tag:theconversation.com,2011:/uk/topics/agricultural-economics-18943/articlesAgricultural economics – The Conversation2022-08-14T13:14:52Ztag:theconversation.com,2011:article/1885052022-08-14T13:14:52Z2022-08-14T13:14:52ZCanada’s disappearing ‘average farmer’ means one-size-fits-all policies no longer work<figure><img src="https://images.theconversation.com/files/478594/original/file-20220810-6805-4k341c.JPG?ixlib=rb-1.1.0&rect=0%2C23%2C4000%2C2646&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In this drone photo, a tractor is seen working a farm field in Manotick, Ont., in July 2022. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span></figcaption></figure><p>Canada’s agriculture industry has been <a href="http://dx.doi.org/10.22004/ag.econ.283563">undergoing significant changes</a> over the past 45 years. Since the 1970s, the number of farms has been steadily declining, but not all farms have been impacted equally — <a href="http://www.agrifoodecon.ca/uploads/userfiles/files/stratification%20in%20canadian%20agriculture%20november%202021.pdf">mid-size farms have been hit the hardest</a>, as the number of small and large farms increases.</p>
<p>The mid-size farm category used to cover the majority of agricultural operations. These tended to be operated by a single farmer working on a full-time basis to support a single farm family. Now, a range of farm sizes exist, with small ones often being operated by farmers with off-farm employment, and larger ones being run by several farmers. </p>
<p>While <a href="https://www.producer.com/news/mid-size-farms-vanishing-act/">mid-size farms used to be the average farm</a>, it is now difficult to define what the average farm is. This has implications on determining the need for policy intervention and what that policy will look like. It’s clear the one-size-fits-all approach to policy-making no longer works.</p>
<h2>Changes in farm size</h2>
<p>The changes in farm size over the last two generations are illustrated in several ways. The first is through the decline in the total number of farms in Canada. <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/220511/dq220511a-eng.htm">The number of farms has fallen by 44 per cent</a> to 189,874 farms in 2021 from 338,552 farms in 1976. </p>
<p>Secondly, there was a significant decline in the amount of mid-size farms. While the total number of farms has fallen, the decline is particularly evident among mid-size farms. In 1976, most farms were mid-size, but by 2021 that number had declined 59 per cent to 21,587.</p>
<figure class="align-center ">
<img alt="A graph comparing the distribution of farm sizes in 1976 versus 2021" src="https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=285&fit=crop&dpr=1 600w, https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=285&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=285&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=358&fit=crop&dpr=1 754w, https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=358&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/478379/original/file-20220809-24-vuiv8p.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=358&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Number of farms by size category in Canada in 1976 and 2021. The height of each bar indicates the number of farms in each size category, measured in acres.</span>
<span class="attribution"><span class="source">Statistics Canada</span>, <span class="license">Author provided</span></span>
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</figure>
<p>Thirdly, there was an increase in the share of the smallest and largest farm size categories. The number of large farms increased to 16,966 in 2021 from 7,868 in 1976. The number of small farms has remained relatively constant at 12,000 since 1976, but this now represents seven per cent of the total, whereas it represented only four per cent in 1976.</p>
<p>Lastly, the shape of the distribution of farm size changed from a <a href="https://www.investopedia.com/terms/b/bell-curve.asp">bell-shaped, normal distribution</a> in 1976 to a flatter, more uniform shape in 2021. Farms are now spread more equally across the different size categories. It highlights the shift away from the average farmer being the typical one in the middle size category to farms more likely to be small or large. </p>
<h2>Changing agricultural industry</h2>
<p>The change in farm size distribution has several crucial implications. The first is that <a href="https://agriculture.canada.ca/en/agriculture-and-agri-food-canada/canadas-agriculture-sectors/overview-canadas-agriculture-and-agri-food-sector">the largest farms represent an increasing share of overall food production</a> in Canada. </p>
<p>While a surprising four per cent of farms have had no sales in 2021, 10 per cent of farms had sales over one million, and four per cent over two million, meaning 10 per cent of all farms now generate over two-thirds of the sales in Canada. The 70 per cent of farms with sales less than $250,000 represent less than 10 per cent of total revenue from the agricultural sector.</p>
<figure class="align-center ">
<img alt="A tractor baling hay crop in a wide open field" src="https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/478592/original/file-20220810-24-gwinsx.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Farmers bale their hay crop near Cremona, Alta., in July 2022.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jeff McIntosh</span></span>
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<p>The increase in farm size and sales can largely be attributed to the <a href="https://www.forbes.com/sites/forbesbusinesscouncil/2021/06/08/new-technologies-in-agriculture-are-increasing-farm-profitability/?sh=34be6aa12ac9">technological advances over the last 45 years</a>, which have allowed people to manage greater areas on their own. Canadian farms <a href="https://hdl.handle.net/10355/48143">have had to evolve and modernize</a> to keep up with the shifting agricultural landscape. </p>
<p>Farms now must operate in a highly competitive market with low margins, and as such have had to <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/220511/dq220511a-eng.htm">increase in both size and workforce</a> to generate sufficient returns. Other farms have adjusted by selling food products at a premium to be able to exist on a smaller scale.</p>
<h2>Supportive policy needed</h2>
<p>The changing size distribution of Canadian farms also has significant policy implications. There is <a href="https://www.country-guide.ca/guide-business/goodbye-to-canadas-average-farm/">no longer an average farmer that can be targeted</a> with extension or business risk management programs. Instead, there is an increasingly large share of farms with distinct needs, and therefore distinct policy approaches are also required.</p>
<p>For example, if local goods and rural development are the policy objectives, then consideration of smaller farms is necessary for creating comprehensive agriculture policies. However, if sustainability and competitiveness of the sector are the policy objectives, then the focus needs to be on the larger farms managing the most land and generating the most output. </p>
