as Chairman, presented the Report of the Select Committee on Posts and Telecommunications.

Report, proceedings and evidence to be printed and considered.

Mr. Chairman, I should like to open this debate by referring to a particularly important subject, i.e. the prevailing drought. I am sure that great interest will be taken in what is said about it on this occasion. Therefore I shall do everything in my power to plough this furrow as straight as possible so that we may cultivate this field as well as we can.

I am fully confident that hon. members will join me in considering this very great problem in a calm and responsible atmosphere. Of course, we sympathize deeply with those who are still suffering under these extremely adverse agricultural conditions. At the same time, we are very grateful for the wonderful rain which is falling over the Western Cape. It gladdens one’s heart and will certainly have an effect on this debate as well.

The severe drought with which South African agriculture has to contend at the moment is a subject which has been discussed for many months. Therefore I think that on an occasion such as this one, I should state certain standpoints of the Government in this House, especially with regard to the economic circumstances and the way in which agriculture in general affects the South African economy. In the first place, it is generally recognized, and it has been proved scientifically as well, that this is one of the most extensive and severe droughts in our history. At the moment there are 126 districts in South Africa which have been declared drought-stricken areas. So the implications, consequences, nature and extent of this drought are far-reaching. It differs from normal droughts, and therefore it is a drought condition which calls for special measures.

In the second place, the extent of this drought is such that our natural resources have been seriously affected. It has been scientifically ascertained that after every drought, our natural pasturage stabilizes at a much lower level. We must realize, therefore, that our natural pasturage suffers severely in this process. With regard to our livestock, I want to point out that normally, less than 20% of the animals slaughtered are female animals. The situation has developed to the point where at the moment, approximately 25% of the animals slaughtered will have to be female. So we are slaughtering the increment of our herds as it were.

Of course, our water resources and, last but not least, our human resources are also being seriously affected by this drought. This is because such an extremely severe drought is bound to have a demoralizing effect, especially on the South African farmer, because he is after all the entrepreneur in this industry. I believe that it will require many years of favourable agricultural conditions to enable farmers to recover from the present drought. Therefore it will to a very large extent depend upon the particular qualities of the farming community of South Africa, its perseverance, its faith and its loyalty to South Africa. Therefore the South African farmer not only has the task of steeling and rehabilitating himself economically and spiritually in order to survive, but also the responsibility to survive in the national interest. So the relief measures which have been introduced have not only been introduced for the benefit of the South African farmer, but in the interests of the entire country and of its total economy.

Therefore I wish to appeal in all humility to the consumers and to all sectors of the South African community to show an understanding of the situation in which South African agriculture, and the South African farmer in particular, find themselves. The fact that the hon. the Prime Minister himself announced the drought relief measures proves the serious light in which the Government views this matter. Of course, it is in times such as these that it will once again be proved that the old existing agricultural institutions have an extremely important role to play. In this respect we think, for example, of the Land Bank, the Department of Agriculture, as well as the control board system, which is once again being highlighted and which is being criticized by some people. Then there is the co-operative movement. It is often said these days that in the light of the modern development of agriculture—and please note that we have a modern agricultural industry in South Africa—some of these institutions have now become unnecessary. As a result of the large number of variable factors with which we are faced in agriculture, and the risks which the South African farmer has to contend with, I believe, these risks have increased rather than decreased, and these existing institutions must continue to play an important role in South African agriculture.

I want to repeat what I have said before, namely that as long as I have the confidence of the hon. the Prime Minister in occupying this position, I shall not allow the farming community in South Africa to be handed over to monopolies. I believe that we have learned a very costly lesson in South Africa, especially during the depression and drought of the ’thirties. Then we had the situation that when circumstances returned to normal and the farmers began to produce again, there was no market for their products. This led to a chaotic state of affairs. Fortunately, we do not find ourselves in this position today, because we have a proper Marketing Act, of course.

The danger also exists, of course, that when the financial need of the farmer is at its greatest, other financial institutions can often be expected to withdraw from agriculture. This is only logical. Therefore it is in times such as these that the State, through the agency of the Financial Assistance Division, the agricultural co-operatives, which belong to the farmers themselves, the Land Bank, etc., will to a large extent have to bear the risk of providing further financial assistance to the farmer. The department, in co-operation with organized agriculture, as well as all its affiliations, embarked on an intensive investigation in December 1982 in order to ascertain the precise extent of these severe drought conditions. The drought situation is being evaluated on an on-going basis. The relief measures which are in effect at the moment, therefore, were developed in consultation with the South African farmers. It is a joint effort by the department and the farmers of South Africa, and it will also be implemented in consultation with the South African farmer. Therefore we are proceeding from the standpoint that the relief measures we have provided are not inflexible. They are subject to adjustments in the light of changing circumstances.

I also wish to express my thanks and appreciation on this occasion to the S.A. Agricultural Union for its very positive co-operation with the Department of Agriculture. I know that they worked many nights to process memoranda and to consolidate them into a proper blueprint. The work done by Dr. Jacobs and his committee also deserves our special thanks. We know that they also worked right through the night, because they had to produce a recommendation in a very short space of time, in an attempt, as hon. members will understand, to neutralize the increasingly demoralizing effect of this drought on the farming community of South Africa. People want to know what the position is. They know what the standpoint of the Minister and the Government is. We thank this committee for the good work it has done.

However, it is also necessary for me to spell out certain basic objectives of the aid programme very clearly. The aid programme is not primarily aimed at compensating farmers for their crop losses and operating expenditure. This is very important. The reason for this is that agriculture in South Africa must be seen as a viable and healthy industry. I think it is of vital importance to the South African economy that we should fully grasp this point. The aid programme is aimed, therefore, at enabling farmers to recover financially from the drought damage and therefore to remain in agriculture. Of course, there are additional problems, which I want to mention briefly. The agricultural industry has also been very adversely affected by inflation in this country as well as by recessionary conditions abroad. Our export industries in particular have been adversely affected by these factors. When the drought is added to this, one sees the economic situation in which the industry finds itself. I am saying that it is for this reason that the aid programme should be of such a nature that it will protect the creditworthiness of the farmers and that it should enable them to repay their debts over a longer term than is customary. Therefore it is basically a self-help scheme.

The total capital assets invested in agriculture at the moment—i.e. land and improvements—amount to R33 325 million. Viewed in its totality, therefore, the agricultural industry is not a brankrupt industry or an industry in which people are being spoonfed with State aid in an injudicious manner. So there can be no doubt about the creditworthiness and the viability of this industry in future. It is under these particular circumstances, therefore, that very serious consideration will have to be given to two matters which I want to mention very specifically. The first of these—and to the farmers of South Africa this is the most important of all—is the cost of inputs; and the second is the sensitivity of interest rates. Especially under these particular circumstances, where one is protecting the creditworthiness of the South African farmer and spreading his debts over a longer term, hon. members will realize that agriculture has now become more dependent on external financing. For this reason, interest has become a very important input cost in agriculture. It is also in this connection that the hon. the Minister of Finance has already announced that Land Bank interest rates will be lowered as from April 1983; and, furthermore, that the Land Bank, as the most important agricultural financing institution, will restructure its financing procedure, after consultation with organized agriculture, in the light of prevailing circumstances. I may refer, for example, to section 34 loans, which should henceforth play an important role in providing operating capital to individual farmers. I may also refer to negotiations which are taking place with the co-operative movement about the making available of production credit to five-stock producers.

One of the things we have found is that the financing system is much more concentrated on the field husbandry sector and is far more easily applied there. We feel that in this connection we should examine the financing system with regard to livestock production.

As Minister of Agriculture, I suppose it will not be inappropriate for me to convey my thanks and appreciation on this occasion to the managing director and the board of the Land Bank for effective liaison and consultation with the Department of Agriculture. The hon. the Minister of Finance has taken steps to amend the Land Bank Act to bring it into line with the current financing requirements. We thank him sincerely for his approach and understanding. We understand that the percentage of successful applications has risen from 60% to around 90%. So there is a flow of capital through the Land Bank to the agricultural sector which we find encouraging.

There is yet another very important financing institution in agriculture, and this is the agricultural co-operative, which, as everyone knows, is a farmer’s organization. Agricultural co-operatives will to an increasing extent have to serve as financing media and institutions for the financing of farmers. The co-operatives themselves have therefore become big borrowers of Land Bank funds which they have to allocate to farmers in their turn. I think this is a very sound system, because the co-operative, with its knowledge of the member’s production, is the institution which is able to channel the funds in such a way that they can be properly utilized.

We shall have to examine the co-operative movement in South Africa in future. As a result of this situation, their reserve funds have been greatly depleted, and we shall have to take measures of some kind to enable the co-operatives to build up their reserves again. The Government saw fit, after many years of argument, to take a decision in this connection. As hon. members know, the co-operative movement used to be exempt from the payment of tax. It was then agreed that the movement would have to pay tax just like any company. Nevertheless, I want to say that in my opinion, it has become more difficult for agricultural co-operatives, as a result of this decision, to build up reserve funds. I think this is a matter which we shall have to investigate. In saying this, I am not suggesting that the levying of tax on agricultural co-operatives should be abolished; I am simply saying that we should examine the system in order to improve the ability of the agricultural co-operatives to build up their reserve funds again.

Our policy of primarily protecting the creditworthiness of farmers by consolidating debts at the Land Bank, the agricultural cooperatives and the Agricultural Credit Board, and by keeping the interest rates as low as possible and adjusting redemption periods in the light of specific production circumstances, will in the first place cause funds to be diverted from the commercial banks to these three financing institutions. I do not think there can be any doubt about that. Secondly, the demand for funds made on the Land Bank, the agricultural co-operatives and the Agricultural Credit Board will increase enormously in years to come. We need not have any doubt about that either. Now I do not wish to detract in any way from the role which the commercial banks have played in financing the farmers. On the contrary, they can and I hope they will continue to play a very important role in agricultural financing in future. We find that the prime lending rate of the commercial banks has dropped from 20% in 1982 to the present level of 14%. In the process, however, the interest rates paid by farmers on their overdrafts at commercial banks have been only minimally reduced from the maximum rate of 22% which prevailed in 1982. In the light of the bigger margin, or the difference which exists at the moment between the prime lending rate of the commercial banks and their permissible maximum lending rate, I should like to appeal to the banks in all humility, to show an understanding of the problems faced by the farmers and to bring their lending rates for the farmers into line with the general drop in short-term interest rates. In this way, commercial banks could also participate in this comprehensive aid programme which we have designed for agriculture. I think that in the longer term, it will also be in the interests of the banking industry in general if the banks can be involved in this aid programme.

Of course, the aid programme which has been introduced also provides for the less creditworthy fanners, especially young farmers. The implementation of this programme is the function of the Financial Assistance Division in particular, and specifically of the Agricultural Credit Board. That Board is responsible for the administration of funds used for this purpose, and one of its functions is to ascertain requirements in an ongoing basis and to make the necessary adjustments in this connection. However, this is a matter which is being handled in an extremely competent way by the Deputy Minister, and I hope he will enlarge on possible policy adjustments in this connection in the course of this debate.

The Government fully recognizes that the aid measures which have been introduced to help the farmers in the drought-stricken areas to survive economically and to place agriculture on a sound footing again must not be regarded as the final solution to the longterm problems in agriculture. Indeed, the Government does not regard it as the final solution. There are other problems, too, which are having a serious effect on agriculture. I want to point out a few of these. The most pressing one is undoubtedly inflation. It affects the profitability of agriculture just as it affects the profitability of all other industries. It affects the size of the farming units and it affects one’s ability to compete in the export market.

Secondly, it is a well-known fact that there has been an enormous rise over the past five years in the cost of inputs in agriculture. Nor can this be recovered from produce prices. I want to quote a few figures in this connection. Between 1978 and 1983, the price of fuel rose by 37% a year on average, fertilizer by 17%, fodder by 29% and tractors by 21,94%. The increase in the cost of total farming requirements over the five years up to April 1983 was 22,59%.

Furthermore, we must take into consideration the fact that as a result of the drought conditions, agriculture has become more dependent on external financing, and that interest rates have therefore become a very important cost input. We shall have to keep a close watch on this. Fourthly, the effect of the protection policy on the rising cost of agriculture inputs is another matter to which the Government is giving serious attention at the moment. The Minister of Industries, Commerce and Tourism is already taking certain steps in this connection. He has already made certain announcements in respect of the canning industry and the wool industry, with a view to supporting these industries by means of export incentives. In the same way, the various export industries will have to be examined. In a normal production year, the maize industry is a very important earner of foreign exchange. After lengthy talks with Nampo, the maize industry was also referred to the Jacobs Committee for investigation, and we hope to receive a report in this connection by August. We shall see then how we have to structure the industry in order to adapt it to production circumstances.

Fifthly, in the light of income and production losses suffered by farmers as a result of the drought, it will again be necessary to give very careful consideration to the formulation and implementation of income-stabilizing measures. I want to mention a few of these measures. In this connection we are faced with great challenges. These include aspects such as the possible creation of tax reserves in conjunction with the existing levelling system. The hon. the Minister of Finance has made announcements in this connection. Farmers can already invest the money received from the sale of livestock with the Land Bank at an interest rate of 11%. This is a very good measure and we shall have to see whether we can build up reserves for the farmers and for agriculture in this way in future and how effective it will be.

It also includes the rising cost structure with which agriculture will continue to be faced and the requirement that modernized production systems should buy a greater percentage of their input, which naturally increases the risk attached to farming activities. It is interesting to note that 10 years ago, agriculture bought 60% of its inputs. As a result of more modern production methods, such as chemicals used in producing crops, the inputs which agriculture has to buy have risen to 80%. In other words, agriculture is being integrated more deeply into the total economy, which involves a greater degree of risk.

Another factor is that in order to maintain a sound structure in agriculture, especially with a view to young fanners entering the industry, the existing financing system in the Financial Assistance Division of the Department of Agriculture will have to be expanded and adapted. This could have an enormous effect on the structure and population of the rural areas. It is a well-known fact in agriculture that as soon as conditions are favourable—I want to say this quite frankly—the bigger farmers start buying out the smaller farmers. We shall have to give attention to this situation. We shall have to create the financing ability by means of our Financial Assistance Division to enable the smaller, and especially the average, farmer to remain on the land.

Hear, hear!

This should be accompanied by the continuation and expansion of research programmes and especially of extension services. Extension services are at present being investigated by a committee of inquiry, the Committee of Inquiry into Services to the Agricultural Industry. We hope to receive the report of this committee by the end of the year. We have splendid research institutes in the agricultural industry. In the field of research, South Africa has an international reputation. However, it is extremely important that these results of research should be implemented in practice. Therefore we are taking a very serious look at the whole question of extension and services to the agricultural industry in future.

I come now to the conclusions. Although the Government and the department are doing and will do everything in their power to play their proper role in combating these severe drought conditions in the short as well as the long term, it goes without saying that farmers will have to make sacrifices themselves in order to absorb their problems. Here I am referring in particular to the fact that capital expenditure will have to be restricted to what is absolutely essential. Soil conservation practices will certainly have to be improved. In this connection one thinks in particular of the deterioration of the natural pasturage. Reports on this aspect are shocking. We shall have to implement improved production techniques in order to increase productivity. This is the task of the individual farmer. He will have to train himself and to improve his knowledge. Good management techniques will also have to be used to improve management. In addition, sound financing principles will have to be applied.

