynamics within weaknesses, however, do not necessarily the group in the management of information indicate failure but rather the need to build resources. As far as possible, participant organisational strength. observation will be used in settings such as meetings and focus group discussions. 16. Email correspondence with the General Endnotes Manager of BAT–Zimbabwe Ltd, 6 May 1. Tobacco RSA Press Release, May 2004. 2005. 2. Interview with Tobacco RSA Manager for 17. Seeing that questions of governance were Black Economic Empowerment (BEE) a sensitive issue for the leadership of the Projects, 13 October 2004. farmers, questions were deferred to allow 3. Telephonic interview with CEO for TISA and a more conducive relationship to develop Tobacco RSA, 9 March 2005. between the researcher and the leadership. At 4. Interview, Hereford Irrigation Scheme, 14 the time of writing this report, much progress October 2004. had been made in this regard. Further research 5. Interview, Hereford Irrigation Scheme, 11 will proceed to discuss their leadership style October 2004. with the leadership of the farmers.

53 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District Chapter 5: Vegetable joint venture or ‘the “return” of the fugitive pack house’

A new joint venture for the production of ‘baby’ vegetables for the export market in the Hereford Irrigation Scheme in 2004 was identified as a possible niche for the small-scale farmers. One of the envisaged highlights of this joint venture was the possibility of realising a longstanding vision for a ‘pack house’. However, the process of setting up this joint venture seems to have been fraught with contestation, particularly with regard to the location of the pack house. This chapter considers how local decision making is responding to changes in the power arena.

new joint venture for vegetable Pay. Other crops to be produced included production emerged in the Hereford pumpkin, butternut and green beans. AIrrigation Scheme between The objectives of the joint venture were to: September and October 2004. This involved • produce ‘quality fresh vegetables’ a group of 15 farmers who had formally to supply the local, national and established a co-operative called the Hereford international markets. Vegetable Growers’ Association (HVGA). • process and package the vegetables. A business plan had been drawn up as part • generate income from the project, keep of an application by HVGA for government it sustainable and use it as a support funding towards the construction of a base for the emerging Hereford farmers vegetable packaging house, and a grant of venturing into the fully commercialised approximately R550 000 had been approved sector. by the Provincial Department of Agriculture • create job opportunities for both and Land Administration. The farmers had the project owners and some of the also signed a contract with a private investor, unemployed people in surrounding Nature’s Choice (NFM) Farms (Pty) Ltd, and communities. the latter had established a new company, The joint venture envisaged that the land NFM Marketing, to handle the marketing resources to be used for production would for NFM Farms and HVGA. The farmers include the entire 160ha of irrigated land in HVGA were to have a 25% stake in the falling within the Hereford Irrigation Scheme Alberton (Johannesburg) based marketing as well as the use of tunnels (greenhouses) company. The joint venture partners had on the communal pot (Plot 34). The total entered into their first contract for the projected earnings from this joint venture production and marketing of sweetcorn to ranged from approximately R4.5 million in retailers like Spar, Woolworths and Pick ’n the first year to R13.7 million in the fifth