<p>In order to maintain its farm size diversity, Canada needs a variety of policies to support small, medium and large farms. In particular, policy-makers should seek to <a href="https://farmtario.com/news/saving-the-mid-sized-farm/">support small and medium farms without discriminating against large farms</a>, since they play a critical role in the Canadian food economy.</p>
<p>This is possible, but will require dialogue to take place between the agriculture industry and the government in order to appropriately address the stratification that has been taking place.</p><img src="https://counter.theconversation.com/content/188505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alfons Weersink receives funding from the Ontario Ministry of Agriculture, Food and Rural Affairs, Genome Canada and the Canada First Research Excellence Fund Program. </span></em></p>Mid-size farms used to be the average farm in Canada, but the increase in both small and large farms has made it difficult to define what the new average farm size is.Alfons Weersink, Professor, Dept of Food, Agricultural and Resource Economics, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1735012022-01-05T19:10:03Z2022-01-05T19:10:03ZA simple calculation can stop artificial intelligence sending you broke<figure><img src="https://images.theconversation.com/files/437491/original/file-20211214-27-6f1xq.jpg?ixlib=rb-1.1.0&rect=509%2C1252%2C4153%2C2076&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Mike is a 40-something crop farmer from southern Queensland. With a chestnut tan, crushing handshake and a strong outback accent, he’s the third generation of his family to grow sorghum, a cereal mostly used for <a href="https://grdc.com.au/__data/assets/pdf_file/0026/370592/GrowNote-Sorghum-North-0A-Introduction.pdf">animal fodder</a>. </p>
<p>But, like most farmers, Mike faces more challenges than his forbears. Climate change has eroded Australian farms’ profitability by an average of <a href="https://theconversation.com/australian-farmers-are-adapting-well-to-climate-change-but-theres-work-ahead-164860">23% over the past 20 years</a>. It’s a constant challenge to improve productivity by producing more with less.</p>
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Read more:
<a href="https://theconversation.com/farms-are-adapting-well-to-climate-change-but-theres-work-ahead-164860">Farms are adapting well to climate change, but there's work ahead</a>
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<p>After the devastating 2019 bushfire season, Mike began exploring “smart” farming techniques enabled by artificial intelligence (AI). Agriculture has been called one of the <a href="https://www.forbes.com/sites/louiscolumbus/2021/02/17/10-ways-ai-has-the-potential-to-improve-agriculture-in-2021/?sh=9d15c707f3b1">most fertile industries</a> for AI and machine learning. Mike was enthused about an AI powered system enabling him to use less fertiliser and water. </p>
<p>After months of inquiries he found a company promising its technology could reduce crop inputs by up to 80%. It involved software processing information from digital sensors placed across his fields to allow “precision farming” – tailoring water, pest and fertiliser treatment for each plant.</p>
<p>The salesperson’s pitch was compelling. But the cost to install the system was $500,000, plus $80,000 a year for data storage and processing. Support costs were on top of that.</p>
<p>Ultimately, Mike <a href="https://doi.org/10.25814/ycy6-3p65">calculated</a> the cost would offset any extra profit generated, even if the slick technology lived up to all the promises. If it delivered less, it would only help him into bankruptcy.</p>
<p>This experience – of being pitched an AI technology with big claims but questionable value – is common. It’s easy to be swayed by the promises. But new technology is not the solution to everything. For it to be worth the money for people like Mike – indeed any organisation – requires a cold calculation of its economic value. </p>
<p>In this article we provide a simple methodology to do so.</p>
<h2>Blinded by technological potential</h2>
<p>For all the focus now on how AI will revolutionise the world, hype about it isn’t new. Since the inception of practical AI techniques in the early 1960s, obsession with AI potential has led to two major “AI winters” – in which huge investments by corporations and research institutions failed to deliver promised results.</p>
<p>The first was in the 1970s, when money poured into a variety of AI systems such as <a href="https://www.goodreads.com/en/book/show/52842983-the-road-to-conscious-machines">speech recognition and machine translation</a>. The second was in the 1980s, when companies invested heavily in so-called “<a href="https://en.wikipedia.org/wiki/Expert_system">expert systems</a>” meant to do things like diagnose illnesses or control space shuttle launches.</p>
<figure class="align-center ">
<img alt="Computer scientist John McCarthy, who coined the term 'AI', at work in his laboratory at Stanford University." src="https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/437693/original/file-20211215-13-12v2u0p.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Computer scientist John McCarthy, who coined the term ‘AI’, at work in his laboratory at Stanford University.</span>
<span class="attribution"><span class="source">AP</span></span>
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<p>In both cases what the technology could do fell well short of the hype. It was not that AI was useless. Far from it. But what it could do had limited economic value. </p>
<p>The backlash set the scientific and economic advance of the technology back almost a decade both times, as funding and interest dissipated.</p>
<p>To be sure your investment in technology is worth the money, you need to guard against being swept up by the promises and possibilities.</p>
<p>As Ben Robinson, then chief strategy officer at financial software company Temenos, <a href="https://medium.com/aperture-hub/firms-need-business-model-change-not-blockchain-bc8b0b2466bb">put it</a> in 2018: </p>
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<p>we can safely predict it won’t be blockchain or APIs or AI that transform the industry. Instead it will be new business models empowered by those technologies.</p>
</blockquote>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/if-machines-can-be-inventors-could-ai-soon-monopolise-technology-165604">If machines can be inventors, could AI soon monopolise technology?</a>
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<h2>Focus on the economics</h2>
<p>The following figures outline a simple approach to focus on the economics, not the engineering.</p>
<p>Figure 1 summarises the basic economics of any investment decision. Invest if the extra profit is greater than the “opportunity cost” – the benefit you can gain from spending your money another way, or by not spending the money.</p>
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<p><iframe id="tc-infographic-626" class="tc-infographic" height="60px" src="https://cdn.theconversation.com/infographics/626/823f60978012fc14c45820b573f86f34b63aaec8/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p>Figure 1 can be hard to use so Figure 2 frames the investment decision in slightly more detailed terms using the economic concept of “marginal utility” – the additional (marginal) benefit (utility) that comes from additional expenditure. </p>