In the summer rainfall areas, where crops are produced on an intensive basis, the average investment per farming unit is R1 million today. This requires good management techniques. However, I have every confidence in the South African farmer. There are enough of them who show the necessary responsibility and who possess the ability to survive and to do their duty in this connection.

In the final analysis, after all, we are concerned with the production of food for South Africa and its people. I think the time has come, in view of the situation in which agriculture finds itself at the moment, and of the objectives of agriculture and the demands being made on the industry—the priorities in respect of agriculture have changed—for us to spell out our agricultural policy in South Africa in greater detail. I intend to table a White Paper on agricultural policy next year, with the approval of the Cabinet. Then we shall be able to discuss agricultural policy in a much more meaningful way. However, I want to say at once that I do not mean by this that we do not have an agricultural policy in South Africa at the moment. On the contrary; if we had not had an agricultural policy in South Africa, we would certainly not have been one of the six or seven Western countries in the world which are able to export agricultural products. To proceed from the point of view that we have no agricultural policy, therefore, would be wrong.

However, there are certain priorities to which we shall have to give attention. Let me mention a few of these. Firstly, agriculture is one of the biggest employers in the South African economy. Agriculture provides jobs for 1,2 million people. It is our policy that the small entrepreneur should be supported. It is part of our economic policy and of our regional economic strategy. Where could one find a better example than the family farming system in South Africa? Surely this is nothing but a small business enterprise. We shall have to examine these aspects.

Another important aspect is that agriculture is acquiring an increasing strategic value. Agriculture is also being expected—we are already working on the matter and we have already made announcements in this connection—to bring about a greater population density on our northern borders. This is essential for many specific reasons.

Agriculture will also have an increasing role to play, not only in the South African economy and the South African regional economic development strategy. It is also beginning to play an increasingly important and more decisive role in the whole Southern African context. Our agricultural development system will have to extend beyond our borders. We cannot feel secure in South Africa if neighbouring countries are starving. Therefore agriculture has an increasingly important strategic role to play, and therefore I believe that it is essential and that the time has come for us to table a White Paper on the position of agriculture in South Africa.

Mr. Chairman, I request the privilege of the half-hour.

First of all may I congratulate the hon. the Minister. This is his first debate in his new post and we in these benches wish him well. He has indicated that during the short time that he has been in office, his door has always been open to all who need to consult and confer with him, and this attitude is greatly appreciated. Then I should like to thank the officials of the department who have always been very helpful whenever those of us in these benches who have needed, advice, information or assistance of any kind have been to see them, or have contacted them. That too is appreciated.

This is one of the more pleasant debates in this House. By and large one succeeds in keeping party politics out of the debate. This has been a tradition in the past and as spokesman on agricultural matters for this side of the House, I certainly do not wish to change it in any way. That does not indicate, of course, that we shall not hold the hon. the Minister or his department under the closest scrutiny, but I trust that whenever we do criticize the hon. the Minister or his department, it will be in a constructive way.

The hon. the Minister has taken over his portfolio at a time when South African agriculture is facing what is perhaps the greatest crisis in its history. It is in fact a crisis of survival. Not only is agriculture being threatened by financial problems of monumental proportions, but it is also being haemorrhaged by one of the worst droughts in living history. Under these circumstances the hon. the Minister’s talents and powers are going to be tested to the utmost, and we consequently wish him well. We should be under no illusions as to the gravity of the situation. Over the past few months I have been collecting a few newspaper cuttings and they tell a very sad story indeed. Some of the headlines read as follows: Bankruptcy threatens hundreds of farmers; Farmers are facing ruin; Drought disaster warning; Agriculture in crisis; Bankruptcy fear in agriculture, Massive blows for Natal farmers; East Cape farmers face crisis, etc. Farmers are not easily panicked, but I can tell hon. members that I am conscious of a rising tide of desperation amongst farmers despite the relief measures that have been offered by the hon. the Minister and the State. I shall return to this point later in my speech.

If one considers the facts, one can begin to understand the magnitude of the crisis in which farmers find themselves. Firstly, debts carried forward in 1981 by the farming community amounted to R106 million. This year it is expected to be approximately R700 million. Interest payments increased from R262 million in 1969 to a figure of R903 million last year. Of the R900 million borrowed by grain farmers from the Land Bank last year, much has been lost because of the lost crop and farmers will need to borrow an estimated R1 200 million this year if they are to get new crops into the ground. Another crop failure this year would spell total disaster. Farmers’ short-term debts have mounted to more than R2 000 million and their total debt exceeds R5 000 million. When one considers that the total farmer population is no more than some 70 000, then the seriousness of the situation becomes clear.

What about the future? The S.A. Agricultural Union has conducted an exercise which shows the cash flow over a projected four years for maize farmers. In this exercise it was suggested that debt will rise rapidly. Let us take the example of an annual cost increase of 13% and a maize price increase of 16%—it should be remembered that it was not 16% but in actual fact more like 9%—on an average 600 ha farm. Including repayment of accumulated debts over the four year survey period, this example shows that the farmers net indebtedness deteriorates from R35 000 in the first year to a massive R168 000 in the fourth year. These are frightening figures.

What about the stock-farmer? Stock, dairy and fresh produce farmers will need additional credit of about R1 000 million if they are to stay in business. In many parts of the country stock-farmers find themselves in a situation where they have no grass, no fodder and very little water. They are facing the cold dry winter months ahead knowing that things can only get worse. Selling their stock is no answer. Abattoirs are already glutted, and with fellow-farmers having no grazing to spare, who is to buy their stock? In many cases the stock is already emaciated and dying. The farmers are now only entering the notorious “maermaakmaande”, the months of June and July. But what is going to happend during the “doodmaakmaande”, the months of August and September? Under these circumstances heavy stock losses seem to be almost inevitable. What will happen if the Spring rains should fail? One hardly dares think of that possibility.

There are people who speak of an apocalypse on the platteland, and I believe that they might not be too far wrong. Let me quote what has been said by two experts who sum up the situation. Firstly I would like to quote what was said by Prof. J. P. F. du Toit of the University of Pretoria. He conducted a survey in the Wolmaransstad area and had this to say at the end of the survey—

Dr. Piet Gous of Nampo says the following—

The growing awareness that we are going to be faced with such a disaster caused me to call for a special debate on the drought situation earlier this year. However, such a debate was refused and I can only express my disappointment that the opportunity was missed.

What has been the response of the hon. the Minister, and of the Government? Certain important concessions have been announced. The most important of these was mentioned by the hon. the Minister in his speech this afternoon. Provision is being made through the Land Bank for the consolidation of debts and the spreading of the repayment period over 22 years. Furthermore the Land Bank Act has been amended to enable farmers to raise loans to the full value of their farms. Another concession is that debts to Co-operatives will also be consolidated while farmers will be allowed to repay the debts over six years. Interest rates on these debts are also being subsidized to the extent of 30%. Debts to co-operatives were some R369 million in 1982. Since then the debt has risen to R700 million. Generous subsidies are also available to farmers under the drought aid scheme. As the hon. the Minister mentioned, on 4 May this year 126 districts in South Africa have already been declared drought-stricken areas and as such are eligible for aid. There is no doubt that this scheme is absolutely essential under the present difficult circumstances if the farming community is to be saved. On behalf of this side of the house therefore I should like to express my gratitude to the hon. the Minister for the steps which have been taken by him and his department. I am concerned, however, by a number of problems which arise.

Firstly, the measures which the State has announced, welcome as they are, appear to be no more than a palliative; they are certainly not a cure. They will keep the farmer from going under for a while but they will not get him out of the mire. It is my considered opinion that the liquidity crisis in agriculture is now beyond the control of farmers. What if the Land Bank is now prepared to accept a 100% bond on one’s property rather than 80% bond of the past? This simply means that one can now get oneself 20% deeper into debt. Getting oneself into debt is no problem at all. It is indeed the easiest thing in the world. Getting oneself out of debt, however, is the real problem. I believe that up until now the State has unfortunately tended to respond in and ad hoc way to crises in agriculture. It is rather like the story of the little Dutch boy who put his finger into the hole in the leaking dyke and so saved the city. The immediate threat might have been removed but what happened when his finger was removed? The result would be that the dyke would ultimately collapse unless a stronger structure was built in its place. The hon. the Minister in his speech expressed similar sentiments when he said that the days of ad hoc responses in agriculture to problems of this magnitude were now passed.

We must stop treating symptoms and begin to treat causes. We have to begin to think about long-term plans to put agriculture back on a sound financial footing, and in this sense, when the hon. the Minister talks about a White paper concerning the financial situation of farmers, we in these benches heartily applaud and approve that measure. We know the causes of the financial crisis in agriculture, and we also know that it is not only the drought which is to blame. The drought has simply served to aggravate the problem and to bring matters to a head. We know that despite the best efforts of our farmers, who are, I believe, amongst the finest in the world, the profitability of farming has declined steadily over the years, and this despite a marked increase in productivity and efficiency. Let it not be said that farmers are in trouble because they are not efficient. This is just not true.

Allow me to quote two statistics to prove my point, Mr. Chairman. In 1978-79 maize farmers—in a bad season—reaped 8,1 million tons, and made a profit of R46 million. In 1981-’82—only three years later—a similar harvest led to an accumulated loss of some R417 million. This year the estimated accumulated loss is going to be something of the order of R834 million. The scale of this loss indicates that it is not just a question of inefficiency on the part of the farmers. In fact it can be shown that despite the bad years the productivity of maize farms has increased.

What has caused farming to become financially so unattractive, Mr. Chairman? There appear to be two main causes. The hon. the Minister also identified these very same causes. The first one is inflation. It is all too often forgotten that farmers are consumers as well as producers. They need great quantities of fertilizers, weedicides, insecticides, seed, etc. They also require modern machinery, spares and services. Fuel is also an essential requirement, and wages which they pay must also be competitive. All of these agricultural in-put costs have in fact rocketed over the past few years, and it is indeed the disproportionate increase in in-put costs that is the real enemy of South African agriculture. The vagaries of our climate do not cause our problems. They simply serve to aggravate them.

This brings me to the very vexed question of protectionism. The State has decided that certain industries are to be regarded as being of strategic importance to the country, and for this reason they have been given protection in various ways against competition from imports. Fertilizers and industrial chemicals are only two examples in this connection. In many instances farmers now have to pay considerably more for the locally produced article than they would have to pay for the imported article. It is the export industries particularly, such as the maize industry, that are hardest hit by the quality of these products. While we in these benches accept that a case can be made out for protectionism under certain circumstances, we believe that there has been a substantial degree of overprotection. Furthermore, we believe together with many responsible organizations in agriculture, that if the industries in question are of national strategic importance, then the nation as a whole should help to bear the cost, and not just the farmer. What is in effect happening is that the farmer is subsidizing protected industries by paying these inflated prices, not the State.

A further effect of these high input costs is the high price of agricultural products, which in a very real way affects the consumers in this country. As I have mentioned, there is also the question of the loss in competitiveness which the would-be exporter of these products suffers on world markets. The maize producers in particular have taken the lead in fighting for a new economic dispensation. Nampo has argued that it is prepared to free import control—with restrictions on dumping obviously—if inputs like fuel and fertilizer are open to import. The hon. the Minister is fully aware of the arguments that have been advanced by agriculturists in this regard. I should like here to pay particular tribute to the monumental work that has been done by the South African Agricultural Union in analysing this particular problem. We in these benches believe that it is time the hon. the Minister gave an indication as to the direction in which he is taking agriculture. Is he going to fight for the rights of farmers to free themselves from the crippling burden placed upon them by the Government’s protectionist policies, and thereby strike a real blow to help make farming more profitable, or is he simply going to continue giving more hand-outs and palliatives? Is he going to continue relying upon sticking more and more fingers into holes in dykes to hold up the situation without getting to the cause of it?

Mr. Chairman, I do not wish to be misunderstood. I am not criticizing the hon. the Minister for granting aid to needy farmers in these desperate times. What I am saying is that we need to get agriculture back onto a healthy financial footing so that farmers will not need to come cap in hand to the State for this kind of assistance when droughts strike or when markets sag. To do this we need to think very seriously about our future policies. If the hon. the Minister needs to send a few holy cows to the abattoirs in the process of restructuring the financial basis for agriculture, then we will lend strength to his arm.

If this drought has taught us one lesson it must be that we must never again allow ourselves to be caught in this position. We must surely know by now that the climate of this country is such that it makes for feasts or famines—for fat years and for lean years. People accuse our farmers of living like kings in the fat years and beating their breasts like paupers in the lean years. This may be unkind but perhaps there is also an element of truth in it. We have to learn to discipline ourselves and we have to learn to get our own house in order first. I believe that the time to start that process is right now.

Mr. Chairman, I want to associate myself with the congratulations extended to the hon. the Minister and the hon. the Deputy Minister, by the hon. member for Albany, on this first occasion on which they are taking part in the discussion of this Vote in their present capacities. On a previous occasion we wished the hon. the Minister luck for the years ahead, and we are confident that he will make a success of his post and that he, together with the hon. the Deputy Minister, will be able to solve many of the farmers’ problems. On behalf of this side of the Committee we want to extend every good wish to him on the road ahead.

I think I should also congratulate the hon. member for Albany on his appointment as chief spokesman on agricultural matters on that side of the Committee. We appreciate his general approach in the discussion of this Vote.

I want to touch on a few points, and in the course of my arguments in that connection I shall possibly also be replying to the standpoints raised by the hon. member for Albany. The first point I should like to make concerns agriculture and politics. The second point involves the drought. The third point concerns production inputs. The fourth point has to do with decentralization benefits as a whole.

I believe that we agree in principle with the adage that agriculture and politics should be separated. I also think we agree in principle that in trying to identify and solve the problems in agriculture it is possible for us, as individuals in this Committee, to disagree amongst ourselves. We can also disagree as political parties. The way in which we disagree, however, must be such that we objectively try to seek solutions without trying to single out this or that aspect as the sole culprit owing to certain situations that prevail. In saying this I do not want to imply that we on this side cannot also disagree with one another as individuals. We can even disagree with the department and the hon. the Minister, too, but the way in which we disagree must be such that we attempt to find a solution.

If this does not happen and one tries, despite that, to look for a scapegoat, to criticize individuals and to make politics of the whole issue, I do not think one will be doing agriculture as a whole any service. I want to allege that those who want to drag politics into agriculture are not doing agriculture a service. On the contrary, they are doing agriculture a disservice. In my view they are creating attitudes mutually beneficial to agriculture. In the process they are thus not solving any of the problems in agriculture. There are not only those who want to bring in politics directly, but also those who want to make certain individuals’ attitudes to agriculture suspect and thus contribute to politics being brought into agriculture. If that is so, I do not think those people are serving agriculture as a whole either.