54 Chapter 5: Vegetable joint venture or ‘the “return” of the fugitive pack house’

year. These figures were based on production to water and were well organised as a group, in tunnels and conventional irrigation of they lacked access to markets. The verdict tomatoes and cabbages, at an annual gross of Yukon International was that a pack profit margin of approximately R24 500/ha house was feasible, and that three high value and R26 000/ha respectively. Implicit within vegetable crops that could be produced were these projections were assumptions that all courgettes, baby cauliflowers and paprika. the small-scale farmers on the scheme would Consequently, plans were drawn up for the pool their individual land rights into the construction of a pack house on the Hereford joint venture enterprise, and that the water Irrigation Scheme. allocations and availability in the scheme In an attempt to address the farmers’ would remain constant. need, Africare facilitated the formation of Farmers’ expectations of success for a joint venture between the farmers and two this new joint venture ran high. One of the private marketing firms, including Yukon envisaged highlights of the joint venture was International and Swallow International, the possibility of realising a longstanding respectively United States and Swaziland- vision for a ‘pack house’ located within based firms of buyers and exporters of the Hereford Irrigation Scheme. Indeed, vegetable commodities. The production of throughout my fieldwork in 2003 and 2004, ‘baby’ vegetables for the export market was the Hereford scheme was dominated by identified as a possible niche for the small- talk of the pack house. With the approval in scale farmers. 2004 of a government grant of R550 000, During the first year of baby vegetable this vision finally appeared to be coming to production in 1999, the farmers attended fruition. a training course to develop skills in quality control and marketing. They also harvested Vegetable pack house: Birth of and sold produce over a five month period from May to September. The initial attempt an idea to export crops of high quality floundered The joint venture between HVGA and NFM because of the failure by the farmers to meet Farms was preceded by a similar initiative, the international standards for exported in 1999, through Africare’s Rural Enterprise perishables. Drawbacks included distance and Agribusiness Programme (REAP) in from airports and the unavailability of the Greater Sekhukhune area. The initiative refrigerated transport, which led to spoilage was part of a bigger project by Africare of crops and the subsequent reduction of to promote commercialised small-scale value. A key shortcoming, however, was irrigation farming in the Greater Sekhukhune the lack of a ‘pack house’ of acceptable area. Ten communities were involved in international standards to prepare and this initiative, which had four components: package the produce under the required extension and training, marketing, water export processing conditions. This initial development and co-operative development. experience reinforced the perception that Following the decision to grant land rights a pack house, located on the Hereford to the small-scale farmers under the LRAD Irrigation Scheme was necessary, primarily programme, Hereford Irrigation Scheme was to serve its members but also other vegetable selected as a pilot project to promote entry producers within the locality. by black farmers into the highly competitive Working in collaboration with the export-orientated commercial farming and National Department of Agriculture, Africare agri-business sectors. secured funding of R1.4 million to initiate Africare contracted Yukon International to the pack house project. The project was conduct a feasibility study on 40ha of land in expected to generate and improve farm-based the Hereford Irrigation Scheme and in other and non-farm based livelihoods, directly small-scale irrigation schemes in the Nebo for 217 small-scale farmers and 61 people Region of Greater Sekhukhune. The initial employed in the pack house and nursery, and assessment of the Hereford Irrigation Scheme indirectly for 2 500 people working within showed that although the farmers had access the production co-operative. At least half of