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<p><iframe id="tc-infographic-627" class="tc-infographic" height="200px" src="https://cdn.theconversation.com/infographics/627/ef5ba055fcbf50c5dd54c8ca1404aa5e7f4b30ca/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p>To make this simple to apply, Figure 3 summarises this decision-making process into a simple “decision tree”.</p>
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<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=559&fit=crop&dpr=1 600w, https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=559&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=559&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=703&fit=crop&dpr=1 754w, https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=703&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/437717/original/file-20211215-27-1f5i0cd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=703&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><span class="source">The Conversation/Author provided</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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</figure>
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<h2>Resolving Mike’s AI investment challenge</h2>
<p>Applying this methodology to Mike’s situation, we can see why he couldn’t make business sense of the pitch of AI-enabled precision farming.</p>
<p>The salesperson passed the first question by stating the gains from AI adoption would reduce Mike’s crop input costs by up to 80%. This would translate to Mike saving about $80,000 per year (in the best-case scenario). </p>
<p>The salesperson also passed the second question, with a clear statement of the system’s cost.</p>
<p>But the business case failed on the third question. The best-case marginal benefit of adopting the AI (saving $80,000 a year) was just equal to the marginal cost ($80,000 a year) – not counting the initial installation.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/artificial-intelligence-is-now-part-of-our-everyday-lives-and-its-growing-power-is-a-double-edged-sword-169449">Artificial intelligence is now part of our everyday lives – and its growing power is a double-edged sword</a>
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</em>
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<p>Putting it this way makes it clearly look like a dud investment, and that Mike didn’t have put a lot of time into deciding against it. But the fact is <a href="https://www.forbes.com/sites/tomdavenport/2020/03/27/return-on-artificial-intelligence-the-challenge-and-the-opportunity">many decisions to invest in AI</a> don’t make economic sense and the above process will make this easy to know why.</p>
<p>Using an economic framework of worth, rather than an engineering claim of possibility, is the first step to make better decisions. Doing so reduces the prospect of another AI winter, and increases the chance of real gains contributing to a more prosperous and sustainable world.</p><img src="https://counter.theconversation.com/content/173501/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Evan Shellshear is head of analytics at Biarri, a mathematical and predictive modelling company.
</span></em></p><p class="fine-print"><em><span>This article was co-authored by Brendan Markey-Towler, previously a lecturer and research fellow at The University of Queensland and now an analyst with Westpac. All three authors declare they do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article. This story is part of a series on financial and economic literacy funded by Ecstra Foundation.</span></em></p>It’s easy to be swayed by the grand promises of AI. But new technology is not the solution to everything. Do your sums first.Evan Shellshear, Industry Fellow, The University of QueenslandLen Coote, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1364142020-04-15T14:04:41Z2020-04-15T14:04:41ZPasha 62: Will South Africa run out of food during the coronavirus lockdown?<figure><img src="https://images.theconversation.com/files/328015/original/file-20200415-153313-qpdmjd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> </figcaption></figure><p>Since South Africa has been placed in lockdown to limit the spread of COVID-19, many people have been panic buying and stockpiling groceries. As a result, many of the grocery stores in the country have some empty shelves. Questions about whether South Africa will run out of food have been doing the rounds.</p>
<p>To address these questions, Professor Johann Kirsten, director of the Bureau for Economic Research at Stellenbosch University, chats to Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa. They look into food production, supply chains and the impact of the lockdown on the affordability of food for many poor people.</p>
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<p><strong>Photo:</strong>
Closeup green maize plant, agricultural background. By <a href="https://www.shutterstock.com/image-photo/closeup-green-maize-plant-agricultural-background-783722110">Victoria Field</a>/Shutterstock</p>
<p><strong>Music:</strong>
“Happy African Village” by John Bartmann, found on <a href="http://freemusicarchive.org/music/John_Bartmann/Public_Domain_Soundtrack_Music_Album_One/happy-african-village">FreeMusicArchive.org</a> licensed under <a href="https://creativecommons.org/publicdomain/zero/1.0/">CC0 1</a>.</p>
<p>“Taut” by Chad Crouch, found on <a href="https://freemusicarchive.org/music/Chad_Crouch/Ambient_Atmospheres/Taut">Free Music Archive</a> licensed under <a href="http://creativecommons.org/licenses/by-nc/3.0/">Attribution non-commercial license</a></p><img src="https://counter.theconversation.com/content/136414/count.gif" alt="The Conversation" width="1" height="1" />
Taking a look at food supply chains in South Africa during the lockdown.Ozayr Patel, Digital EditorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/800282017-07-02T13:29:48Z2017-07-02T13:29:48ZBrexit’s impact on farming policy will take Britain back to the 1920s – but that’s not necessarily a bad thing<figure><img src="https://images.theconversation.com/files/176444/original/file-20170630-8214-t8ynrm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/dudleston-shropshire-uk-10-july-2010-593289083?src=ZVZjkMOuzhBvF6tNHu7v6A-1-2">Howard Pimborough/Shutterstock</a></span></figcaption></figure><p>Not much regarding Brexit is clear. But one thing we do know is that the UK’s decision to leave the EU has triggered proposals to implement the most significant changes to agricultural policy since it joined the European Common Agricultural Policy (CAP) in 1973. </p>
<p>The CAP was designed to provide a stable, sustainably produced supply of safe, affordable food. It also ensured a decent standard of living for farmers and agricultural workers, providing support through subsidies.</p>