This brings me to the question of drought aid. As far as the preliminaries are concerned, many people have contributed inputs to the solution of various problems. I think we can proceed from the view that the reason why drought aid was introduced was to solve certain problems in the short-term. As the hon. member for Albany quite rightly said, it is not a long-term solution to the problem as a whole. It is also true, however, that if one did not have a short-term solution to the problem, there would be no one left to save in the long-term. It is therefore absolutely essential for one to see the matter in that context.

I believe that the drought-aid scheme has assumed such proportions this year, as far as the total debt involved is concerned—I do not want to argue about that, because I think it is a basic fact that we can accept—that in the months to come the growing pains will have to be eliminated, from time to time, as we go along. If we discredit the drought-aid scheme, even at this stage, however, and over-emphasize the growing pains to such an extent that the plan as a whole is placed in jeopardy, I do not believe we will derive any benefit from it.

The second point I want to make in this connection is that in my view the aim of the drought-aid scheme is to be security-based. There must be security if one wants to grant financial assistance. I think this is a sound financial principle that we should bear in mind. One must therefore look at the type of security that is available. The first is the piece of land that is involved. That is the fixed security. Secondly, there are the relevant loose assets. Thirdly there is the potential crop for the year ahead. Against the background of those three types of security, money must be made available to the farmers. As far as fixed security is concerned, the position is surely, as the hon. member said, that the Land Bank has already made certain adjustments in order to accommodate people even further. There is, however, a further point that will have to be taken into account in this connection. I think it would be a sound principle for the Land Bank, in granting credit, to base this on the agricultural value of the land. I do think, however, that it would be wrong if the determination of the agricultural value of the land were influenced by the present poor years that are being experienced. We know that good years are followed by poor years and that poor years, in turn, are followed by good years. We have already experienced a few poor years, so the potential for good years is, at present, better than if one had already had a few good years. In that respect similar circumstances should therefore not decrease the value of the land as security. It ought rather to increase the value slightly. Because the Government as a whole is well-disposed towards this scheme and supports it, this ought to serve as some incentive to the Land Bank to be a little more lenient towards cases that have merit, and border-line cases, when it comes to valuations.

There is another aspect I also want to focus on. In public circles it is very glibly said—I have heard it myself—that in essence this assistance does not really mean anything and that the Land Bank cannot accommodate people because there is much more debt than there was previously. I have taken the trouble to investigate the position, and on the basis of figures given to me by the general manager of the Land Bank, I am in a position to say that in the past two weeks, in which the first debts were consolidated, 57 applications were considered, of which 54, or 94%, have already been granted. In other words, 94% of the farmers have, over this period, been helped as far as this consolidation is concerned. Nor is it insignificant assistance that is being granted. These are farmers who would have been in a tight spot if they had not obtained help. The following point I can make is that there are 464 applications in the pipeline to the tune of R79 million. We hope that those applications will be equally successfully accommodated.

As far as the Land Bank and agricultural credit are concerned, loans are chiefly based on fixed security. There are, however, also the agricultural co-operatives that offer other kinds of assistance. Farmers who have carry-over debts with those co-operatives can consolidate those debts at the Land Bank. With their crop potential as security, however, they may want to incur further carry-over debts. The Land Bank, however, cannot handle that. In that connection there is also the crop-loan for the next year. Even if the co-operatives could be of assistance in this respect, we can accept the fact that it would not be possible to help everybody. The principle involved is, however, a sound one.

There are two other small points I should like to raise in this connection. I am addressing them more specifically to the hon. the Deputy Minister. People who have negotiated loans with the Land Bank and with Agricultural Credit must be living on the relevant farms and be actively farming there. That is the principle laid down. If, however, one bears the income of the crop, or the potential income of the crop, in mind, there are many people for whom it would be economically advisable to look for other work in the meantime so as to earn additional income. My plea to the hon. the Minister and the department is that they should also be well-disposed to those people and grant them the concession of being able to go and work in order to increase their total income.

The following point I want to deal with relates to the six-year term of the crop production loan. That is the term approved by the hon. the Minister. I have also rightly said that one of the biggest problems the farmers have is the increased interest rate in that connection.

Order! The hon. member’s time has expired.

Mr. Chairman, I rise merely to give the hon. member the opportunity to complete his speech.

I thank the hon. Chief Whip for the opportunity.

My recommendation, as far as the six-year period is concerned, is that we should rather see whether the term cannot be reduced to four years, with the interest rate decreased even further. The present interest rate could even start creating problems this year. I ask the hon. the Minister to give that matter his favourable consideration. Some people are asking for a longer term, but as far as crop farming is concerned, there is no industry that can get into difficulties more quickly in a poor year than the maize industry, but in the event of a good year, this industry also recovers and gets over its problems reasonably quickly. This fact is proved by previous loans that have been granted.

The following matter I should like to raise has to do with the transportation of fodder to the drought-stricken areas. There is no concession for cattle in a drought-stricken area to be sent to places where there is good grazing. Transport rebates are not applicable in that connection. The hon. the Minister furnished certain particulars to indicate why it could not be done. One reason is that it could result in overloading. I think, however, that if one did a cost and effectivity study in regard to certain areas to which that livestock could be taken, one would find it advantageous rather to take the livestock to the fodder. The total cost to the State would be less and it would entail greater benefits for the farmer. I want to ask the hon. the Minister to give this his favourable consideration.

The next question I want to raise is amongst the most important of all the considerations, i.e. that of the long-term solutions to these problems. In future agriculture would not be able to keep its head above water if the inflation rate in South Africa assumed the proportions it is assuming at the present moment, and this at a time when the inflation rates of the production countries competing with South Africa are very low. One therefore encounters an export product cost problem as a result of the competitive prices abroad. We shall therefore have to decrease our inflation rate. The inflation rate is one of the chief causes of the increase in production inputs. If we do not combat the input cost increases, agriculture is going to be faced with problems in the future. Production inputs can be subdivided into a number of facets. Industries giving rise to cost-inputs for the farmer are the protected industries. There are industries which, for strategic reasons, are protected. Some industries are protected because, as a result of certain circumstances, they evidence an increasing internal cost structure. There are, however, misconceptions about many of these industries. The fertilizer industry has already been criticized in this debate. A few years ago, however, we could export fertilizer at a better price than we could sell it locally. The Government then had to place an embargo on this. It is important, in criticizing the protected industries as a whole—that is the standpoint I am adopting—that one should look at all the industries that are being protected. We know, do we not, that agriculture is one of the most protected industries in South Africa. Not only is there import tariff protection, but there is even a complete embargo on the importation of agricultural products if this does not take place by way of a permit. I am afraid that if one were to criticize and denigrate protected industries, as such, for the very fact that they are protected, agriculture would eventually suffer greater damage than it would gain in benefits in the short term. I do not, however, want to allege that one should not take a look at the influence of the protected industries on agriculture. As far as these specific matters are concerned, there is the Jacobs Committee making recommendations. There is also the S.A. Agricultural Union making recommendations. Various departments are involved in this. As far as this aspect is concerned, there are also MPs making representations in this House. I want to say, however, that I am of the opinion that in the Cabinet there must be co-ordination between the various Ministers involved in these matters. In a Cabinet Committee or Standing Committee solutions could be sought for this problem. I am now referring to the Department of Industries, Commerce and Tourism, the Department of Agriculture, the Department of Finance and all the other departments involved in this. We must get the decision-making bodies together in order to find a solution. It must be done quickly. We cannot wait until next year. The decision they must take, must make itself felt in the coming production year or we are going to have problems.

I now come to the question of protected industries. I also think there are unprotected industries and companies making excessive profits. In the Sunday Times one reads of the 50 top companies and of the fact that the top few were able to maintain a growth rate of 40% or 50% per annum in the past three years. I want to allege that it is not a saving in capital growth that has enabled them to do this, but excessive profit-taking at the cost of the public. I think the relevant department will also have to look at unprotected industries and cases of excessive profit-taking. In this connection I do not believe that commercial banks contribute their share. Commercial banks have not reduced their interest rates, and under these circumstances farmers must pay as much as 21% and 22% interest, even after we had previously made representations about that in the House. The commercial banks do not contribute their share to agriculture when it comes to reducing interest rates. We shall also have to give attention to that. I accept the fact that security and risk play a role, but the hon. the Minister will have to hold discussions with his Cabinet colleagues so that one can take an urgent look at this aspect.

A fourth point I want to mention is the question of decentralization benefits. The South African Agricultural Union made a thorough study of this matter, by way of a series of articles, pointing out the importance of agriculture. The document was submitted. If one looks at all the aspects influencing the Government in its decision to grant decentralization benefits to industries, with a view to having them establish themselves in outlying areas, one finds agriculture asking what benefits it derives from the fact that some farming operations have long been established in rural areas and have had to cope with all the long-term disadvantages of such rural areas. There are factors such as the distance to the markets and transport, the high input costs, etc. Attention will also have to be paid to that. Quite a few matters come to the fore here.

The first and most important point I want to mention in this connection is the fact that the farmers in border areas adjacent to self-governing and independent States are in an uncomfortable position in regard to their economic activities and general living conditions. I think that, broadly speaking, one would specifically have to place decentralization benefits into perspective in granting decentralization benefits in the face of the problematical situation in which they find themselves. One can mention a whole series of these aspects. There is education, for example, the case of a teacher who has to go to a small, out-of-the-way country school. What circumstances do they encounter there, and what attraction does that area hold for a good, competent male or female teacher? So when it comes to the education and training of children, should one not also take a look at teachers receiving benefits so as to draw competent people to those areas?

One can also think of roads, electricity, the supply of power, etc. I want to allege that industries obtain cheap power because large numbers of industries are centred in one spot—we should also involve the hon. the Minister of Mineral and Energy Affairs in this decision-making process—and that the capital development costs of industries in small places, for example in the provision of electricity, are proportionally much lower than the costs in the decentralized areas. [Time expired.]

Mr. Chairman, I request the privilege of the second half-hour.

Permit me to associate myself with the previous two speakers in congratulating the hon. the Minister and the hon. the Deputy Minister on their first handling of this budget Vote since their appointment. I think this is probably one of the most difficult of Government departments to handle. The previous Minister of Agriculture and the previous Deputy Minister of Agriculture were with us for a short while, but I think they are exceptionally grateful to have been able to escape in good time.

It has been said here that we should keep politics out of agriculture. I agree. It amuses me, however, that people who so sedulously demand that one should keep politics out of agriculture, do some breast-beating at election time and tell the people that the NP does everything for agriculture. Surely one cannot have one’s bread buttered on both sides. Either one decides to keep politics out of agriculture, and makes the same demand of one’s opponent, or one makes a political puppet of agriculture. I shall, however, leave the matter at that.

I very largely agree with most of what the hon. the Minister and the previous two speakers said. One of the biggest problems in agriculture, one that has over-abundantly been confirmed and accentuated by the tremendous drought now being experienced, is that of uncertainty in regard to eventual production and, of course, uncertainty in regard to the eventual financial realization of labour input and capital input. It amazes me to find people, mostly those outside agriculture and those with no practical experience of agricultural problems, critical of the solutions the agricultural sector itself adopts and recommends for the handling of its own problems. In particular I want to refer to the almost tiresome criticism one frequently hears about agricultural control boards and, in particular, about the operation of the Marketing Act. From this side of the House I want to state unequivocally that we regard the Marketing Act as the corner-stone and the foundation on which orderly agricultural marketing rests in South Africa. One frequently hears the criticism that as a result of the operation of the aforementioned Act, there is interference with what is regarded as a sacred cow, i.e. price-determination by supply and demand. Other sectors of the economy, however, are granted the right to do collective bargaining in regard to—to mention just one example—improved conditions of service, etc. Yet it is not argued that when people are negotiating for better financial benefits for themselves, there is interference in the operation of the so-called free economy and price determination by supply and demand. In asking the following question, I am not advocating a trade union for the farmers; anything but: Why is the farming community denied the right to organize itself and to try, by way of its own control boards, to obtain for itself a livable and reasonable compensation for its inputs of capital, labour and initiative? It is therefore our view that it is justified, in the case of agriculture, and especially in the case of agriculture with its vicissitudes of climate and prices, that the State, by way of the control boards, should realisticly intervene in the operation of the free-market mechanism, a mechanism which, nowhere else in the world, as closely approximates its old classical form as it does here. Let me mention one example of the benefits resulting from such intervention, i.e. that of the wool farmer. If one still had each wool farmer individually marketing his own wool in South Africa today, hon. members can imagine the chaotic conditions in which the wool industry would have found itself this year when even the Wool Board, with its single-channel marketing effort, was not in a position to sell the total supply? It can therefore be stated that although the Wool Board’s entry into the so-called free-market system is interference in the process of price determination, such entry is not only in the interests of the South African wool farmer, but also in the interests of the consumer.

I therefore want to repeat, as far as that is concerned, that we adhere steadfastly to the Marketing Act. This does not mean, of course, that there is no criticism. Mistakes have been made in the past and will probably be made again. There is nothing that cannot be improved, and therefore we must learn from the mistakes of the past.

As far as present drought conditions are concerned, I agree that the steps that the State is now taking should not be seen as an effort to pay the farmers’ debts. That cannot be expected of the Government. These are only crisis measures being employed to keep the farmers on their farms, and that is the light in which it must be judged. I believe that problems are going to crop up, and I want to express the hope that the hon. the Minister and his Deputy, and also the hon. the Minister of Finance—who would, in any case, have the last say—should make the necessary adjustments.

A problem that affects our young farmers, in particular, involves the high land prices. I have heard it argued that although the farmers are complaining that financially things are not going well with agriculture, land prices are steadily increasing. That may be a justifiable question. There are diverse reasons for the escalation in land prices. The first is inflation. Then there are numerous people outside the agricultural sector who buy land as a hedge against inflation. This necessarily influences land prices. Another reason for the increase in prices is that it is not only the farming population which is in the market for more land. In a rapidly developing country like South Africa, where we have urban development, industrial development, these bodies are also claiming an ever-increasing share of the surface area of our country. Consequently the surface area available as agricultural land is decreasing each year, and that in turn gives rise to stiffer competition for that land that is still available. Another aspect we must not lose sight of is the consolidation of our Black national States. I have no fault to find with that; in fact, I am a fiery advocate of that process. That process nevertheless does have the side-effect of taking a large portion of our agricultural land out of the hands of Whites in order to add it to the Black States. Of necessity those farmers who have had to relinquish their land for the consolidation of Black States will have to look elsewhere for land, and in that way new buyers of agricultural land are artificially brought into the market. As a result of all these factors it has become impossible, at present, for any prospective young farmer to become an economic farmer. Economically it is simply impossible for the young farmer to do so, unless of course he receives the necessary help.