55 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District

Greater Sekhukhune District’s more than house had to be located elsewhere in the 10 000 farmers were envisaged as utilising district where it would be accessible to all the pack house. A further 50% of farmers small-scale irrigation farmers in Greater was expected to see a large improvement in Sekhukhune. From the debate that emerged access to inputs (seedlings from the nursery), around the best possible location, the REAP access to markets through improved post- Steering Committee established within harvest handling (pack house), improved itself a ‘Pack House Task Team’ to address farm management skills (training) and access the problem of location. Finally, in 2002, to market information and bulk sales (through a decision was made to locate the pack house co-operatives). in Groblersdal. A key issue for Africare was that the idea Shift of the pack house to build a pack house had emerged from a The plans to locate the pack house within process of market development and that there the Hereford Irrigation Scheme sparked was no available funding for its construction. off contestation between a number of A second key issue related to ‘ownership’ of stakeholders. The contestations appear to the pack house. In attempting to address this have been strongly linked to the emergence second issue, the REAP Steering Committee of the pack house project at a time when the and Africare decided to form the Sekhukhune idea of ‘developmental’ local government Farmers’ Development Trust (SFDT), which was beginning to be strongly embraced both would own and manage the pack house. In nationally and in Greater Sekhukhune. In line 2001, the SFDT was registered as a trust with the requirements of the IDP process, the organisation and a board of trustees was pack house project plans were tabled before democratically constituted, with a female the Greater Groblersdal local municipality. farmer as chairperson of the board. Official The project was to be included in the documentation2 states that the establishment municipality’s LED plans. It was around of the SFDT was a response to emerging this time that a decision was made to shift farmers in the Greater Sekhukhune District. the location of the pack house away from A number of activities appear to Hereford Irrigation Scheme into the district have taken place in preparation for the arena. This entailed selecting a location construction of the pack house. The REAP from which the pack house could best serve Steering Committee visited similar initiatives the interests of not only farmers in the elsewhere to observe how such projects were Hereford Irrigation Scheme and its immediate conceptualised. Calls for submissions of hinterland, but also of Greater Sekhukhune proposals for the design and construction of District as a whole. Selecting a site that the pack house were published, and the tender would be politically acceptable to most selection process was concluded in February stakeholders and at the same time logistically 2003. Concurrent with these developments, practical, in terms of the envisaged model the Greater Groblersdal local municipality of commercial production, proved to be a took office and the new mayor promised to difficult and complex problem.1 consider a request for municipal assistance in Because the REAP included nine allocating a site for the pack house. However, other irrigation communities, there were this appears not to have happened, and the problems with locating the pack house, as SFDT eventually purchased two plots of originally planned, in the Hereford Irrigation land in the industrial section of Groblersdal. Scheme. A decision-making process was Africare provided funding. set in motion in 2001 by the REAP Steering The local municipality responded to this Committee, consisting of representatives acquisition of land by proffering funding for from the Department of Agriculture, Tribal the construction of the pack house, through Councils and REAP Irrigation Projects, who the Municipal Local Economic Development made decisions about the local Africare Fund. A MOU was then drafted between Programme. The REAP Steering Committee the Greater Groblersdal local municipality decided that for practical purposes the pack and the SFDT. The provisions of the MOU

56 Chapter 5: Vegetable joint venture or ‘the “return” of the fugitive pack house’

were that the local municipality would have Other identified power dynamics were ownership of the project for three years, between the Greater Sekhukhune District after which time the ownership would be mayor, who is also the political champion transferred to the SFDT. The decisions and of the ISRDP, and the then-district the MOU around the pack house project municipal manager. Views were expressed elicited extensive debate, contestation and that the pack house issue was one of the power dynamics. It was at this point that the factors that contributed to the escalation Greater Sekhukhune District Council appears of tension between the two, and to the to have joined the fray. ultimate departure of the latter. Attempts to There was debate over the choice of gain further insights into this matter were Groblersdal as the site of the pack house, unfruitful. Efforts to interview the mayor over the four other local municipalities in the were repeatedly unsuccessful. However, an Greater Sekhukhune District. The rationale interview with the manager in the mayor’s given by the REAP Steering Committee office revealed that the district mayor had and the SFDT for choosing Groblersdal was become involved in the matter largely that the urban centre possesses the required because there was a realisation that the board infrastructure, services and human resources of the SFDT was not representative of the to support the pack house venture. Farmers interests of the district as a whole. in the Hereford Irrigation Scheme contested A key respondent from the IDT, which this. Their view was that the decision- played an advisory role to the Greater making process was corrupted by political Sekhukhune nodal delivery team, had expedience and the self-interest of certain a contrasting view. This was that the individuals who stood to benefit from the involvement of the district municipality project. There were also questions over was justified by the need for a district the logistics of transporting produce over level structure to facilitate the filtering of distances ranging from one to over a hundred project funding from the NDA, through the kilometres, particularly without refrigerated Provincial Department of Local Government transport. Factors underlying the debate included expectations of high incomes for and Housing, ultimately to the Greater farmers and allied sectors, farm and non-farm Groblersdal local municipality. employment for local people, and the prestige Notwithstanding these explanations the associated with what was perceived to be a farmers on the Hereford Irrigation Scheme potentially high profile project. perceive there to be various reasons for the Interviews with key respondents revealed change of location for the pack house. One the existence of power dynamics between perception is that their lack of secure tenure the district municipality and the local was a prime factor, while another is that municipality in the debate surrounding some stakeholders within district and local the pack house project. Apparently, municipalities acted out of self-interest. members of the nodal delivery team of the In contesting the decision to locate the district had taken the pack house proposal pack house in Groblersdal, farmers in the directly to the Provincial Department of Hereford Irrigation Scheme argue that the Local Government and Housing, without pack house was originally intended to benefit consulting the Greater Groblersdal local their group, who had participated in the initial municipality. The latter therefore considered experiment of producing baby vegetables that the district municipality had not acted for export. Statements of the new municipal according to proper procedure, and had manager for Greater Sekhukhune and the in fact overlooked the role of the local site manager for Africare corroborate this municipality in making decisions about an view. The Hereford small-scale farmers issue within its jurisdiction. The views of further point out that their surveys of Greater Sekhukhune’s nodal delivery team similar projects and their assessment of the could not be obtained as all the officers in logistics of transporting their produce over that team were no longer employed by the the one to two kilometre distance show that municipality. it is not practical to locate the pack house