<p>Now, the UK’s main political parties agree direct subsidy provision has to be reviewed and fundamentally changed. The current system favours large landowners over the small and is seen by many as encouraging inefficiency in farming practices. At present, support comes in the form of a two-pillar system, one providing direct support payments, and the other giving payments which reward the farmer for conducting environmental practices through <a href="https://ec.europa.eu/agriculture/envir/measures_en">participation in agri-environment schemes</a>.</p>
<p>In its <a href="https://www.conservatives.com/manifesto">election manifesto</a>, the Conservative Party agreed to maintain all subsidy support until 2022. After that, it will move to a one-pillar system, providing payment for public goods, woodland regeneration, carbon sequestration and greenhouse gas reduction, among other things. It would shift towards a free market economy where payments would no longer directly support farming businesses without public good provision. </p>
<p>Speaking <a href="http://www.bbc.co.uk/programmes/b08tvj6v">to Farming Today</a>, environment secretary Michael Gove, said: “There’s a huge opportunity to design a better system for supporting farmers, but first I need to listen to environmentalists about how we can use that money to better protect the environment … and also to farmers to learn how to make the regime work better.”</p>
<p>Labour Party policy meanwhile aims to <a href="http://www.labour.org.uk/page/-/Images/manifesto-2017/labour-manifesto-2017.pdf">reconfigure funds for farming</a> to support smaller traders, local economies, community benefits and sustainable practices. Both major parties through their manifestos seem to agree in principle that change must – and will – come, albeit for differing reasons. </p>
<p>When combined with exit from the single market and the customs union, these policies will create an agricultural playing field pretty similar to that of 100 years ago.</p>
<h2>1921 - 1931</h2>
<p>During World War I and the post-war reconstruction, the agriculture and food ministries controlled their respective industries. This culminated in the <a href="http://www.nationalarchives.gov.uk/cabinetpapers/themes/agriculture-act-depression-subsidy.htm">Agriculture Act (1920)</a> which provided support for farmers in the form of guaranteed prices for agricultural products and minimum wages for farm labourers. But within six months of its implementation, falling prices and a struggling economy forced the repeal of the act, which returned the country to the laissez-faire economy that had existed before 1914, when there was a free market economy with little or no government involvement. </p>
<p>At this time, Labour and the Conservatives were united in their anti-subsidy approach, <a href="https://www.cabdirect.org/cabdirect/abstract/19911886010">strongly believing</a> agricultural issues should be solved in the open market.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=203&fit=crop&dpr=1 600w, https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=203&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=203&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=255&fit=crop&dpr=1 754w, https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=255&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/176450/original/file-20170630-8210-x9udhv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=255&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Green and pleasant land.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/beautiful-sunset-over-british-farm-fields-438366457?src=bSkHkg3zuvS8l8H6O9GShw-1-24">Jarek Kilian/Shutterstock</a></span>
</figcaption>
</figure>
<p>These sentiments – which eventually led to a free market period lasting from 1921-1931 – are reflected in the policies of today. The 1920s Labour Party opposed state support to farmers while land was privately owned – today, Labour wants to move subsidies away from wealthy landowners. </p>
<p>In the 1930s the <a href="https://www.cabdirect.org/cabdirect/abstract/19911886010">Conservatives stated</a>: “It is no longer national policy to buy all over the world in the cheapest markets”. Their ambition today is to: “make a resounding success of our world-leading food and farming industry; producing more, selling more, and exporting more of our great British food”.</p>
<p>However, there were some significant downsides when the Agriculture Act was repealed: agricultural wages fell by as much as 40%. Productivity fell too, rural poverty increased, small farms failed and land was abandoned through urban migration. Some described the countryside <a href="https://www.cabdirect.org/cabdirect/abstract/19911886010">as a desolate waste</a>.</p>
<h2>Future rules</h2>
<p>Not all see small-scale farm failure as bad, however. In the 1960s, agricultural economist Professor John F. Nash described farmer support as: “providing small or average farmers with what is considered a reasonable income, encouraging them to remain small or average farmers. They will remain in farms that would otherwise be unprofitable or use systems which otherwise might be too costly.” He argued that there were too many small farms and they needed to increase their output to survive without subsidies.</p>
<p>Though uncertainty remains around the precise nature of future policy, it will definitely affect the shape of agriculture in the UK. Small, unproductive farms may struggle to survive and tenancies may not be renewed. A reduction in land prices could see small farms <a href="http://researchbriefings.files.parliament.uk">bought out by larger enterprises</a>.</p>
<p>Cutting subsidies could be the best thing for Britain environmentally: it could encourage more famers to pursue sustainable practices. But in 1986, when New Zealand removed farming subsidies, it had the effect of changing farm structure from small to large-scale commercial units. This model, while viewed as a success in <a href="http://dailysignal.com/2016/09/22/what-happened-when-new-zealand-got-rid-of-government-subsidies-for-farmers/">productivity and innovation terms</a>, had a <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11511472">devastating effect on the environment</a>.</p>
<p>But, if implemented, the Conservative manifesto pledge would work very differently to the New Zealand example, providing alternatives to increased production through support to farmers for the provision of environmental services. Nothing is definite. Uncertainty ensues – and farmers can only wait to see what happens and hope that a step into the past can make for <a href="https://www.fginsight.com">a brighter future</a>.</p><img src="https://counter.theconversation.com/content/80028/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Arnott is a PhD research student at Bangor University currently working on a Welsh European Funding Office Flexible Integrated Energy Systems (FLEXIS) project. The aim of this part of the project is to, 'Evaluate the impact of policy change on farmer decision-making and carbon management.' Farmers of all types and farm size are currently being recruited to assist in the research which will be conducted over the next 2 years. Participation will involve completion of a short survey and, if interested, involvement in a series of face to face interviews to be conducted on a 6 monthly basis.