This brings me to a subject that has worried me tremendously over the years. In recent decades there has been a great deal of talk about the depopulation of the rural areas. What concerns me, in particular, is that I have recently gained the impression that as far as agriculture is concerned, many of us have got the idea that we are here simply faced with yet another economic aspect. I think it would be a bad day indeed if we were to try to separate agriculture, and the role it must play in our country, from the socio-political solutions we are seeking for the problems of our country. Where it is jus-trifled to have tremendous amounts spent on the proper consolidation of Black States, it is equally, or perhaps more, justified to have tremendous amounts spent on the proper consolidation of Black States, it is equally, or perhaps more, justified for us to spend the same amounts on the repopulation of our rural areas, particularly repopulating our farms in the White areas of South Africa with White farmers. Since I have read that we must simply resign ourselves to a further depopulation of the rural areas as a result of the drought conditions, let met advocate that we look further than the mere economics of the matter. We must also look at the soci-political implications. I am grateful for the steps the hon. the Deputy Minister has taken in an effort to repopulate our farms in the border areas. I am advocating, however, that we should not only take an in-depth look at the farms in our border areas, but also throughout South Africa. For the moment it may seem obvious that we should only look at the position of our border areas, but if we do not take an in-depth look and devise plans for the repopulation of our rural areas as a whole, we may find that in the years ahead our country will consist of a small number of White islands in a Black sea.

Do you hear that, Sarel?

How does one do that?

Wait until we are in power. [Interjections.]

Mr. Chairman, with all the responsibility at my command, I want to issue the warning that we must be careful that we do not run the risk of eventually becoming merely a few small White islands in a Black sea. What I am therefore saying is that if that is our aim, we cannot lay down purely economic criteria for the repopulation of the rural areas and rural farms by Whites, just as we have never used the economy or the production capabilities of an undertaking as a criterion for the establishment of Black people in the national States.

There is, in any case, a great difference in living standards between the two.

Oh, Mr. Chairman, I wish the hon. the Minister of Environment Affairs and Fisheries would leave me alone now.

Mr. Chairman, may I put a question to the hon. member for Barberton?

No, Sir. I have very little time. The hon. the Minister must please leave me alone now. The hon. the Minister did, in any case, have an opportunity to speak when he was Deputy Minister of Agriculture. I am now taking to the hon. the Minister of Agriculture. [Interjections.] I want to lodge a plea with the hon. the Minister of Agriculture and the hon. the Deputy Minister of Agriculture with specifically that objective in mind. We shall have to adequately determine what steps can be taken, although they may perhaps not be justified on purely economic grounds, with a view to the re-establishment of young White farmers in the rural areas.

But surely that is already being done.

If the hon. the Minister of Environment Affairs and Fisheries disagrees with me about that, he is quite entitled to do so.

But I am saying that it is being done. [Interjections.]

Then, Mr. Chairman, we must immediately enter into a political debate, and I do see my way clear to doing so. [Interjections.]

Mr. Chairman, in conclusion I just want to express my thanks to organized agriculture for the exceptional zeal it has displayed and the work it has done in the interests of South Africa and of the South African farmer in particular. My special thanks, too, to the Director General, Dr. Immelman, and his staff. Merely from the figures made available to us by the hon. the Minister this afternoon, figures in connection with the increase in the input costs in agriculture over the past five years, it is clear that there is something seriously wrong with conditions in agriculture. From these figures alone it is clear that even if we had not suffered the present drought conditions, the present problems in agriculture would still have been there; though necessarily to a lesser extent. That goes without saying. We would, however, still have had those problems.

We look forward to the promised White Paper from the hon. the Minister. Then we can debate this matter further.

Mr. Chairman, generally speaking the hon. member for Barberton made a balanced and constructive contribution to this debate. I want to thank him for this. I also think that in due course the hon. the Minister will reply effectively to the questions put by the hon. member, and will also react to the statements he made. Later in my speech I shall perhaps follow up on what the hon. member had to say in connection with the problem of the depopulation of the rural areas.

However, Mr. Chairman, allow me to congratulate the hon. the Minister on his first—albeit very short—and extremely effective kick-off in this debate. That shows how a farmer does things. I want to express my sincere thanks and appreciation to the hon. the Minister, the hon. the Deputy Minister and the department as a whole this afternoon for the fact that they have openly and very frankly committed themselves to upholding one of the greatest truths in agriculture, namely that the family farmer forms the actual unit, the actual source from which agriculture in South Africa draws its strength power and by which it is upheld. I want to join the hon. member for Barberton in saying that we have to keep this family farmer on the land as far as is practically and economically possible. The truth of this statement cannot be spelled out in clearer language than in the Government’s long-term drought assistance planning. The effect of the drought assistance and the realization of the objective of keeping the family farmer on the land, are demonstrated in the most dramatic way in the North-Western Cape, the region where no rain worth mentioning has fallen for five years and more and where the farmers literally are waging a struggle for survival. I know the hon. the Minister and the hon. the Deputy Minister are profoundly impressed by the sincerity of these farmers in their expressions of thanks to the Government.

This morning a discussion took place between farmers from that part of the world and four MPs who are involved in this. I want to make it quite clear this afternoon that an open-hearted and spontaneous spirit prevailed at that discussion. It was also a stimulating discussion. In brief, the purpose of the meeting was to discuss the fact that as far as phase 5 drought assistance is concerned the loan part, the 30% that the farmer has to repay, has built up over the years to an amount per small stock unit which can no longer be compared realistically with the market value of a small stock unit. These farmers feel some concern because, since the rainy season for the summer rainfall region is now over and they will have to wait for the next summer rainfall season, this burden of debt can become even larger. As sober-minded people they came to us this morning and asked that we try to work out a plan in this connection. We have to try to find an adapted scheme that is more realistic than the present one. I want to tell the hon. member for Barberton that this is probably the best testimonial this Government can get to keep the family farmer on the land.

The hon. member must not drag politics into this debate now.

No, I am merely stating the facts.

I should also like to deal with a second matter, namely the impression now being created in certain circles that the standpoint of the S.A. Agricultural Union regarding the protection of local industries and the effect of this on agricultural exports, is a serious issue. I maintain that it is not really such a serious issue. I also maintain that to a major extent the standpoints and views of the S.A. Agricultural Union and those of the Government on industrial protection coincide. Let us test this statement I have just made by saying that the S.A. Agricultural Union has set itself a certain goal in its entire formulation of its official standpoint, and that its goal is the extension of and the continuation of agricultural exports which is really a priority of national interest in this country. The Government agrees wholeheartedly with that goal. Besides, the Government has great appreciation for what agriculture has done in this regard.

Only this week the hon. the Minister of Industries, Commerce and Tourism made the Government’s standpoint on this goal very clear, namely that whereas up to now the entire matter of industrial development has actually been built around the concept of import replacement and that for this reason protection for industrial development had to be built in, in future we shall have to concentrate increasingly on exports, because it is only through exports that we shall be able to promote growth and provide employment. These are two high priorities in this country. As far as these goals are concerned there is no difference of opinion between the S.A. Agricultural Union and the Government.

In the second place the S.A. Agricultural Union has identified three impediments to achieving this goal. The S.A. Agricultural Union has formulated these three impediments very briefly as follows: In the first place there is a weakening in the domestic competitive ability of agriculture in our general economy. In the second place there is the weakening of South African agriculture compared with countries abroad. The S.A. Agricultural Union then came to the conclusion that although efficiency in agriculture had not diminished during the past decade but had improved, instead, the weakening took place solely as a result of the fact that production input prices in South Africa rose more sharply than in our trading partners’ countries. This is the reason why this depilitation occurred.

This reality has also been admitted by the hon. the Minister of Industries, Commerce and Tourism. He admitted that the Government was aware that production input prices had risen more rapidly than producer prices and that the Government was also concerned about the weakening in the competitive ability of agriculture. In this regard there is therefore no major difference of opinion either.

In conclusion the S.A. Agricultural Union stated its official standpoint regarding the protection of local industries. It maintained that in principle it had no problem with the principle of the protection of local industries provided it was on a selective basis and on a merit basis. This is exactly the same standpoint as that adopted by the Government in its policy of the protection of local industries.

As I have just mentioned, the S.A. Agricultural Union, however, went on to say that according to the calculations and submissions it had received from the agricultural industries, the protection policy has had a debilitating or adverse effect, particularly on the export of agricultural products. To this the hon. the Minister replied by saying that if the protection policy was placing an export product in a weaker position on the export market, then export assistance had to be granted. He undertook to investigate the entire export incentive scheme so that whereas the export concessions are at present based on tax relief, this could possibly be changed to cash payments. This possibility would be investigated so that agriculture controlled by control boards and co-operatives, which in practice are not liable to taxation, could also make use of the export incentive scheme on the basis of cash payments.

Generally speaking, the S.A. Agricultural Union understands the standpoint of the Government on industrial protection. Similarly the Government understands the standpoint of the S.A. Agricultural Union on industrial protection. There is therefore no issue in this regard. [Time expired.]

Mr. Chairman, during the course of my speech I shall react to some of the remarks made by the hon. member for Ceres. Some of his remarks are a little too apologetic for my liking. His was a little bit of a “jabroer-toespraak om dinge nou mooi oor te smeer en te sê dat alles reg is.” However, that is not true.

In the absence of our chief spokesman on agricultural matters, the hon. member for Mooi River who is temporarily indisposed, I should like to convey his as well as my own very good wishes to the hon. the Minister and the Deputy Minister on their first budget debate. We wish them strength with the great task that lies ahead in reviewing the whole situation in agriculture and introducing some weighty changes to policy, because from the situation in which agriculture finds itself, I think it is quite clear that policy needs careful revision and that a greater effort is required on the part of the department to allow this sector of our economy to assume its rightful place. Further, my party would like to place on record its sincere appreciation of the members of the Minister’s staff and of the Director-General and his staff. It is always a great pleasure to deal with that department and we appreciate them very much.

We have a slightly different approach to the question of drought relief. I think that gratitude is the wrong word in this context. Naturally people are grateful when they receive relief, but there is also an element of getting back something of which they have been deprived. Agriculture went into the present drought as a crippled industry with no reserves, no resistance and only the slightest possibility of making the sort of contribution it would want to make as a proud industry. I do not think one can find prouder people than farmers.

Whilst we are on the subject of drought relief measures, I think it is important to mention that the schemes were slow in getting off the ground. We have discussed this with the hon. Ministers and with the Director-General. We know the problems, but I think it is important for it to be stated that we must come up with a standard co-ordinating procedure to enable drought relief machinery to be set in motion far more smoothly, with organized agriculture and the department having a very good understanding at the outset of the co-ordinating procedures. Here I should like to make the point that the regional directors have to play a far greater role in their areas. We are not dealing with a normal situation but with a crisis situation and many of the “haak-plekke”, to call them that, and the slow way in which events were set in motion did not indicate the sense of urgency the situation deserved.

At the risk of using up too much of my time, I should like to digress for a moment and refer to something said by the hon. member for Ventersdorp, who is not here now, and the hon. member for Barberton. It is almost incredible for a member of the NP to stand up and say we must not play politics with agriculture. The situation the farmers are in is all the result of the agricultural policy of the NP.

Careful now. You do not understand it.

I shall go very slowly so that hon. members can swallow it and understand everything well. [Interjections.] The situation in agriculture in South Africa today is the result of the NP’s agricultural policy.

It is a good policy. [Interjections.]

The hon. member says we must not talk politics and then he goes on to say that the “konsolidasiebeleid” has put up land prices. Now he wants to use more money to re-establish White farmers and he has just realized what a terrible mess has resulted from this country’s money being misspent on fruitless efforts to cure a situation when the President’s Council comes up with a picture of immense demographic developments which all that expense is not going to solve in the least.

Are you not ashamed of yourselves. And then you talk of politics. [Interjections.]

Sir, I think this debate deserves to have a bit of politics brought into it. It should certainly be contentious. Unless we can really establish the differences in people’s approach to agriculture, all we will have will be speeches like the nice gentle little speech we have just heard from the hon. member for Ceres according to whom there were no differences between the SAAU and the Government about the Government’s official policy of protectionism. However, other hon. members in this party will be dealing with that in more detail. We in this party say that strategic protectionism is vital, but it must be funded from the right source and not by agriculture. That is the nitty-gritty of our approach to the matter.

The drought situation has highlighted the crushing circumstances and has identified the stark realities of the agricultural sector. The fact is that this industry entered the drought already in a crippled state, with little or no reserves to call on, and I think that South Africans must clearly understand that of our two primary industries, namely mining and agriculture, the one is a diminishing asset which we have to make very good use of to bring about changes in providing employment opportunities and in respect of industrialization, while the other is an asset we will have to live off and will have to nurture and conserve for years to come and for the entire future of mankind in this part of Africa. It is in that light that we must review the situation. I believe it is absolutely true to say that the policy of this Government as far as industrial development is concerned, has been implemented at the expense of agriculture and that industry and commerce are now riding on the back of agriculture. These are points which other members of my party will deal with in the course of the debate. We want to set out our point of view very clearly and we would like to say that we support the Marketing Act fully. We believe that this Act is the foundation of the way in which our agricultural system operates. It must be made clear that the control boards are not State financed but that they are financed by the producer. However, the control boards must be subjected to critical analysis on an on-going basis. Here I would like to bring in a little more politics, because I believe it is important. The control boards still have that spectre of Broederbond control, with the accompanying suspicion about their motives. They are looked upon as narrow-minded, power-conscious people who serve too many masters. We are now going to live through a situation where the members of the CP in that organization and the members of the NP in that organization are going to be struggling for control of those boards, and agriculture is going to suffer.

What about the Sons of Natal?

Here they are. We believe that the people of South Africa must see agriculture in a position where it can operate freely in their best interests and that this aspect of agriculture is vitally important.

We have to meet the twin challenge of recovering from a near fatal blow, viz. the current drought, and of remaining a viable sector capable of feeding the nation. If we want to do this and conserve this natural asset, the budget of this department will have to be vastly increased. The extension services are totally inadequate. We are never going to get the message of research through and create goal-oriented dynamic young people in the field to ensure that the most modern methods and approaches to economic farming are brought right down to grassroots level unless we expand the activities of the department tremendously. If we cannot do that, farmers must be paid sufficiently for their products to enable them to employ their own extension officers. We have lagged behind so far in this field that we have not kept pace with the requirements to meet all the pressures that are going to beset us in this particular situation. [Time expired.]

Mr. Chairman, I want to ask the hon. the Minister not to be too hard on the hon. member for King William’s Town, because he really did not want to quarrel with the Department of Agriculture or with the Ministry. In fact, flattered them. He said, inter alia: “The farmers are a proud people”. I cannot disagree with him. If one tells someone in this country that he is a farmer, one is paying him a wonderful compliment.

The reference to the Broederbond controlled boards was probably made in a light vein. We are not going to pay much attention to that.

You should merely declare your interest.

We appreciate the viewpoint of the hon. member for King William’s Town. The boards exist and we have every right to take a critical look at their activities from time to time. However, as the hon. member for Ventersdorp rightly pointed out, these bodies provide a wonderful service for agriculture in the entire agriculture set-up.

I should like to return in a moment to the contribution of the hon. member for Barberton, when he is present in the House.

However, I should now like to discuss another matter. In this debate the matter of input costs will probably be mentioned several times. Input costs are the major restrictive factor. Probably the large grain farmers are still going to discuss grain. Grain is one of the principal commodities. However, I want to refer to another facet of the farming setup, namely animal husbandry.

