Unlocking Opportunities of Smallholder Farms in South African Agriculture
Smallholder farms play a significant role in South Africa’s agricultural landscape. Despite facing numerous challenges, small-scale farmers hold tremendous potential to drive positive change in the country’s economic state while fostering regenerative and sustainable agricultural practices.
As an organisation dedicated to promoting sustainable solutions, RegenZ recognises the transformative power of smallholder farms in South Africa. This guide aims to shed light on the importance of supporting these farmers.
What's in this guide?
What are smallholder farms?
Smallholder farms refer to small-scale agricultural operations, usually family-owned and operated and managed by individual farmers or families. Smallholder farmers often cultivate a diverse range of crops, including maize, vegetables, fruits, and livestock. These farms typically cover relatively small areas of land and are characterised by limited resources, including land, capital, and equipment. Despite these constraints, smallholder farming plays a crucial role in the agricultural sector of South Africa, contributing to food production, rural livelihoods, and poverty alleviation.
How many smallholder farms are in South Africa?
What practices are used by small-scale farmers?
Although small-scale farming practices can vary depending on the region, climate, resources, and specific farming objectives of individual farmers in South Africa, here are some common practices used by small-scale farmers to manage their farms and sustain their agricultural activities.
- Crop rotation: Small-scale farmers practise crop rotation to maintain soil fertility and reduce the risk of pests and diseases. By rotating different crops in a planned sequence, they can optimise nutrient utilisation and minimise soil degradation.
- Agroecology: Many small-scale farmers in South Africa adopt agroecological principles to promote sustainable farming. This approach emphasises the integration of ecological principles into agricultural systems, such as natural pest control, soil conservation, and biodiversity preservation.
- Conservation agriculture: Conservation agriculture techniques, including minimal soil disturbance, crop residue retention, and diversified cropping systems, are employed by small-scale farmers to improve soil health, water conservation, and overall farm sustainability.
- Water management: Given the water scarcity challenges in some parts of South Africa, small-scale farmers implement various water management practices. These may include rainwater harvesting, drip irrigation, mulching, and efficient water use to optimise water resources and minimise wastage.
- Organic farming: Sometimes by default, sometimes intentionally, many small-scale farmers in South Africa practise organic farming, avoiding the use of synthetic pesticides, herbicides, and genetically modified organisms (GMOs).
- Intercropping and companion planting: Small-scale farmers often engage in intercropping and companion planting to maximise land utilisation and enhance pest control.
- Livestock integration: Many small-scale farmers integrate livestock into their farming systems. They may keep cattle, goats, chickens, or other animals, utilising their manure for organic fertilisation and integrating them into crop rotations or grazing systems for better land management.
- Farmer cooperatives: Small-scale farmers in South Africa often form cooperatives or join farmer organisations to collectively address challenges, pool resources, share knowledge, and access markets. These collaborations can enhance their bargaining power, increase access to finance and resources, and promote knowledge exchange among farmers.
- Traditional knowledge and indigenous practices: In some areas, small-scale farmers in South Africa continue to employ traditional knowledge and indigenous practices that have been passed down through generations. These practices are often adapted to local conditions and incorporate cultural and ecological wisdom.
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Why is small-scale farming important?
Smallholder farms in South Africa are an essential component of the country’s agricultural landscape, and the smallholder farming sector in South Africa holds immense promise for driving economic growth, reducing poverty, and promoting sustainable and regenerative agriculture. While they may face various challenges, such as limited access to markets, financial constraints, and inadequate infrastructure, smallholder farming plays a vital role in ensuring food security and promoting sustainable agriculture practices.
- Smallholder farms provide employment opportunities for rural communities, alleviating poverty and reducing unemployment rates.
- By generating employment and income, smallholder farming helps improve livelihoods in rural areas. Increased income levels enable families to access education, healthcare, and other basic necessities, ultimately contributing to poverty reduction
- Smallholder farmers play a critical role in ensuring local food production, feeding over half of the global population.