If you are interested in participating in this topical, ground-breaking research project or would like more information please contact <a href="mailto:d.arnott@bangor.ac.uk">d.arnott@bangor.ac.uk</a> or twitter @DavidArnott10 </span></em></p>Subsidies aren’t working but there are other options.David Arnott, PhD Researcher, Bangor UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/590622016-06-07T20:23:07Z2016-06-07T20:23:07ZElection 2016: the issues in non-metropolitan Australia<p>Rural and regional Australia is a big place. That’s obvious enough. Still, it’s easy to forget that the communities and industries of non-metropolitan Australia are diverse. They face a variety of challenges and often have different, if not competing, stakes in government policy. </p>
<p>But what are the issues that deserve attention leading up to the 2016 federal election? While not everyone living in rural and regional Australia will see eye-to-eye on how these issues should be resolved, I will return to this list closer to election day to see just how many have made their way onto the national political agenda.</p>
<h2>Infrastructure</h2>
<p>Government investments in transport, energy, telecommunications and water infrastructure are fundamental to the productivity of rural and regional industries. </p>
<p>Made well, these investments can enhance economic and social participation, minimise negative environmental impacts, and support adaptation to climate variability and change.</p>
<p>It follows that, when it comes to evaluating the case for public investment, one eye needs to be on the business case while the other needs to be on the potential for social and environmental co-benefits. This is where most of the issues listed below come into play. </p>
<h2>Unemployment</h2>
<p>Nationally, unemployment rates in non-metropolitan Australia are similar to those in the capital cities. However, rural and regional labour markets are volatile, with extremely high unemployment in particular locales. Place-specific strategies to assist these locales deserve consideration.</p>
<p>The loss of over <a href="https://docs.employment.gov.au/documents/australian-jobs-2015-publication">55,000 mining jobs</a> nationally since late 2012 hit a number of regional cities hard. In <a href="https://www.employment.gov.au/small-area-labour-markets-publication">Mackay</a>, unemployment rose from 11.7% to 18.9% in 2015. In <a href="https://www.employment.gov.au/small-area-labour-markets-publication">Muswellbrook</a>, it went from 9.8% to 14.9%. The sector is expected to shed another 31,900 jobs by late 2020.</p>
<p>Other non-metropolitan regions experience particularly high youth unemployment. In March 2016, <a href="http://lmip.gov.au/default.aspx?LMIP/LFR_SAFOUR">young people aged 15-24 were unemployed</a> at rates of 31.3% in western Queensland, 22.3% in Cairns, 19.7% on the NSW mid-north coast and 19.5% in the Hunter Valley. The national average for this age group was 12.2%. For all workers the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6202.0Main%20Features2Apr%202016?opendocument&tabname=Summary&prodno=6202.0&issue=Apr%202016&num=&view=">unemployment rate was 5.7%</a>.</p>
<p>Nowhere in the country, though, are unemployment levels higher than in predominantly Indigenous townships like <a href="https://www.employment.gov.au/small-area-labour-markets-publication">Aurukun, Palm Island and Yarrabah</a>. Unemployment today in these former forced relocation sites hovers above 50%. That’s nearly three times the already <a href="https://theconversation.com/eight-ways-we-can-improve-indigenous-employment-60377">high national unemployment rate for Aboriginal and Torres Strait Islander people</a>.</p>
<h2>Diversification and new economy jobs</h2>
<p>Changing workforce profiles mean that growth in the value of traditional rural and regional industries won’t necessarily solve the problem of unemployment.</p>
<p>Agricultural produce <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/0/58529ACD49B5ECE0CA2577A000154456?Opendocument">recorded an increase in value</a> between 2010-11 and 2014-15 of about 13%, or A$6 billion. Over roughly the same period, though, <a href="https://docs.employment.gov.au/documents/australian-jobs-2015-publication">agriculture, forestry and fisheries shed nearly 40,000 jobs</a>. Another 9,400 jobs are expected to go by late 2020. Innovation is driving improvements across many aspects of primary production, including labour productivity.</p>
<p>The same pattern is likely to be replicated in mining. Even if we assume a recovery in mineral and energy markets, we must equally assume that investment in labour-saving technology will continue to rise. </p>
<p>Innovations in remote sensing, ITC and robotics will enable the <a href="https://theconversation.com/robots-red-dust-and-the-future-of-mining-towns-5814">automation of more and more jobs</a> on site, favouring a concentration of operational jobs in metropolitan control centres. </p>
<p>By contrast, jobs in health care and social assistance and professional, scientific and technical services <a href="https://docs.employment.gov.au/documents/australian-jobs-2015-publication">grew 20.3%</a> nationally in the five years to November 2015. More than one-third of healthcare and social assistance employees (more than half-a-million people) are located in non-metropolitan regions. Of these, 45% work part-time and 79% are women. </p>
<p>Other human service industries, such as education and training, are also significant and growing regional employers.</p>
<p>Meanwhile, only 18% of professional, scientific and technical services employees (184,200 people) work regionally. Of these, 22% are part-time and 40% are women. </p>
<p>The national shift to professional, scientific and technical services is helping compensate for declining employment in traditionally male, blue-collar industries like manufacturing. However, the benefits of a rapidly growing professional and scientific workforce are concentrated in the major cities. This needs to change. </p>