I want to refer to the position of the five-stock farmer and his particular input costs, and draw your attention to a specific facet, namely veterinary services, which have to perform a task for the livestock farmer. As a matter of interest I should like to quote a few figures from the annual report of the Department of National Education. At the end of 1981 there were a total of 112 veterinary students. This includes those persons who are still studying and those who have just completed their studies. On the same date there were 1 274 law students. This proves something. However, I want to quote another category. Mr. Chairman, with all due respect, the third category is psychology students. On 31 December 1981 there were a total of 1 421 psychology students, as if they can keep us fed in future!

I also want to quote some other statistics. There are a total of 114 State veterinarians in White South Africa. Let us, however, consider the following data. In Venda there is one veterinarian, in kwaZulu two, in Bophuthatswana one, in Gazankulu two, and in South West Africa/Ovambo two. At Medunsa where facilities have been created for Black students to study veterinary science, there were six first year students this year. At the end of last year not a single student qualified to continue his studies in the second year. I am quoting this data to indicate what a burden this task of caring for our livestock places on the shoulders of our available veterinarians.

I also want to indicate how much livestock we had in February 1983. Changes have of course taken place since February, but these are the most recent figures I could get hold of. There was a total of 8,5 million cattle, 29,3 million sheep, 2,8 million goats and 1,-03 million pigs. There were also 9 million laying hens and 207 million broilers.

How many dogs and cats?

I am not including dogs and cats and other pets. To a great extent the chicken producers have their own veterinary staff. They simply buy a veterinarian and pay him. Consequently we need not take them into account. However, the livestock figure gives an indication of the task facing the veterinarian. He has an important task because in these drought conditions our livestock farmers are suffering just as much as our grain farmers. It makes one’s blood ran cold to hear how much the hon. member for Beaufort West pays per month to feed his herd. On the other hand, there is the hon. member for Humansdorp to whom one could put this question: How much do you get for such a small cow? It is an astronomical amount. We on the High-veld have slightly larger cows. What I am trying to say is that to the farmer his livestock is of vital importance. If three Friesland cows should die overnight as a result of incorrect feeding, it is a disaster for a young farmer. If they are good producers, the average price for each one of those cows is between R1 200 and R1 500. We need veterinarians to meet the needs of these people.

But what do we do with our veterinarians? Nowadays veterinarians build animal hospitals in the larger centres. The State builds hospitals for sick people, for you and I. I am so glad that the hon. the Minister of Finance is here. If necessary, we shall get down on our knees, but we have to do this. We build hospitals for people who have a cold. If someone’s ingrowing toe nail has to be removed, he goes to hospital. However, the veterinarian has to get down on his knees in pelting rain, in wintery conditions, to care for animals. I want to ask that we make finance available to veterinarians from the Treasury to enable them to build hospitals. The State veterinarians could also make use of those facilities. Those facilities are equipped in such a way that I would be prepared to go there to have my appendix removed. That is how neat and clean and hygienic they are.

I just want to indicate to hon. members how much an animal hospital costs because I should like to boast a little about the fact that Standerton has one of the most modern animal hospitals in the country. A couple of wonderful young men are running the business. The capital cost of the site, the buildings, the architect’s fee and the instruments amounted to R350 000. They are very young men who have just left university and raised loans to build this business. That was only their capital outlay. The nurse, the receptionist and the Black workers they have to employ, cost an additional R1 450 a month. This does not include water and electricity either. Is it not possible to reconsider and reevaluate the service we can get from our veterinarians? These people are treating valuable and expensive animals for our livestock farmers. The veterinarian takes the animal to the animal hospital where he can take care of it properly. If the State could also make money available, this would reduce the farmer’s expenditure for the care of that animal. These input costs could be lower because at the moment the farmers have to help to pay for the expensive construction costs of those facilities. I want to ask that we support these facilities in the same way as hospitals are supported. The State veterinarians should also be able to make use of those facilities.

I am glad the hon. member for Barberton is back. He said here that we shall have to sit back and accept that the rural areas will become depopulated. Surely that is not true and the hon. member knows it is not true. He also knows that people cannot be settled for social reasons only. After the Second World War there was a policy …

Mr. Chairman, may the hon. member for Standerton say that the hon. member for Barberton knows it is not true?

The hon. member may proceed.

Thank you, Mr. Chairman. The hon. member for Barberton is a good farmer and he knows that plots were subdivided after the Second World War. [Time expired.]

Mr. Chairman, I am so completely in agreement with the hon. member for Standerton, that I almost wish I could continue with his speech. Unfortunately, however, I have chosen to speak on another subject. The fact that the hon. the Minister intends publishing a White Paper on the Government’s agricultural policy, proves the importance of the subject on which I want to put forward a few ideas this afternoon. In the very short time at my disposal, I should like to say a few words about the Government’s agricultural policy in general.

One often hears people claiming that the Government has no fixed policy in respect of agriculture. Of course, others are more cautious, and merely claim that the Government has no long-term agricultural policy. I want to reject both these statements most emphatically. It is my contention that with a few minor exceptions, we in South Africa have a sound agricultural policy which has been adapted to our unique farming conditions over many years. Determining an agricultural policy in our country is a difficult and complex task, since our industry consists of such a multiplicity of facets and is also influenced by such a large diversity of factors. There are physical, technical and financial factors, as well as the general attitude of our farming community, which is often politically charged, and then, of course, the factors of international trade policy and international trade agreements.

Moreover we have a unique labour set-up in our country, and in addition, we in South Africa always have to be prepared to contend with some natural disaster or another, for example, floods or disastrous droughts such as the one we are experiencing at present, and which require swift, ad hoc action. When one considers all these factors, one realizes what a tremendous task it is to order this industry in such a way that one is able to take one’s people all the way with one. Our agricultural policy must be drawn up in such a way that our farmers will always be able to remain farmers, and that is why our policy is aimed at optimum agricultural development, development that does not seek to suddenly snatch everything away without taking future generations into account.

With this objective in mind, we are compelled to base our agricultural policy on three pillars in particular, firstly, optimum utilization of agricultural resources, secondly, orderly marketing and regulated measures for stabilizing prices, and, thirdly, financing and assistance. In order to achieve this, a number of laws have been passed over the years, but in general, the Government’s agricultural policy for the most part is based on four of the most important statutes. I now want to mention these four statutes in order of importance, as I see it.

The first is the Marketing Act. Today there are many people who criticize our Marketing Act, with its system of control boards. I should like to divide the critics of this Act into two categories. The first category includes those who do not know what farming looked like before this Act came into operation, whereas the second category includes those who, because of the Marketing Act, were unable to exploit farmers, take advantage of them or bleed them dry. I could dwell at length on this subject, but there are other hon. members on this side of the House who will deal with it in more detail.

The second Act on which our agricultural policy is based is, in my opinion, is Conservation of Agricultural Resources Act, or the Soil Conservation Act, as it is called. This Act is aimed at the optimum utilization of our soil, but in such a way that the people of South Africa and future generations will still have food to eat and clothes to wear.

The third Act around which our agricultural policy revolves, is the Co-operative Societies Act. This is the Act that provides the farmer with his commercial arm. Not only do co-operatives provide farmers with the necessary inputs, but they also see to it that farmers’ products are received and handled in such a way that the farmer does not lose his way over what he has produced.

The fourth Act is the Land Bank Act. This Act is not administered by the Department of Agriculture, but an agricultural policy would be difficult to implement without the major financing role the Land Bank plays in agriculture. Special financing facilities are essential to generate confidence in the agricultural industry. In addition to the Land Bank, there is, of course, the Financial Assistance Branch, or Agricultural Credit, as it is called, whose function in this process is to deal with many facets of agriculture that fall outside the jurisdiction of the Land Bank, but which still fall within the broad agricultural policy. Not only does the Government have an effective agricultural policy, it also has a flexible policy which is continually being adapted, and obsolescence and stagnation are guarded against. Facts we should take into account in this regard are that the Department of Agriculture has the largest research department in the country and that the Department of Agriculture has a programme of assistance for almost every imaginable crisis. We need only think of the drought aid scheme in all its facets. For example, we call to mind the emergency relief scheme after the Laingsburg flood, which was fully operational within a few weeks. I could mention many other cases. Whether it is long-term, short-term or ad hoc measures that are necessary, the Department of Agriculture takes the necessary steps.

I want to mention something else that I found very commendable and which the farmers of South Africa and I can be proud of. Our department consists of more than 8 000 officials, a large percentage of whom are highly qualified. We have a Minister and a Deputy Minister who are practical farmers, and all these people co-operate closely with the S.A. Agricultural Union, which is the farmers’ own organization. The extremely important role of the S.A. Agricultural Union in respect of agricultural policy in South Africa, of course, requires a lengthy speech in itself.

In a debate such as this, it would be unusual for me to make a speech on agricultural policy without at the same time putting a request to the hon. the Minister and his department. It is almost with hesitation that I associate myself with the hon. member for Barberton by saying that nowadays there are many things that are done purely for the sake of agriculture, and which are not justifiable economically. I appeal to the hon. the Minister to use all the brainpower in his department, in an effort to devise and design á scheme to attract young farmers to our industry. The country cannot rely on the sons of wealthy farmers who inherit land. With a view to the future, the State must make it possible for the thousands of able bodied young men who long to own land, to do so. The cost is not important.

My second urgent request is that more positive action be taken to create special concessions for the farmers who occupy border farms—take note, I say “occupy”. Once a farmer has left a border farm, it will be difficult to get those farms re-occupied. We cannot afford to have ghost farms on our borders. The Department of Agriculture, with its wide sphere of action, compels our admiration, and we wish our Ministers and their officials everything of the very best.

Mr. Chairman, I should like to congratulate the hon. member for Queenstown on his fine speech. I agree with him, particularly in his plea for special concessions for our border farmers.

The agricultural sector plays a major role in the economy of South Africa, and I want to mention a few examples in this regard. It is estimated that approximately one-third of our industries and approximately 38% of retail purchases are linked to agriculture. It is even said that there are certain regions where the figure could be as high as 80%. For example, I am thinking here of the Free State. Therefore it is very clear that an unstable agricultural sector, and markedly fluctuating incomes in particular, must definitely influence the economy of South Africa. Moreover, we could ask: How has the deteriorating financial situation in agriculture since 1974 contributed to the depopulation of the rural areas? The need for sufficient agricultural production lies, in particular, in meeting the marked increase in the demand for food over the next 17 years. It is estimated that the total expenditure on food, excluding inflation, will increase by 150%, from R10 000 million in 1980 to R25 000 million over the next 17 years. Furthermore, this means that it is essential for the agricultural sector to be both financially sound and in a position to grow. Unfortunately this is not the case in the agricultural sector. There is more than sufficient evidence that the financial position of the agricultural sector has deteriorated seriously, particularly since 1974 and 1975.

I want to refer to examples in this regard. During 1974, the farmers of South Africa spent approximately 50 cents on acquired inputs to earn an income of R1, but in 1981 the farmer had to spend 100% more in order to maintain the same income, and in 1982 he had to spend 234% more than in 1974 in order to maintain the same income. In order to continue with production, farmers were compelled to borrow more money. In 1974 farmers had to borrow 40 cents for an income of R1. In 1981 they had to negotiate 68% more short-term credit in order to maintain the same income. Even worse: In 1982 the farmers of South Africa had to make use of 270% more short-term credit in order to maintain the same income. Therefore it is no wonder that the financial position of farmers has deteriorated, and this is going to have serious consequences for our country. A people that takes care of its agriculture, provides for its future.

Three factors in particular that are making a definite contribution to the deteriorating financial position of farmers are being singled out. The farmers in South Africa are unable to recover cost increases in the price of their products, and particularly not in times of inflation such as the Republic of South Africa has been experiencing over the past few years. However the marketing legislation, which is vital, is not geared to recovering farmers’ costs in times of inflation.

In this regard the record speaks for itself. As a result of supply and demand, as well as political pressure, the farmer is unable to recover his costs. For example, the farmer’s input prices increased by 230% from 1974 to 1982, whereas the prices of the farmer’s products have increased by only 136%. It is also important to note that the farmer’s cost increases are much higher than those in the remainder of the economy.

The argument that South Africa’s population cannot afford food, is absolute nonsense. A study carried out by the AHI among factory workers, in which salaries were compared with the prices of products, using, in particular, the length of time a person had to work in 1960, as opposed to in 1981, in order to be able to purchase a certain item, revealed that the White factory worker worked 65,6% fewer minutes than in 1960 in order to be able to purchase a basket of certain products. The Blacks worked 73,7% fewer minutes. Thus a Black factory worker had to work approximately 372 minutes in 1960 to be able to purchase a leg of mutton, but in 1981 he had to work only 240 minutes to be able to purchase a leg of mutton. Therefore he had to work 45% fewer minutes to be able to purchase that leg of mutton. These estimates confirm not only that the consumer’s standard of living has increased markedly, but also that he definitely pays too little for his food, and that the farmer has to accept a deteriorating financial position so that the financial position of the urban consumer may be improved.

The second matter is the question of the protection of domestic industries. The hon. the Minister of Industries, Commerce and Tourism refuses to concede that the protection of domestic industries is prejudicing agriculture. However, the hon. the Minister may be interested to know what leading economists have to say. For example, the economic adviser to the hon. the Prime Minister supports the view that the protection of domestic industries is detrimental to agriculture. I could also refer to a statement made by Prof. Lombard, the special adviser on economic co-operation.

The final factor to be mentioned is the monetary policy. The virtual doubling of interest rates over the past two years, based on the so-called market-related monetary system, as well as the change in the Land Bank’s method of funding as a result of pressure groups, have ruined the farmers of South Africa. As indicated earlier, the farmers have to make increasing use of credit in the production process, and after the farmer has negotiated production credit, and the production process has been put into operation, he cannot halt the process if interest rates increase. What happens is that the farmer has to pay for this even if he finds himself in a drought year, such as this year. Allow me to give an example. In 1980 agriculture paid only R276 million in interest, but in 1982 it amounted to approximately R936 million. This represents an increase of 239%. If one compares interest with agriculture’s net income, one sees that in 1980 it was approximately 11%, and approximately 47% in 1982.

In conculsion, I should like to make certain suggestions. Firstly, I propose that the Government, in co-operation with organized agriculture, take purposeful steps to establish an agricultural strategy as an integral part of the economic strategy of the RSA. The Departments of Industries, Commerce and Tourism, Finance, Environment Affairs and others, should be fully involved in this. Matters which should be given special attention include the following: The rural areas should be extended and stabilized by way of an appropriate policy aimed at agriculture as part of the Government’s policy of decentralization; further effective steps should be taken to improve the financial position of the farmer by considering, in particular, how the costs of the farmer may be recovered. [Time expired.]

Mr. Chairman, the hon. member for De Aar has made a positive contribution in respect of the farmer, except that he said a few things which we are very well aware of. He spoke about the depopulation of the rural areas. After all, this is a problem with which the Government is grappling day and night in the presnet drought and recessionary conditions. I think it must be said that the hon. the Minister and the hon. the Deputy Minister are taking extraordinary measures to relieve this situation. I want to remind the hon. member of the fact that similar conditions in the thirties had very serious consequences for the farmers who had to contend with drought and recessionary conditions as well. These were certainly very serious consequences. It goes to show that we have learned many lessons, and many positive steps have been taken. In this way, for example, the Jacobs Committee has been appointed, which is investigating the problems on an on-going basis. No one is denying that there are problems.

