Mr Chairman, since this is the first time since 1946 that the Government has decided to table a White Paper on agricultural policy, permit me to say a few words at the outset about the White Paper on agricultural policy that was tabled in the Other Place.

It is necessary to review any policy from time to time with a view to adjustments in order to meet the demands of the times, and in the case of agriculture, too, a need has arisen for the reformulation of agricultural policy. Since my announcement last year, various opinions and views have been aired in the Press and elsewhere as to what this White Paper should and should not contain. Allow me to state clearly, here and now, that the White Paper is not a document containing a magical formula as to how, where, how much and at what price each of the fifty or more agricultural products should be produced. Similarly, one cannot stipulate in a policy document precisely how agriculture will be financed, in good times or bad, or precisely what laws and structures will be introduced or abolished in the future. Like all other industries, agriculture is a dynamic industry.

What the White Paper is in fact meant to contain are pointers or beacons that indicate the road ahead and that will still require to be worked on and considered a great deal. This means that decisions taken in future about production, marketing, financing and so on will each have to be assessed in terms of the guidelines laid down. In addition, it is a consolidating document embodying policies as they have developed over the years, policies stated by my predecessors, policies expressed at agricultural congresses that have taken place from time to time.

The point of departure adopted in drawing up the White Paper was to place in perspective the distinctive character of agriculture and its contribution and role within the framework of the national economy.

On the supply side, agriculture has to contend with the vagaries of nature, cattle diseases, pests, plagues, animal mortality and other biological factors over which we cannot exercise full control. On the demand side we find that the price elasticity of the demand for the majority of agricultural products is slight.

Other distinguishing characteristics of agriculture are the fact that agricultural production cannot easily be adapted to the demand; structural changes in agriculture take a great deal of time; and with a few exceptions, agricultural production cannot be carried on a continuous basis as in the secondary industries and mining, for example. Finally, there are in addition a large number of relatively small production units distributed across a very wide area. This makes it extremely difficult for these units to compete in the market.

All these factors combined mean that agriculture is a very risky industry and, in the absence of stabilizing Government programmes, agriculture has to be regarded as an extremely speculative field of investment.

To ensure that this industry, in the midst of all the uncertainties and variable factors surrounding agriculture, remains vigorous and, to an adequate extent, provides the food and fibre requirements of the country and maintains its place in international trade, it has been necessary to state the objectives of agricultural policy, and measures to achieve these objectives, very clearly in the White Paper. On that basis a programme of action can be established which can give the necessary attention to the problems of agriculture in order or priority.

In my opinion the value of this White Paper will depend to a very large extent on the effective programmes of action that it will have to give rise to.

It has been decided to present the objectives in the White Paper under three heads, viz production goals, marketing goals and general aims.

In the formulation of production goals it has been taken into account that all our food, fibre and beverages derive from the natural agricultural resources that are exploited by the farmer in a system of private land ownership and free enterprise with the best available technical knowledge. The goals set in respect of the production process had, therefore, to contain a pronouncement on the resources, the technical inputs and the farmers as entrepreneurs or producers. As far as the resources are concerned, the Ministry has for some time been advocating the optimum utilization of our natural resources, and has accepted this as policy. The practical steps to be taken in order to achieve this aim are set out in the White Paper, and the responsibility of the State in regard to surveys, classification of resources, research, specification of production techniques and norms, extension and advice, is emphasized.

Goal number one is the most important because it is the most comprehensive goal in developing the basic agricultural industry in South Africa. It is a matter of the management and development of our resources. In addition to this goal, however, other goals began to develop, goals which also grew in importance as agriculture developed. Accordingly the policy document specified a second very important goal in respect of the resources, viz the preservation of agricultural land. This is a problem which is coming very much to the fore nowadays.

As the population grows, agricultural land passes through three phases. Initially agricultural land is in plentiful supply and new land is developed by the entrepreneurial spirit of individual farmers. In the next phase additional land, particularly irrigation land, is made available for production by way of State contributions.

At present South Africa is largely in the third phase, although there are still projects in the second phase, for example the Orange River Project in which 200 000 to 300 000 ha are being put under irrigation in a region with a rainfall that is too meagre even for dry-land crops.

Because South Africa is widely regarded as a large country of wide open spaces, the demands made on agricultural land by other sectors in this third phase of development are often totally underestimated. For example, since 1971 permission has been granted to withdraw from production 200 390 ha of agricultural land with a view to township development. Unfortunately it is often high potential land that is lost in this way. How can township development or road construction take place in Constantia, Tygerberg or the Highveld, for example, without our sacrificing the cream of our agricultural land? The development of roads does not only absorb agricultural land; it also entails the fragmentation of farming units. We shall have to take a serious look at this. As a developing agricultural country South Africa is in the third phase of land usage and applications for alteration in land usage will have to be dealt with great circumspection, taking due account of the agricultural potential of the land in question.

It is also unequivocally stated in the policy document that it is the endeavour of the State to keep the maximum number of well-trained and financially-sound farmers on the farms. We strive to promote the family farm system. The success of the agricultural production process is, in the final instance, in the hands of the farmer. What becomes of our agricultural resources, and how the technical know-how is applied at farm level, depends on the farmers’ decisions. By setting this goal the State is therefore committing itself to ensure, as far as it is able to do so, that the farmers should, firstly, be well-trained for their tasks; secondly, that they should be well-served in the technical sphere and, thirdly, that they should be able to obtain the necessary financing, adapted to their special circumstances. Apart from this, an effort is being made to keep the maximum number of farmers, as determined by the agricultural potential, on the land.