57 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District in Groblersdal. They also point out that, more realistic, given that not all farmers want according to the requirements of international to be part of this joint venture. standards for perishable export crops, it is not This development appears to have given hygienically desirable to locate a pack house a new lease of life to the farmers, some in an industrial area, where pollutants might who had joined the tobacco joint venture contaminate produce. (described in Chapter 4 of this report) while In spite of the Hereford farmers’ others who had resolutely refused to grow arguments, the implementation of the pack tobacco for ethical reasons. The ‘return’ house project went ahead. Construction of a of the pack house also accounts for the pack house has begun in the industrial area of decision by many farmers to abandon tobacco Groblersdal. production following the failure of the 2004 venture. Return of the Hereford pack house: A new lease on life Conclusion In 2003, a feeling of despondency over the The pack house project illustrates how the ‘lost’ pack house was observed amongst the involvement of a multiplicity of stakeholders, small-scale farmers on the Hereford Irrigation including municipalities, in the governance Scheme. Questionnaire and interview data of joint venture projects, such as the Hereford showed that the vegetable producers had vegetable project, can impact upon the resorted to marketing their produce in livelihood strategies of small-scale farmers. roadside stalls and to local small traders. The pack house assumes an allegorical image The leadership of the Hereford Farmers’ through which farmers’ struggle to eke out Association stated that they would not utilise sustainable livelihoods from the gains made the pack house in Groblersdal on principle, as through access to land and water are played well as for practical reasons. Their objective out. Whereas the governance problems of the was to continue to seek assistance for the tobacco joint venture are largely contained construction of a pack house located within within the parties to the venture, those of the the scheme. earlier vegetable joint venture are largely The formal request for funding began with driven by external influences. Following what the Hereford Farmers’ Association applying they perceived to be the failure of the initial for financial assistance through the Greater pack house project, the farmers decided to Groblersdal local municipality in December enter into an initial partnership with MKTV 2003. The application appears to have had and later Tobacco RSA, regardless of advice support from the district municipal office. not to do so. This indicates the level of According to the district municipal manager, farmers’ distrust of a broader governance the district-wide focus of the project had system. By closing their ranks and engaging become impracticable for several reasons. in an independent joint venture with MKTV These included the time and effort required and Tobacco RSA, the farmers effectively to overcome the effect of distance on the reclaimed the latitude to determine their transportation of perishable produce, shortage livelihoods. However, the unintended failure of irrigation water over much of the district, of the tobacco project in 2004 seems to and the huge amount of funding required indicate the need for greater co-operation to make such a large number of small- between farmers and other stakeholders, scale farmers competitive enough in the in order to minimise the risk of erosion of horticultural sector. livelihoods. There is also a need to place The efforts of the Hereford Farmers’ farmers’ interests at the centre of such Association appear to have paid off during co-operation. 2004, when the NDA approved a grant of The pack house project suggests approximately R550 000 for the construction that problems of accountability exist in of a pack house and tunnels on the communal municipalities. Often, governance practices plot. The grant was less than the R900 000 tend to predispose elected councillors to requested by the HVGA. This is probably pursue the interests of their constituencies.