I want to dwell for a moment on the meat industry, one of the industries in agriculture which is very important to us, also in view of the fact that the people on the northern borders of our country are mainly cattle farmers and meat producers. This industry has gone through a crisis in the past few years. The recession, the drought and the world meat surplus led to the greatest crisis this industry has ever been faced with. We were simply forced to market our livestock. That is why I say that we owe a debt of gratitude to the Meat Board. I cannot imagine what would have happened today if the Meat Board had not been there to make attempts to resolve this situation. In this connection I want to refer in particular to the chairman of the Meat Board, Mr. du Toit, and the general manager, Dr. Coetzee. In spite of all the criticism they had to endure, they made breakthroughs in the marketing of meat. They took positive action and did their work in a market-orientated way during this crisis period.

We should take cognizance of the schemes launched by Dr. Coetzee. In October last year, the situation began to assume serious proportions. The cold storage facilities of the Meat Board were filled to capacity. The Meat Board could not buy any more meat and could no longer help the farmers. The prices paid for livestock at auctions in the rural areas dropped sharply, as a result of the marketing pressure in the urban and controlled areas. As a result, there was a decline in the meat price. In spite of this decline in the price received by the farmer, which was a drastic one, the retailer did not co-operate by passing on that lower price to the consumer. Dr. Coetzee made a determined attempt to obtain the co-operation of the producer and the meat retailer or distributor. It was no easy task. In October last year, he came up with a subsidy scheme, which unfortunately lasted only three days. However, the consumer showed that he was willing to buy the meat, but I am afraid that Dr. Coetzee could only obtain the co-operation of just over half of the dealers. As a result, this scheme was not so successful.

The second attempt was made in December last year, when the surplus meat was sold at 20c less than the floor price. This led to an increase of 31% in meat consumption, but once again it was not possible to ensure that this benefit was passed on to the consumer.

In spite of criticism, Dr. Coetzee made a third attempt. In terms of an extremely successful scheme, a discount of between 20% and 30% was given. It was said that if the dealer and the butcher did not pass on the benefit to the consumer, the Meat Board would do so itself. The final distributors cooperated and the benefit was passed on to the consumers. The result was that within 14 days, 270 000 cartons of meat with a mass of 25 kg each were bought by consumers. Instead of the meat remaining in the cold storage facilities of the Meat Board, tying up the capital involved, it ended up in the freezers of housewives. 46 000 carcases were involved and 90% of the meat, which had been removed from the bone, was sold in this way. The general manager of the Meat Board should receive credit for the fact that he saw to it that the meat was removed from the bone. Bull Brand also intends to can 80 000 head of cattle of a lower quality of meat, in order to help the producers. The Meat Board also gave a discount of R1 a kg to old age homes, children’s homes and orphanages, and this led to increased consumption. We can see that farmers find themselves in a dilemma. During the period April to June this year, 400 000 livestock units were offered in terms of the permit system, while only 100 000 units may be accepted. One asks oneself which is better, the quota system or the permit system. While the permit system is under such pressure, one encounters a very great deal of criticism and irregularities. The Meat Board has already threatened to institute proceedings in cases of fraud or in cases where these lies about permits continue. Between January and June only 30% to 40% of those who wanted to market were able to obtain permits. The quota system applies in the Eastern Cape and in Natal and those people are happy with that system. In those areas, a situation of confidence has been created between the people who operate the quota, i.e. the co-operatives, and the farmers. As a result, the people voted in favour of it. I believe the hon. the Minister should have the matter thoroughly investigated so that we may ascertain which system best serves the interests of the meat industry.

As far as white meat is concerned, we shall have to improve matters in the industry in future. It is envisaged that beef production will increase by 18% by the year 2000. During the same time, the per capita consumption will drop by 40%. On the other hand, white meat consumption will rise by 147% the per capita consumption will also rise by 57%, instead of dropping. Therefore we say that the fault does not lie with the consumer. We should rather try to offer competitive prices and to improve our quality. We are pricing ourselves out of the market. White meat presents a serious threat to us, while the red meat producer is not receiving the benefit he should.

There are various reasons for this. The chain is too long, for one thing, and there are other reasons as well. We do not want weekend consumers of red meat in this country. We want traditional consumers, because we are traditional red meat consumers. The fault does not lie with the consumer. It lies with us. We must investigate these matters ourselves. We must consider quite a number of aspects. Among other things, we should examine the question of the ban on the slaughter of meat outside controlled areas and the introduction of that meat into controlled areas. We should reexamine this matter.

We speak of decentralization, but the most important product of people living in the remote rural areas is beef. Why should these animals be transported live to the abattoir? Why can the cattle not be slaughtered in those areas, while the meat, boned meat, or canned meat, is transported to the consumer areas? Is this not the obvious thing to do? Should the hon. the Minister not investigate the red meat industry? If the big entrepreneurs take over the red meat industry, the depopulation of the rural areas will accelerate. This will have serious consequences for the ability of our people to defend themselves. What is happening in the rural areas at the moment is that the big entrepreneur becomes a breeder and a supplier of fodder and then he buys his own butchery. He is involved in the whole process, from beginning to end. But what becomes of the small man?

Mr. Chairman, with reference to the speech made by the previous hon. speaker I just wish to say that for us as cattle farmers it would be a bad day if the permit system is again replaced by the quota system, for under the quota system one is at the mercy of the agents. The agents prefer to give the quota to the speculator because then they make a profit twice in the process. They make a profit at the auction as well as on the market. The ordinary producer cannot get into the market. I hope the hon. the Minister has been listening carefully.

Actually I should have spoken before the previous hon. speaker because I should like to discuss maize. I shall begin by asking the hon. member for Barberton, the main speaker of the CP on agricultural matters—I need his answer for my argument—for the viewpoint of the CP on the fact that the Maize Board also exports maize to communist countries directly and indirectly.

The only reason I am asking this, except for the sake of my argument, is to demonstrate to the hon. member how difficult it is to convert ideals into a practical policy.

When I discuss the maize industry I want to say in advance that hon. member must accept that I am working with 1981 prices—I am using an economic inflator—and a production of 4,05 million ton. On that basis we have an industry which is worth R1,5 milliard this year. The replacement value of our plus minus 220 grain elevators is R1 milliard. An amount of RO,5 milliard is invested in trucks. That is why it was gratifying to see that when the present hon. Minister was appointed he decided that the maize industry should be thoroughly investigated by a special commission. I want to congratulate the hon. the Minister on the work which the Reinecke Commission has done in this connection. The Reinecke Commission identified and pointed out certain things to us. So for example they pointed out that because it was the policy to minimize the transport of maize for local consumption, this would cost the industry R2,2 million in aggregate. If the industry had been able to export 1,5 million tons through Durban harbour and could have had Richard’s Bay as an export harbour, we could have effected a saving of R14,7 million. The importance of this is that the costs of the various export routes are being quantified. We can negotiate with the Government and say: Here are the facts we are talking about on which you should accommodate us. This is expenditure which we are having to incur in the national interests.

The Reinecke Commission also pointed out that popular assumptions that have also been made by important organizations were incorrect. The Reinecke Commission pointed out that if one took into consideration the fact that the silo capacity in the country was increasing by 150 000 tons per annum and if one built macro-silos of 267 000 tons instead of a normal silo of 60 000 tons, it would bring about a saving of R3 million in building costs. However, those people who advocated macro-transit-silos forgot to take into consideration the fact that additional trucks would be required in peak periods to convey the maize to the macro-transit-silos. If one includes this in the calculation one realizes that in effect they would represent a net loss to the industry of R140 million. Consequently, with the macro-transit-silo industry it was a completely incorrect hypothesis which was generally postulated. In addition, on the same principle, it was pointed out by the Reinecke Commission, because they saw the matter in its totality, that the proposal by Nampo which stated that we should build a macro-silo at Richard’s Bay in order to catch the peak market and that it would be economic, was not an economic proposition either. The commission has brought realism to the industry. With this realism we can approach the Government and try to negotiate for our industry. However, if we continue at the present rate of export and if we follow the present tendency, we shall by the year 2000 have a cumulative export loss of R3 milliard in the maize industry.

At present the net loss in foreign exchange is R200 million. The break-even point between export losses under the present tendency and the acquisition of foreign exchange will be reached by the year 1989.

Having said this we must decide what our actual viewpoint is. Is it our viewpoint that we are going to remain at an export level of 5 million tons at this break-even point in 1989, or is the Government of the opinion that, for the sake of the provision of employment in agriculture, it is going to adopt the same incentive measures as in industry, which also renders services and also makes employment opportunities available? What is the Government going to do in this respect? Furthermore, of course, it also depends on what the Government’s policy in respect of foreign markets is going to be at that stage. Is the Government going to utilize all foreign markets or is it, owing to ideological principles, going to exclude certain foreign markets? This is also the question which I put earlier to hon. members of the CP and to which we have so far had no reply.

The question is whether the present tendencies in the world grain trade are going to be maintained or whether we are in the process of a structural change as far as our maize exports are concerned. To reply to this question one must take note of the following matters. At the present stage America has a surplus of 6,6 million tons of maize. It has even been decided now to utilize that maize for the manufacture of fuel. Do we therefore expect now that, owing to the extremely favourable climatological conditions in the northern hemisphere that favourable maize production is going to be maintained, or is it going to diminish? The next question is what we expect is going to happen in the under-developed countries. At present America is exporting agricultural products to other countries, agricultural products which it subsidizes to the tune of R46 milliard. This amount is more than twice our total national budget. Now the next question arises: In view of the fact that America’s importance as an international trading country vis-à-vis that of the rest of the world is declining and is at present approximately the same as that of the European Common Market, will it be possible to maintain this situation—I am referring to the continuous subsidization of agricultural product—or not?

That brings me to my next question. Is there any hope that the developing countries to which we export will in future have enough money to pay for the produce which they import from us? Next I wish to ask whether there is any evidence to suggest that the under-developed countries whose agricultural sectors are very weak, could possibly create a viable agricultural situation, enabling them to produce sufficient crops of their own?

Mr. Chairman, I have put all these questions with a view to ascertaining whether a structural change is taking place. I wish to suggest that before we decide what is going to happen to Richard’s Bay, we should first institute a probing investigation into all the socio-political aspects to which I have just referred in order to establish whether our exports are possibly going to rise above the 5 million ton mark or whether they are perhaps going to decline? [Time expired.]

Mr. Chairman, I always find it interesting to listen to the hon. member for Heilbron because he is very involved in the agricultural field, both in farming and in the co-operative movement. He has outlined very clearly some of the problems we face in agriculture. When his time expired he was building up the argument that the countries that can afford to import our agricultural products are the countries that do not really need them, while the countries that do need our products, the countries that have shortages and to which we could export profitably, do not have the money to pay for our products.

There is one point, Mr. Chairman, I should like to make before moving on to the topic I wish to discuss here today. The hon. member for Ventersdorp lodged a plea with the hon. the Minister in connection with the granting of credit to part-time farmers. I believe that this is terribly important for this country. It is one way in which farmers can become established and it is extremely important that in that establishment phase those farmers are able to obtain a regular source of income from elsewhere.

We also welcome the announcement by the hon. the Minister that he is going to table a White Paper on agricultural policy. I hope that before he does so he will canvass as wide a spectrum of opinion as possible. We certainly need to take another look at our agricultural policy and I should like to emphasize one or two points which I believe to be important.

Firstly, in the debate today there has been a wide measure of agreement on the part of all parties in this Committee as to the problem of expensive agricultural inputs. I do not wish to devote very much time to this matter as it has been well covered but I really do believe that the time is ripe for the hon. the Minister of Industries, Commerce and Tourism to make a decision in this regard. We cannot allow this issue to drift on month after month. Farmers are buying fertilizer today, they are buying tractors today, the new season is at hand, and this question of high input costs is really a very vexed one indeed. One policy to which we on this side of the House have subscribed is that if it is not possible to allow importation perhaps for strategic reasons or by virtue of the fact that such a step would create hardship for local industry, we believe that subsidizing inputs in this country could be done to advantage. For example, subsidizing the cost of fertilizer would in fact spread the cost over our whole society. Secondly, subsidizing the cost of an input at source will eventually work through and result in cheaper food prices to the consumer. Thirdly, this would result in a reduction in the final consumer subsidies which we are paying at the moment on many products. There would therefore be a saving at the other end of the production process.

While on the subject of subsidies, a further issue I should like to discuss is the question of the bread and maize subsidies. Last year the subsidy on bread was approximately R230 million, while the subsidy on maize, mainly in regard to the distribution margin, amounted to approximately R96 million. We believe that the emphasis on these subsidies should be changed. We would rather see more money being spent on subsidizing maize than on bread. The reason for this is very simple. Maize is the staple food of most people who need a subsidy and therefore from the point of view of helping the people at the lower end of the economic ladder, it would be better to increase the subsidy on maize. This would also to a certain extent assist maize farmers although it would be to the disadvantage of wheat farmers. That I accept. However, that is a play-off on which the hon. the Minister will have to decide on.

Looking at agricultural policy we also believe there is scope for rationalization in a large number of control boards. Although we are not opposed to the Marketing Act or Boards as such I wish to mention a few control boards today by way of an example. By this I do not intend to criticize these various boards but this certainly is the type of area that could be looked at when the White Paper is being drawn up. Let us take the example of pears and apricots. These products are handled by three different boards namely the Deciduous Fruit Board, the Dried Fruit Board, and the Canning Board. Is it really necessary that one product be handled by three boards? As far as the Canning Board is concerned, we know that there are serious problems in the canning industry at the moment. As far as the Dried Fruit Board is concerned, we know that the export market for dried fruit is fairly buoyant at the moment. The Dried Fruit Board makes recommendations in regard to who their agents will be and they also issue all the export permits. Is this really in the interests of farmers? This is the sort of question that we should be looking at.

Let us also take the case of summer grains. They all grow in the same areas and they often compete for the same land. Is it necessary to have separate boards such as the Maize Board, the Oil Seeds Board and the Dried Bean Board? Perhaps the activities of these boards could be better rationalized under one umbrella body. Then of course there are many other boards—I use these again as examples—most of whose work is done by the co-operatives or agents. I cannot even see the reason for their existence at all. I am not saying that they are doing any harm, but one has for example the Citrus Board. Their work is mainly done by the Citrus Exchange. If we look at the Wheat Board, we find that it is mainly the co-operatives which carry out all the tasks of handling, selling and distributing wheat in the country. Although I do not say that these boards are doing harm, I really cannot see why we should have them. The Dried Bean Board is another board that comes to mind. The co-operatives do all the handling, all the distribution of beans.

There is another policy which should be given attention. I refer to the pricing policy. I think it is generally accepted that the one-channel price schemes are the areas where we are having the most problems in agriculture. I believe a lot of the boards have recognized this. Even the Maize Board, for example, has indicated a willingness to move away from the single-price system to a more market-orientated system. Again I hope that this will be dealt with in the White Paper.