- Their diversified farming practices, including the cultivation of staple crops and the rearing of livestock, contribute to a more resilient food system.
- By producing food within the local community, smallholders reduce dependence on external sources, improving food security.
- Smallholder farmers often prioritise traditional and indigenous crops, promoting dietary diversity and addressing malnutrition.
- Many smallholder farmers employ sustainable agricultural practices, such as agroecology and organic farming methods. These practices promote soil conservation, water management, and biodiversity conservation, contributing to the long-term sustainability of agricultural systems.
What are the challenges facing small-scale farmers in South Africa?
Smallholder farmers in South Africa face several challenges, the most pressing of which is generally limited access to credit and financing options, along with market access.
Access to capital is crucial for smallholders to invest in their farms, purchase inputs, and improve productivity. However, due to financial constraints, many smallholder farmers struggle to access loans or other financial services. Limited financial resources often hinder their ability to invest in farm inputs, modernise equipment, and adopt improved farming techniques.
Smallholder farmers in South Africa also frequently encounter difficulties in accessing markets for their produce. The lack of efficient transportation infrastructure, market information, and bargaining power can limit their ability to sell their goods at fair prices. Without efficient means to transport and sell their produce, smallholders face difficulties in reaching consumers and obtaining fair prices for their goods.
Other challenges faced by smallholder farmers
- Limited access to land and resources: Smallholder farmers often struggle to secure sufficient land for farming due to urbanisation, competing land-use demands, and land tenure issues.
- Limited government support and policy frameworks: The absence of comprehensive policies and adequate government support tailored to the specific needs of smallholder farmers hinders their development. Insufficient access to credit, technical assistance, and extension services restricts their ability to adopt modern farming techniques and technologies.
- Poorly managed organisations and government-funded supply chains: These organisations may suffer from inefficiencies, lack of transparency, and corruption, which can hinder the farmers’ ability to receive fair prices for their produce. Inadequate management and oversight in the supply chains can lead to delays, post-harvest losses, and lower incomes for smallholder farmers.
Major constraints faced by smallholder farmers
Research from an Africa.connected policy paper highlights that smallholder farmers in Africa are hampered by:
- Political instability
- Economic uncertainty
- Climate change
- Limited access to information, markets, capital and even basic inputs like fertilisers and seeds
Other literature identified that the constraints to value addition operate mainly at the primary production level.
- Lack of access to finance and rising input costs
- Government budget cuts in vital support functions such as extension services and research and development
- Lack of appropriate technology
- Dearth of technical and entrepreneurial skills
- Lack of knowledge and skills in agro-processing and food quality standards required by markets
- Lack of access to information about technology and markets
- Bottlenecks in the supply of raw materials like oil and grain
- Food trade policy misalignment with partner countries
- Dumping of food products by trading partners, effectively destroying the domestic food value chain
- Poor soil quality
- Inherited practices that degenerate the soil
What can government do to support small-scale farming?
South Africa’s government has recognised the potential that value addition has to improve small-scale agriculture and, in turn, national food security. As such, the government has implemented several programs to support smallholder farmers. These include financial assistance schemes, agricultural training and extension services, and initiatives to improve access to markets and infrastructure.
Examples of government subsidies
- In 2021, about R1.2 billion was allocated to the agriculture and food sector budget to support smallholder farmers through various initiatives related to value addition.
- The Department of Agriculture, Forests and Fisheries budgeted about R5.6 billion between 2018 and 2021 to support 145,000 black commercial, subsistence and smallholder producers with production inputs and farm infrastructure.
- The Micro Agricultural Financial Institutions of South Africa scheme has existed since 2004 to address the financial services needs of smallholder farmers and agribusinesses. It lends money at lower than market rates.