<p>Both existing industries and industries of the future require access to high-level scientific and technical expertise. The more such expertise can be nurtured within non-metropolitan areas the better placed they will be to sustain their competitiveness, participate in the knowledge economy and diversify employment opportunities.</p>
<h2>Aboriginal and Torres Strait Islander participation</h2>
<p><a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3238.0.55.001June%202011?OpenDocument">Two-thirds of Aboriginal and Torres Strait Islander Australians</a> live in rural and regional areas. </p>
<p><a href="https://www.dpmc.gov.au/sites/default/files/publications/Closing_the_Gap_2015_Report.pdf">Closing the Gap</a> reports demonstrate little progress against commitments to do so something about the disadvantage many experience. I will focus here on two issues with particularly direct implications for economic and social participation: incarceration and native title.</p>
<p>The rate at which Aboriginal and Torres Strait people <a href="http://www.pc.gov.au/research/ongoing/overcoming-indigenous-disadvantage">were imprisoned</a> rose 57.4% between 2000 and 2013, while the rate for non-Indigenous Australians remained steady. This suggests multiple policy failures related both directly and indirectly to the criminal justice system. </p>
<p>By contrast, the last decade has also seen multiple native title determinations. More than one-third of the Australian land mass is either <a href="http://www.theguardian.com/commentisfree/2016/may/26/indigenous-australia-is-open-for-business-but-we-need-investment-to-realise-our-potential">owned by Aboriginal and Torres Strait Islander</a> peoples or has those peoples’ interests formally recognised. </p>
<p><a href="https://theconversation.com/is-the-white-paper-a-game-changer-for-northern-australia-43458">Indigenous Ranger programs</a> have proven extremely promising as means to care for these lands and create meaningful employment opportunities. The opportunity to utilise native title assets to build businesses and yet more jobs is immense. Realising that opportunity will require genuine partnerships with native title rights holders and creative approaches to investment. </p>
<h2>Health, education and social services</h2>
<p>Coupled with unemployment, inadequate access to services is a key dimension of <a href="http://ruralhealth.org.au/documents/publicseminars/2013_Sep/Joint-report.pdf">rural disadvantage</a>. </p>
<p>It is no secret that access to services such as health and education diminishes the further you get from capital cities. The cost of delivery goes up and the task of recruiting high-quality staff gets harder. </p>
<p>The situation may not be so bad in large regional centres, but in rural and remote locales it is estimated that <a href="http://ruralhealth.org.au/sites/default/files/publications/fact-sheet-27-election2016-13-may-2016.pdf">lack of access</a> to GPs, dentists, pharmacies and other primary health facilities results in about 60,000 preventable hospitalisations every year. The National Rural Health Alliance identifies access to mental health, dental health, Medicare Locals, aged care and Indigenous health as urgent priorities. </p>
<h2>Climate change</h2>
<p>Almost certainly, climate change will prove a <a href="http://www.acola.org.au/PDF/SAF07/social%20and%20political%20context.pdf">major disruptive force for agriculture</a> and other rural industries. Existing strategies for dealing with climatic variability will help land managers adapt to low levels of temperature rise. As climate change intensifies, though, they will need to consider more fundamental shifts in land use. </p>
<p>Just as importantly, global efforts to reduce greenhouse gas emissions could increase the cost of fossil-fuel-based inputs or create barriers to the sale of produce seen as emissions-intensive. </p>
<p>Rural industries will need to work with government and research institutions to reduce their emissions, adapt to changing environments and develop new income streams.</p>
<h2>Natural resource management</h2>
<p>The environmental impacts of rural land use attract consistent media and political interest. Land clearing, habitat loss, damage to iconic ecosystems, water allocations etc make regular front-page news. </p>
<p>Natural resource management policy has been most successful when it has been less about penalising land users and more about long-term collaboration in support of environmentally and economically sustainable use. </p>
<p>For several electoral cycles, however, natural resource management programs have been <a href="https://theconversation.com/another-broken-promise-budget-switches-landcare-for-green-army-26818">renamed, reprioritised and/or replaced</a>. Regardless of the merits or limitations of individual programs, rural and regional Australia needs a return to coherent and stable resource management policy.</p>
<h2>Agriculture</h2>
<p>Agriculture utilises <a href="http://www.acola.org.au/PDF/SAF07/social%20and%20political%20context.pdf">more than half the land mass</a> and contributes more to the economic vitality of Australia than most people appreciate. Despite decades of declining terms of trade and periods of intense drought, the productivity and value of agriculture have continued to outperform many other parts of the economy. </p>
<p>At the same time, however, thousands of farmers have been forced out of the industry. Fewer people than ever are taking on farming as an occupation.</p>
<p>It is no longer reasonable to expect agriculture alone to support vibrant rural and regional communities. It is reasonable, though, to position Australian agriculture to capitalise on population and income growth in the Asia-Pacific region. </p>
<p>Policy needs both an eye to this potential and a sensitivity to the very real challenges those in the sector face.</p>
<h2>To the election</h2>