58 Chapter 5: Vegetable joint venture or ‘the “return” of the fugitive pack house’

Differences in degrees of power and is responding to changes in the power arena. influence, and vested interests among elected The degree to which these changes imply a councillors can result in decisions that favour significant shift to downward accountability, the interests of the more powerful actors. has yet to be seen. The power dynamic behind the decision Although the Hereford pack house project to locate the pack house in Groblersdal is provides some evidence to the contrary, in subject to debate. However, there seems to be my view, municipalities can play useful roles consensus that the decision-making process in pursuing the interests of local people and initiated by the REAP Steering Committee co-ordinating aspects of the facilitative and in 2001 might have been influenced by monitoring roles by other stakeholders. The dynamics within and between various spheres degree to which municipalities can fulfil of governance, and particularly by high these roles depends on the extent to which profile individuals within certain political and they are downwardly accountable. business circles. Clearly the Hereford Irrigation Scheme Endnotes has been the focal point of attention from 1. I encountered difficulties in unravelling a variety of stakeholders and observers, the complexities of the process of pack including roleplayers within government house ‘capture’, with some respondents and political party structures ranging giving different versions of the process on from the local to the national level, and each occasion they were interviewed, and possibly beyond. The designation of Greater others deliberately withholding information. Sekhukhune District as an ISRDP node places Consequently, the approach I took was to an additional imperative on government triangulate all information and to request available documentation relating specifically interventions to be seen as effective in to the project. Attempts to get information and addressing issues of poverty and inequality. documentation from the Greater Groblersdal International events, such as the 2002 World local municipality were unsuccessful. Summit on Sustainable Development, have Research revealed that the LED Manager also contributed to the increasing focus on the for the local municipality had initially been district (Tapela 2002a). Given the wide range one of the plot holders on the scheme, and of parties interested in the Hereford case, and had subsequently left the scheme under variations in the local and national political circumstances that were unclear to the researcher. This section of the report thus and institutional milieu, it is not particularly relies on information collected from other clear to whom the local municipality has been key stakeholders, including Africare, SFDT, accountable primarily. The ‘return’ of the Greater Sekhukhune District and the Hereford pack house to the Hereford Irrigation Scheme Farmers’ Association. strongly indicates that local decision making 2. SFDT Information Brochure.

59 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District Chapter 6: Lessons from the Hereford case

This chapter considers some of the lessons that can be learned from the Hereford case study. It highlights the challenges of creating a viable class of black commercial producers from the ranks of the dispossessed and previously disadvantaged.

upport to emerging farmers by the and producer households; achieving various sectors derives from the core institutional co-ordination; reducing the risks Sobjectives of the Agricultural Sector associated with capital-intensive crops such Strategy (DLA 2001) namely, to: as tobacco; and sharing joint venture costs • enhance equitable access and and benefits in a fair and equitable manner. participation in the agricultural sector. A major challenge is the creation of real • improve global competitiveness and opportunities for emerging black farmers in profitability. the context of divergent social and neo-liberal • ensure sustainable resource management. policies and rural poverty and inequality. • ensure food security. The Broad Based Black Economic Joint venture risks, in the Empowerment Framework for Agriculture (Agri BEE) addresses the first two objectives, context of rural poverty and and joint ventures are considered a key inequality strategy for promoting entry by emerging The Hereford case points to the fact that irrigation farmers into the commercial emerging producers within joint ventures, sector. Strategic initiatives that complement who are often resource poor and vulnerable, Agri BEE include Irrigation Management carry an inordinately high proportion of risk. Transfer, Water Allocation Reform, Policy They lack sufficient information on market on the Financial Assistance to Resource trends and enjoy very little power to influence Poor Irrigation Farmers, Land Reform, producer prices. By contrast, private investor the Comprehensive Agricultural Support partners have greater access to information Programme, municipal local economic on market trends, a stronger vested interest development frameworks and the ISRDP. in the produce, and yet carry a relatively The Hereford case provides useful lower risk. This asymmetry reflects the insights for the implementation of these larger structural inequalities that characterise complementary initiatives, which are often much of South Africa’s rural economy. An undertaken in a fragmented manner. example of small-scale farmers’ particular Lessons deriving from the case study vulnerability to risks associated with the broadly relate to the challenges of creating production of capital-intensive crops relates a viable class of black commercial producers to the decision by Hereford farmers to grow from the ranks of the dispossessed and tobacco, despite the fact that historically previously disadvantaged. These challenges tobacco production has been unsuccessful include strengthening governance and rights in Hereford. There was a perception that within joint ventures, farmers’ organisations the decline of Zimbabwe’s prime tobacco