While it can be challenging to quantify the return on these subsidies, there have been several initiatives that have demonstrated positive outcomes. Some projects include:
Market Access Initiatives
Enhancing market linkages is crucial for smallholder farmers to secure fair prices for their produce. Projects like the Smallholder Horticulture Empowerment and Promotion (SHEP) and the National Red Meat Development Programme (NRMDP) have facilitated market access for small-scale farmers, enabling them to reach broader markets and generate higher incomes.
Agricultural Infrastructure Development
Strengthening agricultural infrastructure, such as irrigation systems and storage facilities, is vital for smallholders to optimise their production and minimise post-harvest losses. Initiatives like the Accelerated Community Infrastructure Programme (ACIP) have focused on improving infrastructure in rural areas, benefitting smallholder farmers and their communities.
The South African government has taken steps to support small-scale farmers and integrate them into the agricultural economy. However, a recent study found limited participation of these farmers in agro-processing, highlighting the need for improved access to information, technology, skills, and markets. Value addition in the food industry is crucial, but policies have not significantly contributed to this at the national level. Challenges include inadequate access to finance, rising input costs, lack of appropriate technology and skills, and insufficient knowledge of agro-processing and quality standards. The study suggests that the government should reconsider its funding policy, prioritise programs enhancing access to information and technology, and align food trade policies with partner countries. Agriculture plays a critical role in Africa’s economic growth.
Traceability of funding
In order to prevent the ‘black hole’ of funding and ensure accountability, traceability plays a crucial role in government efforts to support smallholder farmers in South Africa. Implementing robust traceability systems allows for transparency and oversight throughout the financial assistance schemes and programs provided to small-scale farmers. By establishing traceability mechanisms, the government can track the flow of funds from their allocation to the beneficiaries, ensuring that the financial assistance reaches its intended recipients. This helps prevent mismanagement, corruption, and the diversion of funds, ultimately safeguarding the interests of smallholder farmers and promoting the efficient use of resources. Better traceability also enables the government to evaluate the impact of its support programs, identify areas of improvement, and make informed decisions based on reliable data.
Other digital traceability systems can be extended beyond financial transactions to include the tracking of inputs, such as seeds and fertilisers, and the traceability of agricultural products throughout the value chain. This enhances food safety and quality assurance, strengthens market access for smallholder farmers, and builds consumer confidence in locally produced goods.
NGOs and private sector organisations are playing a crucial role in filling the gaps in government support for smallholder farmers. These collaborations contribute to the holistic development of smallholder farmers and the promotion of sustainable agricultural practices. Here are some of the non-governmental programmes supporting smallholder farming in South Africa:
Siyazisiza’s Small-holder Farmer Enterprise Development Initiative
Siyazisiza’s Small-holder Farmer Enterprise Development Initiative empowers small-scale farmers to optimise formal market opportunities and overcome barriers that typically exclude them. This market-driven initiative involves active engagement with the market and the establishment of supply agreements. Siyazisiza's social enterprise, Community Farmer Network, represents small-holder farmers in securing these agreements. Subsequently, a program is designed to provide necessary resources and capacities to farmers and other stakeholders along the value chain, enabling them to fulfil the agreement's terms. The initiative encompasses various strategies, including income generation, asset utilisation, investment choices, and asset and income preservation.
World Wildlife Foundation (WWF)
The World Wildlife Foundation (WWF) is promoting, capacitating and supporting rural smallholder farmers to commit to climate-smart farming practices and access trading and alternative markets. WWF trains farmers and promotes collective stewardship in conservation-worthy landscapes, improving market access through incentives. They focus on high biodiversity areas and strategic water sources. The climate smart farming approach shifts away from unsustainable practices towards multi-cropping, water conservation, and protecting natural resources. This requires policy, finance, and technology solutions for climate adaptation, particularly for smallholder farmers. Climate smart agriculture includes integrated land use planning, minimal soil disturbance, rotational grazing, and rainwater harvesting while reducing greenhouse gas emissions.