Another aspect of pricing ties in very closely with what a few other hon. members have said today on the depopulation of rural areas. I believe it is something which does not get enough attention. I take as an example the question of a single price for maize throughout the country. What does such a single price do? It means first of all that we have maize feed mills established for example in Natal and the Cape. Mills are established far from the production areas because the miller pays the same price for his maize whether he is here in Cape Town, Natal or in the maize belt. What happens is that all the associated industries like feedlots and abattoirs, which one hon. member mentioned today, get established outside the production areas which are usually the rural areas. That all stems from the single-pricing system we operate.

Something else that happens because of the single-pricing system is that a lot of small mills and small industries get squeezed out because they do not have the geographical advantage they would normally have by virtue of their location. It is quite simple to see what is happening in a lot of cases. I have some figures comparing the producers’ price and the consumers’ price of maize meal. In 1971 when price control was removed from maize products at the consumer level, the margin that millers were making was 31%. It is now 62%. [Time expired.]

Mr. Chairman, it is with pleasure that I follow the hon. member for Pietermaritzburg South. In his speech he referred to the rural areas and the depopulation of these areas. I think this is one of the matters on which we are all agreed and perhaps I could suggest that next year, if we are given an opportunity to move private member’s motions, we discuss a motion on the depopulation of the rural areas. Then we could ascertain what the Opposition’s contributions and suggestions are as to how the Government could further solve this problem.

In my speech I wish to refer to the financial position of the farmer, and in particular to that of the maize farmer. In addition I wish to refer to certain problems and to specific long-term proposals. Many people believe that the cause of the financial predicament in which farmers find themselves, should be sought only in the drought, but that is not the whole truth. It was specifically the drought which brought the problems in agriculture to our attention.

I see the aid announced by the hon. the Prime Minister as short-term aid which is firstly aimed at keeping the most efficient farmers on their farms, and in the second place the aid must enable the farmers to carry on producing during the next season. My plea in this connection is that the Land Bank and the Agricultural Credit Board should, as in the past, do their utmost to administer these schemes to the best of their ability. I also wish to thank them for the help they have given our farmers in these times.

During the ten year period from 1971 to 1981 the total agricultural debt trebled to R4 900 million. Present estimates indicate a debt of more than R6 000, as against an estimated capital value of R33 300 million. This means an 18% ratio of debts to assets in agriculture. Financial experts are of the opinion that this is the highest percentage in history.

The financial position of the farmer, and specifically that of the maize farmer, was brought further into the limelight by an investigation conducted in the Western Transvaal and Eastern Transvaal by two co-operatives in those regions. A group of farmers were used that can be termed better than average. In this study a projection was made of the probable course of the maize industry of the producer over the four years from 1982-’83 up to and including 1985-’86. The result of the investigation indicated that the accumulated deficit per hectare of maize after four years in the western maize producing region will amount to R279 per hectare and to R237 per hectare in the eastern maize producing region. In my own constituency a random survey was conducted among maize fanners and it was also demonstrated that the financial position of the maize farmer in the South Western Transvaal is even more critical. One interesting tendency which the study brought to light was that the bulk of the farmers’ debt in this particular region was not so much with the co-operative, but with private commercial bodies.

I believe that the main reason for this situation is that the input costs of agriculture increased exceptionally rapidly in proportion to the increase in produce prices. From 1974 up to and including 1981 the input costs rose by 182%, as against an increase of only 117% in the produce prices. Although increased yields and improved production techniques did occur, it could not prevent the weakened financial position of the maize farmer. The situation has deteriorated to such an extent in respect of the producer that it will be very difficult to rectify it merely by means of an increase in agricultural produce prices. From figures which I have obtained it appears that the production costs per hectare in respect of the cultivating of maize lie between R360 and R400. If the maize farmer, as has happened during the past two years, has crop failures, it could happen that he will never get ahead again.

Long-term solutions will have to be considered. We shall have to search for such solutions, and every party in this House will have to make suggestions. One of the solutions which I want to suggest is that ways and means should be sought without delay to force down the input costs of agriculture. The Bureau for Economic Policy and Analysis at the University of Pretoria has at present been commissioned by the hon. the Minister of Industries, Commerce and Tourism, to investigate the matter of protection by means of import tariffs. Provinsional information submitted to the S.A. Agricultural Union indicates that in some cases there is in fact a significant cost-increasing effect as a result of protection. However, I do not wish to anticipate the investigation, but wish to address a request to the hon. the Minister and the hon. the Deputy Minister of Agriculture that if Bepa’s investigation indicates that protective measures are conducive to production cost increases, attention will have to be given to this matter. We as farmers do not adopt an irresponsible attitude to the protection of strategic industries, but if those industries have to be maintained to the benefit of the whole country, agriculture alone should not be held responsible for it, but rather the taxpayers in general. I wish to suggest that funds be allocated from the central budget to such strategic industries.

Too much marginal land in our country is still being planted to field crops. In good years this causes unnecessary surpluses in respect of certain products and in bad years those farmers fall behind because they continue to plant maize on marginal land. The reason for that is that it is easier for them to obtain a loan for the cultivation of field crops. Agricultural credit grants such loans up to and including an amount of R50 000. If one could grant similar loans to farmers in marginal areas in respect of the purchase of livestock and the establishment of grass, one would be allowing these farmers the choice of making more responsible decisions as to how they could use their land more purposefully. I also think it is time we accepted the principle that agricultural financing should be of such a nature that it enables the farmer to utilize his land correctly. I want to make an appeal to co-operatives to take up their credit requirements fully within the principles which the Land Bank lays down so that they, on their part, can also help farmers in this connection.

A matter of which I have already advocated in the past I again wish to offer today as an important long-term solution. In good years farmers must be able to invest surplus funds with the Land Bank or other approved institutions.

Hear, hear!

These funds should only be subject to income-tax in the year of withdrawal. This is one of the important recommendations which the Jacobs Committee made in 1979, but which has not been accepted by the Department of Finance. A moment ago I heard the hon. member for Ventersdorp saying “Hear, hear!”. He advocated this matter on another occasion and this afternoon I wish to second him once again. A portion of this principle of the proposal of the Jacobs Committee in 1979 was in fact accepted in the concession which the Department of Finance and the Land Bank made to farmers who are now being forced to sell their livestock. On this basis I would ask that the principle be expanded to agriculture in general.

Our long-term policy will also have to be aimed, with co-ordinated research and extension, at helping the farmer to keep on producing effectively. Modern and effective farming methods are at present contributing to keeping these farmers on their farms. In the past the Department of Agriculture and the co-operatives have made a major contribution in this sphere, and I believe that as far as the future is concerned, a great responsibility rests on their shoulders.

I want to conclude by saying that I am concerned about the fact that very few young people are taking up agriculture. From figures which I have obtained it appears that the average age of farmers today is 51,6 years. If a plant or a tree is to keep on living it has to produce new leaves. New leaves must replace the old ones. [Interjections.] This is true of all industries, but particularly agriculture. Today I wish to ask the hon. the Minister to ensure that serious attention is devoted to the establishment of young farmers. The Department of Agriculture has already done a great deal in this connection. If it is possible I wish to ask whether the Jacobs Committee cannot in this connection be given the task of putting subsequent proposals to the Government.

The farmers of South Africa will accept the crisis which they have encountered as a challenge and they will not give in. Even if they do not have money at the moment, they have a lot of courage and a lot of hope. To a farmer a bottle is not half empty, but half full.

Mr. Chairman, I like to follow the hon. member for Schweizer-Reneke. The hon. member’s constituency borders on mine. It is only the Vaal River that separates us. Speaking of maize, I must admit, unfortunately, that I am in the firing line of the politics of maize. At least the hon. member has the Vaal River to protect him. I note that the hon. member’s father contends that it is still better to farm than to sit in Parliament for the meagre wage we get here.

I want to begin by making a statement which in fact is a strange one in the farming setup in South Africa, and that is that we may encounter the situation that there will be insufficient food to eat in this country, and that we may have money in our pockets but no food to buy. I do not believe that any of us wish that on anyone in South Africa. In spite of agriculture being the biggest industry in South Africa, crises have occurred in this industry over the past two to three years relating to production costs and inflation. The agricultural industry has also had to forfeit certain profits as other industries, too, have had to do. I contend that farming has been hardest hit by these circumstances. If one analyzes the financial situation of agriculture before the present drought took hold, we see that the net farming revenue of agriculture for 1982, as determined by the Department of Agriculture, is estimated at R1 988 million as against a figure of R2 671 million for 1981. That represents a decline of R683 million, or 25,6%. This puts us back in the position we were in four years ago.

In 1982 interest payments increased to R903 million. This represents an increase of R356 million in one year. If we compare this with 1979 there has been an increase of 344%. This increase in interest is not due only to high interest rates but also to the heavier burden of debt on which interest has to be paid. The S.A. Agricultural Union contends that if the 1979 figure is compared with that of 1982 it is evident that the gross farming revenue has increased by 59,8%, whereas the expenditure on intermediary goods and services as well as interest payments has increased by 108,9% and net farming income by a mere 25,6%.

In 1970 short-term debt comprised only about 28,6% of the total farming debt. In 1981 it comprised 45,6%. The figure for 1983 is not yet available but I fear that it will be a shocking figure. The drought will probably be the major cause of this.

One would be justified in asking whether the efficiency of the producer is not an additional cause of the deteriorating situation. Once again statistics prove that efficiency has been improved considerably. For example, in 1970 capital assets of R6,69 were utilized to produce R1. In 1981 capital assets of only R4,51 were used to produce R1. This attests to an increase in efficiency. Up to 1978 the ratio of capital investment to production results was relatively healthy. The rocketing costs of means of production, the lower revenue in relation to cost and now, in addition, the almost total crop failure due to the drought, are going to result in a total imbalance.

Taking into account the agricultural value of our land as determined by the Land Bank and the Agricultural Credit Board I contend that the proportion of liabilities to assets is now no longer at a sound level. In any effort to improve the position of agriculture it will in the first place be necessary to take inflation into account. If inflation increases, the financial situation of the farmer will deteriorate further. I believe that the commercial and industrial sectors will be the first to have to begin to contribute by bringing down their price structures. If that does not happen, food prices will have to increase.

Then again we are faced with the inflation spiral which causes endless further difficulty. The fact remains that food has to be produced. The State cannot solve all the problems by way of subsidies. Accordingly the situation requires a team effort from all involved. This is in the interests of every sector.

I have already said that I, too, represent a maize area. It is an area from which severe criticism is sometimes expressed concerning standpoints adopted by the Government and in particular the Minister of Agriculture, whoever he may be. There is really a lack of mutual understanding, and at this point it is not relevant who is responsible for this. What is important is that the maize farmer and his organization, Nampo, are unable to solve problems single-handed. Nor can the hon. member solve the problems single-handed. Therefore there must be co-operation. I wish to make the request today that Nampo and the hon. the Minister conduct on-going discussions, without reservations as to how and where and when the discussions are to take place and under what conditions this must happen. The maize industry is a sensitive industry due to factors and circumstances that it is not always humanly possible to determine in advance. Therefore an atmosphere of greater understanding must be created in order to eliminate unnecessary recriminations. A situation of mutual trust must be created. If trust is not established, there will be a sowing of suspicion that will not be to anyone’s benefit, least of all that of the maize industry. It does not matter who is right or wrong. I just wish to mention one example of what happened this year. I blame no-one for this; I just want to indicate the role played by the unknown in particular in the maize industry. The Maize Board saw fit to sell and export the 1982 maize surplus as quickly as possible. If they had decided to do the contrary it would have been possible to realize considerably more, because over the past months there has been a rise in the world price and if internally we could have had a bigger transfer to this year, the consumer would have had to pay R177 per ton for last year’s maize which, at the time, cost R155 per ton. A considerable profit could have been made in this way. If one could see into the future this kind of thing could be prevented, but specifically because we are unable to foresee it, this mutual understanding must be created and there must be mutual trust that no one is cheating anyone else or discrediting them in the process. [Time expired.]

Mr. Chairman, I should like to make a few general observations about the deterioration of the rural areas. Then I wish to concentrate more specifically on the problem in the designated areas. It has virtually become the practice to discuss the depopulation of the rural areas in this House every year. I should like, by way of a change, to refer to this as the deterioration of the rural areas. There are various sectors in the rural areas which are seriously affected by what I wish to call the increasing impoverishment, the increasing deterioration of the rural areas. Firstly, there is the farming community, and other hon. members have already pointed out this afternoon that all of us are gravely concerned about the increasing burden of debt of the farmers. If there is one factor which contributes to the deterioration and depopulation of the rural areas, it is most certainly the fact that our farmers are becoming impoverished. The second sector which is very seriously affected by the deterioration in the rural areas is the small town communities which consist of the thousands of officials everywhere in our country towns, professional people such as attorneys, medical practitioners and pharmacists and then, too, the thousands of businessmen everywhere in the rural areas. I venture to say that if things are going badly for the farmers in the rural areas, they are going just as badly for these rural communities and towns.

The third sector which is seriously affected by this deterioration is our Black population. As the Whites move out of the impoverished rural areas, thousands upon thousands of Black people also move away, Black people who lived with their families in the rural areas for years, but who as a result of the conditions of impoverishment and deterioration in the rural areas are compelled to seek a livelihood elsewhere. I wish to add here at once that if relations, working conditions and employment opportunities for Black people are suitable, this is at least a factor which contributes to keeping them on the farms.

A fourth sector that is seriously affected by the deterioration of the rural areas is undoubtedly the rural industries and factories that have close ties with the farmer and his farming activities. The financial deterioration of the farmer is and remains the greatest single factor which can be advanced as a reason for the deterioration and impoverishment of the rural areas. That is why it is necessary for us to seek permanent solutions in order to halt this deterioration. That is why we are also grateful that the hon. the Minister has indicated that a serious investigation is going to be carried out in that respect as well, and that a White Paper is also going to be published by the Government. The question which occurred to me was whether it was not time a Parliamentary Committee was appointed to investigate the entire deteriorating situation in the rural areas. However, we know that the measures which are constantly being adopted are merely of a temporary nature. They merely bring temporary relief. Therefore it is necessary for all of us in this House to take notice of the red lights which are constantly flashing in the rural areas to warn us about the deterioration of these important areas of our country.

However, it is also true that there are rays of light in the rural areas. I wish to refer to this because I think one should perceive these things as well. I want to refer here to the part played by our co-operatives in the rural areas. I believe that we can refer to this with much gratitude. The co-operatives are after all the business arm of the farmers, and by means of this arm the State also reaches out a helping hand to our farmers. We believe that the burgeoning role of co-operatives is and is going to be of great importance in the process of making the rural areas strong again.