60 Chapter 6: Lessons from the Hereford case production and exports to BAT–South Africa, Costs, benefits and power following the orchestrated ‘fast-track’ land reform, constituted opportunities for entry issues in joint ventures into the tobacco sector by small-scale South Linked to the issue of risk is the question of African farmers. While the joint venture mechanisms for sharing costs and benefits partners differ in their views on the emerging by joint venture partners. In the case of farmers’ skills and the quality of tobacco Hereford, private investors, farmers and produced, perceptions on opportunities for government have all variously contributed market entry have been overshadowed by an to the production of tobacco, vegetables increase in Brazil’s share of prime tobacco and other crops. On the one hand, private output. The recent nomination by BAT–PLC investors have made significant contributions, with BAT–SA providing a grant of R3 of Brazil, the United States and Zimbabwe as million and Tobacco RSA providing major sources of tobacco for the future1 raises technical and managerial services to the further questions on the sustainability of joint tobacco joint venture. While on the one ventures that promote crops such as tobacco hand BAT–SA’s capital input has assisted as a means of empowering emerging farmers. farmers by eliminating debt-related costs The broader local context in which joint and risks, it has also raised questions around venture projects such as Hereford’s are ownership and control of the crop. On the undertaken is one that is not only designated other hand, the government has made an by government as an ISRDP poverty node, even greater contribution, paying R7 million but also one that is renowned as a cradle for for the rehabilitation of the water storage rural resistance to apartheid. At the micro- dam on the scheme, R281 165 to settle level, Hereford Irrigation Scheme is the site arrears in emerging farmers’ water accounts of historical and ongoing contestations over and R550 000 towards the construction of land, water and related resources between greenhouses, among other expenses (see emerging black farmers and established white Table 5). Through the policy of the Financial farmers. Various interests therefore converge Assistance to Resource Poor Irrigation on progress in agricultural ‘development’ in Farmers the government will also fund both the district and the scheme, including a further R2.2 million required by emerging the interests of private sector investors. For farmers towards lining the Hereford Canal. these, Agri BEE provides an opportunity to In addition, the government has made demonstrate social responsibility by fostering other non-monetary contributions in the entry by black commodity producers into form of extension services, mechanisation the commercial sector, while partnerships and, most important, land which will be with farmers such as those from Hereford transferred to the emerging farmers in terms broaden their access to productive land and of the Hereford LRAD project. Apart from water, as well as labour. The failure to date contributing their labour and participating of joint ventures in the Hereford Irrigation in decision making, the farmers have Scheme and in similar projects in the Olifants mostly been recipients of assistance from Catchment Area suggests a need to review private investors and government. This will existing approaches. At a time when redress change with the cessation of subsidies and for past discrimination has become central the introduction of ‘efficiency’ measures to debates on the impacts of government following the application of the water sector’s interventions, it is imperative for joint ‘user-pays’ principle. ventures not to reverse the gains made by Despite their seemingly modest emerging black farmers. The failure of joint contribution, the farmers have nonetheless ventures in the Hereford Irrigation Scheme had significant freedom to make decisions suggest a need for measures to reduce around which private investors they enter exposure of emerging farmers to the high into joint ventures with. While this indicates risks associated with capital-intensive crops. a relatively high degree of devolution of