<p>Already in this campaign, a handful of non-metropolitan electorates and issues have attracted attention. It will be interesting to see if former independent MP Tony Windsor can pick off Deputy Prime Minister Barnaby Joyce <a href="https://theconversation.com/from-top-dog-to-underdog-tony-windsors-fight-in-new-england-59447">in New England</a>, but the dynamics here tell us little about what is going on in rural and regional electorates more generally.</p>
<p>The Great Barrier Reef has emerged as one of the <a href="https://theconversation.com/this-election-is-our-last-chance-to-save-the-great-barrier-reef-59381">more prominent election issues</a> so far. Politicians of all hues have been visiting North Queensland to announce or defend natural resource and climate policies relevant to its health. </p>
<p>The audience for these announcements is probably more national than local. Electorates within the Great Barrier Reef catchment have lost numerous mining jobs and voters there will be just as keen to know the plan for employment growth. Can <a href="https://theconversation.com/how-will-the-barrier-reef-recover-from-the-death-of-one-third-of-its-northern-corals-60186">reef health</a> and employment growth be reconciled?</p>
<p>I’ll comment more on how these issues are playing out closer to election day on July 2. A month is a long long time in politics.</p><img src="https://counter.theconversation.com/content/59062/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stewart Lockie receives funding from the Australian Research Council and the Australian Council of Learned Academies.</span></em></p>What are the issues facing rural and regional Australia? The challenges are many and varied – and only some have made the national political agenda – but these areas deserve better than neglect.Stewart Lockie, Director, The Cairns Institute, James Cook UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/451712015-07-27T04:35:51Z2015-07-27T04:35:51ZSouth Africa’s struggling agricultural sector: what went wrong 20 years ago<figure><img src="https://images.theconversation.com/files/89643/original/image-20150724-8478-1mnz73i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A South African farmer from Piketberg 100km outside Cape Town inspects the dry soil in his field of sewn wheat. It is cheaper to import the crop than to grow it commercially.</span> <span class="attribution"><span class="source">Epa/Nic Bothma</span></span></figcaption></figure><p>South Africa’s decision to play by the global rules of free trade post 1994 put the country’s agricultural sector in a difficult position.</p>
<p>While it was expected to compete against the best in the world, the support that could have helped it was taken away. At the same time, the countries it was competing against were very supportive of the sector - some times as much as three times more. This meant that new black farmers missed out on the opportunity to catch up with farmers who had been supported previously.</p>
<p>Beyond that, there was the problem of land reform which needed to be addressed without putting the spirit of reconciliation as well as productivity at risk. </p>
<p>South Africa has limited agricultural potential and produces at relatively high cost to attain the same unit of output as most countries in the world. It is classified as a semi-arid area, meaning its rainfall is low and erratic. The country has an average annual <a href="http://www.southafrica.info/travel/advice/climate.htm#.VbI-_LPvOCh">rainfall</a> of less than 500 mm compared with the global average of 860 mm. </p>
<p>Only 12% of its 1.2 million square kilometres is suitable for agricultural <a href="http://www.tradingeconomics.com/south-africa/arable-land-percent-of-land-area-wb-data.html">use</a>. </p>
<h2>Political imperatives</h2>
<p>Although the agricultural sector had to provide food, the new democratic government also needed it to address political challenges related to rural development, social and political issues. The focus at the time was on transforming the sector to achieve these political goals rather than to prepare for global competition. </p>
<p>Looking at land ownership, this is understandable. More than 80% of agricultural land was owned by <a href="http://www.plaas.org.za/sites/default/files/publications-pdf/No1%20Fact%20check%20web.pdf">white</a> commercial farmers, yet the white <a href="http://www.statssa.gov.za/publications/LivingInSA/LivingInSA.pdf">population</a> made up about 13% of the country. Addressing the unequal and racially skewed land distribution would also contribute to overcoming the socioeconomic challenges the country faced. These included unemployment, income inequality, food insecurity, poverty and malnutrition. </p>
<p>Possibly the biggest of them all is unemployment, which has remained at <a href="http://www.statssa.gov.za/presentation/Stats%20SA%20presentation%20on%20skills%20and%20unemployment_16%20September.pdf">more than 20%</a> in this 20-year period. The majority of the unemployed are unskilled or have low skills and are affected by low and poor levels of education. The agriculture and mining sectors absorb the majority.</p>
<p>Employment in the sector has declined substantially over time. In the 1970s agriculture used to employ over 2 million people on farms alone, or about a quarter of the <a href="http://www.southafrica.info/business/economy/sectors/agricultural-sector.htm#.VbI_PbPvOCh">employed</a>. By 2014, <a href="http://www.statssa.gov.za/presentation/Stats%20SA%20presentation%20on%20skills%20and%20unemployment_16%20September.pdf">fewer than 700,000</a> were employed on farms, less than 5% of the employed.</p>
<h2>Tracing the problem</h2>
<p>Within a year of the democratic government coming into power it had to accede to the World Trade <a href="https://www.wto.org/">Organisation</a> (WTO). This meant that South Africa entered into an agreement that exposed its economy to global competition and had to play by global rules, both at home and internationally. </p>