Lima Rural Development Foundation
The Lima Rural Development Foundation is a non-profit organisation that aims to address the challenges faced by smallholder farmers. They work towards empowering farmers by providing training, capacity-building, access to resources, and market linkages. To address the systemic challenges faced by smallholder farmers, Lima Foundation also engages in advocacy and policy initiatives. They collaborate with stakeholders, including government agencies and policymakers, to raise awareness of the needs and potential of smallholder farmers. Through policy dialogue and research, they strive to influence the development of supportive policies and programs for smallholders.
Collaborative efforts: Government and stakeholder involvement
While there have been limitations in government support for smallholder farmers, it is crucial to acknowledge the ongoing collaborative efforts among stakeholders. Recognising the significance of smallholder farming, government agencies, NGOs, and private organisations are increasingly working together to address the challenges and create an enabling environment for smallholders to thrive.
However, it is crucial for government agencies and other stakeholders to strengthen their support for smallholder farming. By developing comprehensive policies, providing targeted financial assistance, improving infrastructure, and engaging in collaborative efforts, South Africa can harness the full potential of smallholder farming, ultimately benefiting rural communities, ensuring food security, and contributing to the nation’s agricultural development.
Digitalisation for Africa’s smallholder farmers
Technology plays a vital role in increasing productivity, yields, and income for all players in Africa’s agriculture story. Digitalisation and innovation in agriculture are crucial for addressing food security concerns and mitigating the effects of climate change. According to Agrilinks research, digital innovations have already transformed the lives of smallholder farmers in Africa, increasing yields by up to 70% and incomes by 40%.
Digital platforms connect farmers with essential services such as finance, insurance, and buyers, improving productivity and reducing costs. Access to digital resources also allows farmers to plan better against extreme weather events, access market information, and reach a larger marketplace.
Although the use of these digital farming services is growing at about 45% each year, scaling digital solutions and overcoming challenges like limited connectivity, expensive devices, lack of training, and government support are necessary for widespread adoption. Public-private partnerships, investments in infrastructure, reducing device costs, and building digital confidence among farmers are key to accelerating digital transformation in Africa’s agriculture sector.
The potential of smallholder farms in South Africa
Smallholder farms offer multiple benefits to South Africa, ranging from poverty reduction and rural development to food security and economic growth. By empowering small-scale farmers, the country can achieve inclusive agricultural practices, equitable distribution of wealth, and reduced dependence on food imports. Moreover, supporting smallholders can lead to job creation, improved access to education and healthcare, and the preservation of cultural heritage.
Opportunities in industrial hemp production and Hybrid True Potato Seed (HTPS) farming
RegenZ is specifically interested in exploring opportunities for collaboration in regenerative hemp production and hybrid true potato seed farming. These emerging sectors offer exciting prospects for sustainable agriculture and economic growth. Industrial hemp, with its diverse applications in textiles, construction, and health products, presents an opportunity for smallholder farmers to diversify their income streams. Similarly, hybrid true potato seed technology can revolutionise potato farming by offering improved yields, disease resistance, and reduced reliance on traditional seed potatoes.
Fostering collaboration and innovation in South Africa's smallholder farming
Smallholder farming in South Africa holds immense potential for job creation, poverty reduction, and food security. RegenZ invites individuals and organisations involved in these spaces to join hands in fostering collaboration, knowledge sharing, and investment. RegenZ aims to contribute to this transformative movement by exploring opportunities in industrial hemp production and hybrid true potato seed farming. By working together, it is possible to unlock the potential of industrial hemp and hybrid true potato seed farming, thereby benefiting smallholder farmers and contributing to South Africa’s sustainable development goals. Through collective action and sustained support, smallholder farming can truly thrive, creating a brighter future for South Africa’s agricultural sector and its rural communities.
Learn more about the trials we’re currently running to test our Smallholder Farmer Starter Package.