61 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District decision making, it has highlighted problems by mainstreaming gender and generating relating to the capacity of the farmers’ gender perspectives. Although frameworks to negotiate the terms and conditions of for institutional support to emerging joint venture arrangements. The absence irrigation farmers include training of farmers’ of a written contract for the tobacco joint organisations, often the content pertaining to venture and the inflated projections of the gender issues is not stated in explicit terms in new vegetable joint venture’s business such training programmes. plans are cases in point. In the Hereford Observations that gender power dynamics case, devolution of decision making has not in irrigation schemes are often problematic translated into significant power within joint (Van Koppen 2001; Bastidas 1999; ventures. There is a need to clarify issues Zwarteveen 1997; Zwarteveen & Neupane around ownership and control of produce 1996) suggest the need for clearly stated and for joint venture partners to agree on and funded programmes of action around principles of communication, transparency awareness creation, adoption and promotion and accountability. of gender-sensitive principles. In view of the financial and non-monetary contributions by government, and in light Institutional co-ordination and of the core objectives of the Agricultural Sector Strategy, the National Water Act, the monitoring While the Hereford case shows that there has Land Reform Policy and the ISRDP, it is been a degree of integration across spheres imperative that policy practitioners provide and sectors of government, and between structured and co-ordinated support to government, civil society and the private farmers entering into joint ventures. Some of sector, the support provided by a multiplicity the questions to be addressed are: of stakeholders to emerging farmers has • Given the propensity of private investor often been fragmented, and co-ordination partners to exercise strength on the basis and monitoring has been lacking. The of their contributions to the joint venture, ‘Systems Act’ establishes municipalities as to what extent can the contributions by developmental local authorities and accords government be regarded as leverage for them the legal responsibility to promote, the emerging farmers? undertake and co-ordinate all development • What mechanisms can be used to ensure planning and budgeting, facilitate compliance a fairer distribution of joint venture costs with the principles of co-operative and benefits between producers and government and intergovernmental relations, private investors? and monitor the impact and effectiveness of any services, policies, programmes or plans Gender issues within their areas of jurisdiction. However, The various sectors involved in promoting the earlier Hereford vegetable project emerging irrigation farmers appear to suggests the limited capacity of the Greater recognise the need for gender equity. Sekhukhune District municipality to play an Provisions for gender equity are made effective co-ordination and monitoring role. in the Financing Mechanisms for the In the case of Greater Groblersdal local Comprehensive Agricultural Support municipality, the LED Committee for Programme, BAT–South Africa’s broad Agriculture constitutes the relevant structure based BEE framework and the policy on for dealing with cases such as joint ventures the Financial Assistance to Resource Poor in the Hereford Irrigation Scheme. This Irrigation Farmers, administered by DWAF. structure brings together large- and small- The latter goes a step further by basing scale commercial farmers, communal farmers levels of financial grants on the proportion and relevant locally-based government of historically disadvantaged females within departments, NGOs and the agri-business decision-making structures of farmers’ sector. However, the Groblersdal LED legal entities. However, such frameworks Committee for Agriculture has virtually need to go beyond issues of gender equity collapsed owing to the lack of an LED