<p>Other agreements were <a href="http://www.thedti.gov.za/trade_investment/ited_trade_agreement.jsp">signed</a> with the European Union (EU) and southern African countries. Some are still being negotiated.</p>
<p>The direction taken by the new government was contrary to the stance adopted by the apartheid government which protected and supported white South African businesses. The agricultural sector was a beneficiary through various forms of support. This included direct subsidies or through institutions such as commodity boards. The boards were responsible for regulating and supporting commodities through price setting, inputs, throughput and final products.</p>
<p>But the support was a burden to the national fiscus. To reduce costs the new government got rid of the boards. The government would not have managed to finance 60 000 white commercial farmers only, while there were an estimated 3 million smallholder farmers who have not received support from the pre-democratic government. To balance the scales, it was more convenient to remove most of the support than to expand it. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89644/original/image-20150724-8478-yhyetf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Black farmers like Koos Mthimkhulu have not received sufficient support.</span>
<span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span>
</figcaption>
</figure>
<h2>The consequences</h2>
<p>Two decisions - accession to the WTO and deregulation - put the sector in a very difficult position. In terms of job creation the sector has performed poorly. In addition, its contribution to <a href="http://www.statssa.gov.za/?page_id=735&id=4">GDP</a> has shrunk to less than 3% of GDP from 4.6% in 1994. </p>
<p>Land redistribution has also not succeeded. <a href="http://www.plaas.org.za/plaas-publication/FC01">Only 7.5%</a> of he land targeted for black people has been transferred. </p>
<p>The problem with this failure is that it has led to radical proposals that could lead to outcomes similar to those experienced in <a href="http://www.hrw.org/reports/2002/zimbabwe/ZimLand0302-02.htm">Zimbabwe</a>. </p>
<p>There has also been very declining government contribution to research & development and an intensive extension service. The R&D gap has been partly filled by the private sector.</p>
<p>While international market access has improved and there is evidence of global competitiveness, domestic competition has become much tougher. Examples of this include the influx of poultry <a href="http://qz.com/394335/the-united-states-is-bullying-south-africa-into-buying-its-cheap-unwanted-chicken/">products</a>, frozen potato <a href="http://www.itac.org.za/news-headlines/itac-in-the-media/frozen-potato-chips-heat-up-trade-war-between-sa,-european-union">chips</a> and increasing <a href="http://www.indexmundi.com/agriculture/?country=za&commodity=wheat&graph=imports">wheat</a> imports. </p>
<p>Hectares planted for <a href="http://www.csa.gov.et/index.php/2013-02-20-13-43-35/national-statistics-abstract/129-2003-agriculture-statistics-abstract">wheat</a> are now one third of what they were in the late 1980s. This is because it is cheaper to import wheat than to grow it. The same is true of cotton. In the early 1990s, more than 100 000 ha used to be planted for <a href="http://www.csa.gov.et/index.php/2013-02-20-13-43-35/national-statistics-abstract/129-2003-agriculture-statistics-abstract">cotton</a>. Now only one tenth of that is planted because cheaper products can be imported. </p>
<h2>Some positive outcomes</h2>
<p>Despite the limited agricultural potential and resource scarcity, South Africa has managed to make substantial improvements in many areas. It remains one of the main exporters of agricultural products to the most lucrative markets in the developed world. It exports citrus, wool, avocados and nuts to the US and horticultural products, wine and tea to the EU.</p>
<p>South Africa has also found new markets. Its biggest trading partners are now in Africa, overtaking the EU which used to dominate most facets of trade.</p>
<p>There has also been more diversification in terms of products such as soybeans. These are in high demand globally and investment is increasing to support production. Production has been increased with the use of fewer hectares due to technology adoption and the planting of genetically modified <a href="http://www.engineeringnews.co.za/article/south-africa-leads-continent-in-terms-of-gmo-crops-2015-02-24">organisms</a>.</p>
<p>Government played an instrumental role by opening up markets, creating the environment and adjusting policies to allow the private sector to take advantage of opportunities. It also opened up market access beyond what was required by the WTO.</p>
<h2>Policy concerns</h2>
<p>Some of the contributors to the sector’s poor performance have been policy implementation and the panic these have caused among farmers. Land reform is one policy area that will need to be designed and implemented better. </p>
<p>There are other government programmes which were pursued with the aim of transforming the sector, but the implementation, evaluation and monitoring have been very poor. Support of smallholders and black farmers was inadequate and was without mentorship. </p>
<p>Technology transfer/adoption and extension services were either poor or non-existent in many areas. And some national policies are not helpful to farmers to compete in global terms because the custodians are separate government departments. Even if these issues were addressed, South Africa will remain a high-cost producer which presents its own set of challenges.</p><img src="https://counter.theconversation.com/content/45171/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mmatlou Kalaba receives funding from National Research Foundation (NRF).</span></em></p>South Africa’s agricultural industry has struggled over the past 20 years due to the country’s rush to liberalise the sector while other countries continued to support their farmers.Mmatlou Kalaba, Lecturer in Agricultural Economics, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.