Next, however, I want to confine myself to that rural area in which the deterioration is probably the most serious. These are the designated areas; the areas situated along the north western boundaries of the Transvaal, adjoining Botswana and Zimbabwe. This year the emergency situation in those sparsely populated areas has become more clearly apparent than ever before to the people of South Africa, thanks to the programmes recently presented on television, by means of which those areas became more widely known to the people of South Africa and in which the realities of those areas were brought more clearly to the attention of our entire population. These are the people to whom the State has in recent years offered assistance, and tried to offer assistance. We all know about this. The hon. the Minister of Environmental Affairs and Fisheries in particular knows about the attempts made by way of legislation to repopulate those sparsely populated areas. Besides the legislation which we passed here in 1979, dealing with the promotion of population density in certain areas, there was of course other legislation before that time that had the same objective. For example there is legislation dealing with the unbeneficial occupation of farms. I am now referring to Act No. 29 of 1937, legislation which has, up to now, never been put into operation. Consequently there have been attempts on the part of the State to deal with this particular problem with which we are struggling in the designated areas.

Yet there is a solution which we can suggest for those areas, and that is that the development possibilities in those particular areas should be investigated. There are such development possibilities. It is necessary for us to utilize the potential of those development areas. We should examine the areas in which there is sufficient water, for example the lower western section of the Crocodile River up to where it flows into the Limpopo and up to Buffelsdrif, and along the Marico River at Derdepoort. The potential of those areas is excellent. With the funds at our disposal which we can make available for prospective farmers in those areas, we will not be able to achieve the success which we could achieve if growth points could be established in those areas. This matter must be investigated. It must be accorded the highest priority. Hon. members know that the funds we have to make available to prospective farmers who wish to establish themselves in border areas, are rather limited. One need only consider the price of land in that region. If one compares the valuations of land made by the Department of Agricultural Credit in this specific area, valuations which vary between R120 and R200 per morgen, with the actual market price in those areas, which varies from between R300 to R400 per morgen for grazing land, then it is clear that with the financial aid which we have at our disposal we will only be able to help perhaps a few farmers to be resettled there. In the case of irrigation land the situation is far worse. While the valuation made by the Department of Agricultural Credit is perhaps R1 000 per morgen, the actual market value in those areas is sometimes as much as R3 000 per morgen. However, if we give attention to the development of actual growth points in those areas, we shall achieve far greater success with the resettlement of people there. [Time expired.]

Mr. Chairman, I have a few words to say about the Marketing Act and about agricultural financing. In the first instance, I want to thank hon. members in all three of the Opposition parties for the responsible speeches they have made in this Committee today, like the speech which the hon. member Mr. Theunissen has just made. I thank him for it. I have already said to the hon. member for Barberton that I think that he, too, made a very responsible speech this afternoon. He did not place his party’s interests above those of agriculture, because the party that seeks to do that in this Committee will be called to account by the farming community of South Africa. I also thank the hon. member for Barberton for having stated frankly that he and, I think, his party as well, stand by the Marketing Act as we know it today as the means whereby the farmer must market his product.

A great deal of criticism of the Marketing Act is being expressed nowadays. In one of the agricultural news journals the Marketing Act is referred to as a bankruptcy Act. The National Government established the Marketing Act and it has improved over the years with the help, of course, of all the various marketing boards, and we stand by it. We accept the Marketing Act with all its disadvantages. If there are people who want to change to a so-called free market system as far as agricultural products are concerned, they must know that they will have to accept that system with all its disadvantages, too. Both have advantages and disadvantages, but one has to accept the system with its advantages and disadvantages, and we are prepared to accept the Marketing Act together with the disadvantages it has at present. There are many important reasons for this. Let us say to one another this afternoon, in all honesty, that the agricultural industry simply cannot stand on its own, as other sectors of our economy can. It is necessary for the State to interfere in the market economy as far as agriculture is concerned, because this is done everywhere in the world. Nowhere in the world is there an agricultural industry in the economic operation of which the State does not interfere. There are reasons for this situation in agriculture. The first is that there is extreme competitiveness in agriculture. At present we have almost 70 000 farmers. They are all producers competing for a price for their products. It would be difficult to find products in other sectors of the economy of which this could be said. I do not know how many motor vehicle manufacturers there are in South Africa at present, but there are definitely fewer of them. If I am not mistaken, there are approximately seven or eight of them.

It is true that the economic law of the elasticity of demand and supply—I do not want to say a great deal about that this afternoon—imposes certain limitations on agriculture which cannot be escaped. It is also true, as was illustrated very dramatically this year, that agriculture is subject to climatological factors that make agriculture a high-risk undertaking. There are geographical factors in South Africa that make it simply impossible for anyone to grow maize in the Kalahari, whatever one does. It is also true that over the past year or so, due to sky-high interest rates, a very considerable degree of financial risk has been brought into agriculture and in my opinion this is one of the factors that has given rise to the dilemma which has begun to face agriculture in recent times. One can look at the instruments whereby to implement the Marketing Act. We are acquainted with the quota system, the floor price system, the utilization of food subsidies, the method of a fixed price one-channel marketing system and the method of input subsidies. Every industry in agriculture has its own method of marketing and makes use of a combination of these different systems to suit the specific agricultural product. We must consider whether it is possible to improve the marketing methods for certain of our products. There is certainly room for improvement, but generally speaking we must, for the sake of agriculture, stand by the Marketing Act as we know it.

I want to associate myself with, and enter into debate with, the hon. member for Barberton concerning certain matters he raised this afternoon, particularly the issue of the so-called repopulation of the platteland. This is an aspect which has been very widely debated this afternoon and it was he who used the specific expression “repopulation”. Unfortunately he did not tell us how, in his opinion, this was to be done. I myself have certain views as to how it can be done and I should like to refer to them.

I hope that by the term the “dynamic repopulation” of the platteland the hon. member for Barberton does not mean that one would stipulate in respect of a specific area, for example Barberton, that farmers who have more than 1 000 ha of land there—they are the so-called land barons—should only be permitted 1 000 ha and that the rest of their land should be expropriated so that it may be given to other farmers. I hope he does not mean that if a farmer has more land than is necessary for an economic unit he will have to give up the rest of his land for use by other farmers, because that is not a method that we in South Africa can adopt.

Nor am I sure whether the hon. member is in favour of farmers who own properties being obliged throughout South Africa to live on their farms. He did not express himself in this regard, but I really hope that he is not in favour of that. That would cause a tremendous dilemma in South Africa, and if he is in favour of that we shall be able to debate the matter with him fruitfully.

The important point to which we shall have to give specific attention—this is also due in particular to the dilemma faced by agriculture at the moment—is agricultural financing. This is something that we shall have to give special attention to, because in my opinion this is the key to the solution of the dilemma. It is being said nowadays, and rightly so, that we are too inclined to subsidize the farmer’s products and not the farmer himself. If one subsidizes the farmer’s product—for example, one pegs the maize price at R300 per ton—that simply means that one enables those farmers who are already large-scale farmers to buy out the smaller farmers so much more easily and to expand still further. That is not where the solution lies. I think that Agricultural Credit—I have great respect for what they are doing at the moment—will have to take cognizance of this so that they are able to provide agricultural financing more effectively. The same goes for the Land Bank. These two instruments we have for agricultural financing will, in my opinion, have to play a still greater role in our whole agricultural set-up in the future. I say that we must subsidize the farmer and not his products. I truly think that we shall have to consider all the methods at our disposal in an effort to reduce the interest rate still further than at present because at the moment there is still too great a difference between the interest rates of these two bodies and market-related interest rates. In that way we shall be able to place the farmers in a more competitive position. It is important that he be placed in a more competitive position with regard to the rest of our economy.

I wish to conclude. I am very grateful that the Agricultural Credit Division is alrady making loans available on a test basis to certain part-time farmers to enable them to start farming; I have asked for this in the past. This affects the beginner farmers. We must give this man the opportunity to establish his farm and buy his wife a decent refrigerator, television set and house. He intends farming on a full-time basis one day. He is moving into agriculture. I want to ask this afternoon that the Land Bank, too, should give more attention to that specific situation.

Mr. Chairman, I have no quarrel with what was said by the previous speaker. In fact, I should like to associate myself with what he said with reference to the aspects raised by the hon. members of the CP, viz. that we are experiencing problems in this country in the rural areas as far as depopulation, and particularly White depopulation, are concerned. I think if we really went into the matter we on this side could advance as many arguments as were advanced by the hon. members on that side of this House. Therefore, in this regard we have no quarrel with them whatsoever.

One should not, however, generalize entirely and say that the rural areas are becoming impoverished. With regard to my own area along the Orange River it cannot be said that the farmers are becoming impoverished. In fact, the sultana farmers, the lucerne farmers, the cotton farmers and others are becoming prosperous. On the other hand there are farmers in the rural areas who find themselves in the grip of the drought, as a result of which they are in a difficult position due to circumstances beyond their control. In their case one does find some degree of impoverishment. However, I do not believe that there need be any argument about this. The important point is that when circumstances of this nature occur, steps have to be taken. In the sphere of the population or the repopulation of the rural areas, surely there have been striking examples in recent times proving the contrary, viz. that the Government takes a real interest in the matter.

We can look at the events in the North West. It is as clear as daylight that a disaster is slowly but surely building up. Hon. members will recall the flooding of Laingsburg some time ago. This gripped the imagination of the people. The extent of the damage being done to parts of the Cape Province, the Transvaal and the Free State is ten times greater than the damage suffered by Laingsburg, and it is going to take many more years to effect a recovery. The grazing reserves are absolutely exhausted. The capital reserves of farmers have been exhausted systematically to such an extent that older farmers today no longer even have money for their retirement. Everything was spent to supply fodder to the animals. The human reserves are leaving the rural areas. What has happened? The Government has been rendering unparallelled aid. Aid has been given on a scale never before experienced in times of disaster in this country. Millions of rand have been spent, so much so that the debt per sheep in those areas has assumed proportions which are no longer economically justifiable. The object of this investment was not merely the survival of the sheep. Because the sheep survived, the farmers have been able to survive, and because the farmers have been able to survive, the rural areas have survived. Consequently this was a community subsidy which ensured the survival of the rural areas as a whole. Had this aid not been given, conditions would gradually have developed in towns such as Kenhardt, Van Wyksvlei, Prieska, Carnarvon and other villages in the rural areas, which would have made it impossible for people to make a living. As happened in 1933, there would have been an exodus to the cities. Whites and non-Whites would have moved to the cities. One need only think of the social and socioeconomic problems which that would have created in our cities and of the capital that would have been required for resolving that problem. Therefore one realizes that the tremendous investment which has been made in rural areas is justifiable. The rural areas as a whole have survived. In fact, there are farmers who are in the rural areas today purely because the State has made it possible for them to remain there.

The state has made a tremendous investment in the human material of the rural areas. I am grateful to the Government for that. This is a striking example of the way in which we are keeping people in the rural areas, and even populating the rural areas to some extent, with the assistance of the Government. The Zulu people have a word which they use when saying thank you for a gift. That word is Ngijabongela. Not all the people in the interior are my voters, but they remain my people and on behalf of those people I should like to say Ngijabongela to the Government today. I want to thank the Government for what it has done so as to enable us to survive. I also want to thank all the Ministers who have made contributions over the years to enable us to deal with difficult problems. I should also like to thank the hon. the Prime Minister for his interest and sympathy and for the support he has given to these relief measures. Our Minister and Deputy Minister of Agriculture know the agricultural industry; they know the farmer and they know the psychology of the farmer. With the two of them at the helm I think we shall make a great deal of progress. I want to thank them for the efficient way in which they have been handling this difficult portfolio in these times. We are really impressed by the way they have been doing so.

This entire system of drought aid for the rural areas is being administered by officials. There were a certain number of these officials in 1976 and today that number is still the same. They are men who, with the same establishment, are handling six different aid schemes today. I refer, for example, to the long-term drought aid plan in Transvaal, the phased aid plan in the central part of the country, the carry-over debt scheme for field-crop farmers, the debt consolidation scheme, the Riet River irrigation scheme where assistance is being rendered to farmers, the water conveyance scheme and the Kalahari pipeline. These schemes are being handled by the same number of officials as there were before. Patriotism is being evinced not only on the border but also in small offices in Public Service buildings in which officials are working diligently. I should like to pay tribute to the dedicated and selfless work being done by these officials. In this regard I want to thank Mr. Harry Hattingh and his officials, especially Mr. Breytenbach, most sincerely. Their work is appreciated.

The history of drought aid is a long one. In 1933 sympathy was our means of surviving the drought. In 1940 and in 1950 farmers utilized their own resources to survive the droughts. The first real relief was granted in 1960 in the form of transport rebates. In the late ’sixties, under the then Minister of Agriculture, Mr. Uys, subsidies were introduced. Because the subsidies were abused by farmers, they were withdrawn. Subsidies were subsequently replaced by the stock withdrawal scheme. This scheme was abolished in 1975 after good rains had fallen. However, no rain fell in Namaqualand. A problem arose in that farmers’ reserves eventually became exhausted. A durable partnership then came into existence between organized agriculture and the department in that they have been co-operating in identifying and solving difficult problems. In this way the rebate on the transport of fodder has been reintroduced systematically. When farmers ran out of money, loans were made available to them. When their burden of debt became heavier, these loans were subsidized by 50%. When the burden of debt became even heavier, it was subsidized by 60% and, in the fifth phase, by 70%. That was for the purchase of fodder. This imposed an astronomical burden on the farmer, because he will have to repay this money at some stage.

Plans for rendering such aid have always been based on ad hoc decisions. A problem arose and plans were devised in consequence thereof. The need for a long-term drought aid plan emerged more strongly. Once again, in conjunction with organized agriculture, particularly through the agency of Mr. Jooste, and particularly through the agency of Dr. Agenbach and Dr. Baard of the department, a strategy was developed in terms of which the long-term problems relating to drought could be dealt with. The first region in which this plan has already been introduced is in the northern Transvaal, and it seems to be a great success. Now, for the first time, we do not view a drought in terms of sheep and people, but in terms of the soil and the conservation of our major resources, viz. our bushes, grass and trees. The strategy devised for the future in this regard is a fine strategy, and embodies the wishes of the farmers, and meets the requirements of the officials of the department and of organized agriculture. I am grateful for the opportunity to pay tribute to these people in this way. [Time expired.]

Mr. Chairman, it was so pleasant to listen to the hon. member for Prieska that I was hoping that you might ignore the clock and give him the final three minutes as well. It is very pleasant to listen to a man who knows what he is talking about.

In the few remaining moments I do not want to reply to the debate up to this stage, but want to avail myself of the opportunity to say thank you for the good wishes expressed by the different sides of this House for the difficult task with which the hon. the Minister and I have to contend. The drought, a subject with which the hon. the Minister kicked off this afternoon, is the cause of tremendous pressure being exerted on the department. This afternoon the hon. the Minister referred to the number of districts appearing on the list of drought-stricken areas but I may just mention that the latest information is that the number has already increased by a few more. At the moment we have as many as 139 drought listings. During the past 14 days there has been an average of one listing per day.

A department is geared for normal administration. Whenever an extra workload is placed on a department, its officials, who have to carry the workload and who have to cope with it, as the hon. member for Prieska said, in small offices, evincing their patriotism in that way, are indeed deserving of our gratitude. The officials cannot get up here today to thank the hon. member for Prieska for his appreciation; consequently I shall do so on their behalf. I gladly associate myself with the appreciation he conveyed to the officials.

Business interrupted in accordance with Standing Order No. 22.

House Resumed:

Progress reported and leave granted to sit again.