62 Chapter 6: Lessons from the Hereford case

plan for the municipal IDP and a broadly integration between water management and perceived lack of leadership and support local developmental structures is achieved. within the municipality. Without such integration, the interests of More recently, however, there have been small-scale irrigation farmers are likely to moves towards improved co-ordination. At remain marginal to developmental processes. provincial and regional levels, the promotion Drawing from the developmental logic of entry into commercial production of decentralisation (Ribot 2002), if local by emerging farmers is driven by the authorities are sufficiently downwardly Mpumalanga Co-ordinating Committee for accountable, it can be reasonably assumed Agricultural Water (CCAW). This structure that such interaction would contribute to brings together actors from the environmental ensuring that the interests of small-scale cluster, namely the water, agriculture, farmers remain central to efforts to promote land and environmental departments. The an emergent class of petty commodity Mpumalanga CCAW provides a key link producers. between the national and the local spheres In addition to the need for improved of government. It is through this structure co-ordination, joint venture settings such that the Hereford Farmers’ Association, as those in Hereford require effective and indeed the Hereford Irrigation Board, monitoring mechanisms. The farmers submitted applications in August and are poised to own their land, yet require September 2004 for government subsidies substantial government assistance. Various for improved access to water. The application government programmes and structures by the former has been lodged in terms of have been put in place to promote emerging the new Policy on Financial Assistance to farmers. Yet because this assistance is Resource Poor Irrigation Farmers, adopted insufficient, private investors offer additional in September 2004. The general view of resources to promote black economic some actors within the CCAW is that the empowerment in agriculture, while expecting application by the small-scale farmers profits. This milieu is influenced by political will receive approval because of their and business interests. The complexities classification as ‘resource-poor irrigation of having a multiplicity of stakeholders farmers’ and also because of the grounding are compounded by autonomous decision of land rights on the scheme in the LRAD making by individual and collective emerging programme. farmers. There is a strong need to define who A more effective structure to deal with is accountable to whom, and who plays the agricultural issues within the local authority monitoring role. Municipalities often lack is required. Challenges of achieving the resources to perform monitoring roles. integration between local authorities and Policy makers need to find ways of ensuring water-related institutions tend to persist that joint ventures involving resource-poor after various sector reforms have been irrigation farmers are effectively monitored, implemented, often with negative impacts not only for economic viability, but for on local people’s livelihoods and wellbeing compliance with BEE objectives and for (Tapela 2002b). There is, as yet, no clear link maximum impact on people’s livelihoods. between the activities of the CCAW, which Given that farming activities are an is informed by Integrated Water Resources extension of the broader basket of livelihood Management approaches, and those of strategies for farmer and farm worker local authorities, which are responsible for households, evaluations should recognise integrated development planning within this linkage. Criteria for monitoring the ISRDP nodal district. In the past, the and evaluating the performance of the local municipality’s LED Committee for beneficiaries of government assistance Agriculture interacted indirectly with the should accommodate both commercial and CCAW through representation by provincial subsistence farming objectives. With specific and national government officials, however regard to irrigation schemes assisted through it has since collapsed. There is a need for the LRAD programme, straddling can result mechanisms to ensure that a greater degree of in the invisibility of those household and

63 Joint ventures and livelihoods in emerging small-scale irrigation schemes in Greater Sekhukhune District broader community members living outside skills that strengthen farmer organisations irrigation schemes. The impacts of projects to enable them to deal with both internal on these people might be overlooked in and external power issues. Such skills will evaluations of the performance and impacts contribute to the effectiveness of existing of projects. The evaluation criteria should efforts to develop production, processing and therefore also include indicators such as marketing skills. the number of people, for example farmers’ The Hereford case epitomises South households and broader communities, Africa’s challenge of addressing rural benefiting from the schemes. poverty and inequality through co-ordinated strategies involving government, civil society Conclusion and the private sector, in partnership with Given significant government expenditure local people. Joint ventures in the irrigation on promoting farmers’ livelihoods, the need scheme articulate the government-driven for effective co-ordination and monitoring of Agri BEE. The location of the joint venture joint ventures cannot be overstated. However, projects within a designated ISRDP poverty what seems more critical is the need to node that is renowned as a cradle for rural examine the basis of government intervention resistance to apartheid, and the historical and on a hybrid of neo-liberal development ongoing contestations over land, water and approaches and social welfare or anti-poverty related resources between emerging black approaches. In the context of the prevailing farmers and established white farmers in commoditisation of productive water and the Hereford area, place a strong imperative land resources, and the recurrent failure of on policy makers to ensure that appropriate joint ventures, government subsidies might mechanisms are adopted to address the not be sufficient to secure the livelihoods of problems associated with joint ventures. emerging farmers. Although the government has made moves to address the financial Endnote requirements of emerging farmers, there is 1. Email correspondence with the General still a need for a broader range of support Manager of BAT–Zimbabwe Ltd, 6 May services, including the development of 2005.

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