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Why size matters for farmers

Author: Stephen Greenberg

In his State of the Nation address last month, President Jacob Zuma announced government plans to impose a land ceiling of 12 000 hectares on agricultural land. Landowners immediately responded by arguing that this will threaten food security because a few large farmers produce the bulk of the country’s food.

It is true that South Africa has a very concentrated agricultural production structure, with a small core responsible for a large share of commercial production. According to Frikkie Liebenberg, an agricultural economist at the University of Pretoria, 237 commercial farm units accounted for 33% of total agricultural income in 2007 and 2 330 farm units accounted for 53% of gross agricultural income in 2005.

These statistics are drawn from the most recent available and, by all accounts, concentration has increased since then. The imposition of a land ceiling is a response precisely to the extent of concentration in landholdings and production, as Zuma himself said in response to the objections from landowners.

There is a valid argument that a uniform land ceiling across the country does not make sense, because productive land sizes vary by agroecological context. High-value fruit and wine farm units in the Western Cape may occupy relatively little land, whereas large sheep and cattle farms in the Karoo and Northern Cape may struggle to break even.

On the other hand, land is hardly even a factor of production for the huge industrial poultry operations, or the enormous cattle feedlots through which more than 75% of commercial beef production passes.

 

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