Therefore the State will in future have to evaluate the measures and instruments at its disposal whereby to achieve these goals, and will probably have to adapt them drastically. Quite apart from the matter of economic stability, land ownership and occupation of the platteland has always instilled spiritual stability and a conservative character.

Farm labour is still an integral part of the production process in agriculture. New labour legislation and the socio-economic development of farm workers has, however, meant that totally new employer/employee relations have become established in agriculture, and the agricultural sector will have to prepare itself for this by taking cognisance of all the modern personnel management techniques. Success in farming will increasingly depend on the extent to which the farmer, as manager of his enterprise, can succeed in achieving the optimum combination of his available production factors, namely his land, capital, technology and labour. Labour management is now regarded as being equally important in agriculture as in any other labour-intensive industry. Nevertheless it seems as if labour, generally speaking, is still the Cinderella in comparison with the other production factors.

The substantial increase in labour productivity in South Africa agriculture as measured in terms of the increase in volume of agricultural production per labourer can for the most part be ascribed to the introduction of mechanical and biological innovations rather than to the implementation of better labour management techniques.

The further replacement of labour by mechanical equipment will, however, have to be carried out with the utmost circumspection. We must bear in mind that in comparison with the situation in the majority of other countries that we have to compete with, in South Africa mechanization, as against labour, is relatively expensive. South Africa cannot afford to mechanize to an excessive degree in the face of large-scale unemployment and with poorly skilled labourers. Mechanization is only justified if it is defensible on economic grounds. However, such an evaluation is only meaningful if mechanical equipment and labour are equally well managed and utilized. I think that our problem in agriculture at this stage is in many respects that we are in fact over-mechanized in many farming units.

The large-scale unemployment among unskilled workers in South Africa, and the fact that it is expected to increase, is cause for concern. In spite of this, however, farmers often find it difficult to obtain labourers, and the number of Black people and Coloureds desirous of working on the farms is dwindling. Farmers will, in their own interests, seriously have to ask themselves whether they themselves are not also partly to blame for the fact that farming work is becoming increasingly unpopular among Black and Coloureds. In-depth consideration will have to be given to ways of making farmwork more attractive, where exactly the problems with regard to the provision of employment in agriculture lie, and ways of rectifying them. At present the image of farm labour is not good. We know that there are very fine examples of efforts made by farmers to rectify this image on their own farms. There is a very fine example in this regard in the Boland.

Many people oversimplify an extremely difficult and delicate matter by suggesting that the problem of recruitment and better utilization of farm labourers should be sought in higher wages alone, and farmers are sometimes accused of large-scale exploitation. However, those are not the facts of the matter. Of course there are exceptions, but generally speaking, farmers have nothing to be ashamed of and the wage increases of farm labourers have kept pace well the increases in the prices of other farming inputs and with the increases in the prices received for their products by farmers. Higher wages as such, however, do not lead to higher productivity. What we need is training, in conjunction with better utilization and motivation, which in turn justifies higher wages. The basic challenge we are faced with is to increase the productivity of farm workers as such by way of training and motivation, rather than by further mechanization. A prerequisite for this is expertise with regard to the implementation of tried-and-tested managerial techniques. We shall have to move more rapidly towards, and give serious consideration to, the establishment of more training centres for farm labourers. We already have Boskop and Kromme Rhee in the Cape.

I come to question of marketing goals. In line with the Government’s declared policy of free competition, agriculture is in favour of minimum Government interference in the free-market system. Due to the distinctive characteristics of agriculture, particularly the risk involved in the industry due to fluctuating climatic conditions and the associated fluctuations in production, prices and income of the farmer, a degree of State or semi-State involvement in the marketing of agricultural products is in the interests of the community and is therefore inevitable. As far as I am concerned, this standpoint is not in dispute, and it has been reconfirmed in policy speeches by my predecessors. The Marketing Act, and the regulating schemes establisHed in terms of it, supported by the co-operatives, have over the years shown that they are suitable instruments whereby to implement the marketing policy in the most effective way in the interests of both producer and consumer. In this regard the department’s Agricultural Product Standards division plays an indispensable role in the establishment of production standards and the drawing up and implementation of regulations to ensure that our agricultural products can be sold on the local market on a quality basis and can compete effectively in the foreign market. But we live in a changing world, and we are compelled to evaluate the regulatory measures and marketing arrangements on an on-going basis in accordance with the demands of the times, and to effect adjustments where necessary. Accordingly I have directed the National Marketing Council to investigate all the schemes established in terms of the Marketing Act with a view to making adjustments so as to bring the schemes into line with the principles of a free-market system as far as is practicable. As I pointed out last night, if the task becomes too great for the National Marketing Council we shall have to find ways and means of strengthening their ranks to enable them to perform this investigation effectively. You will recall that during the last sitting of Parliament the Co-operations Act was amended and consolidated to enable the Co-operative movement to perform its task as a supplementary instrument effectively.

Self-sufficiency is another very important aim, and in the majority of countries it is a matter of priority. It is particularly important in South Africa due to the threats against the country, inter alia in the field of international trade. Self-sufficiency must be reconcilable with the principles of a free-market system. But although the free operation of demand and supply will ensure self-sufficiency to an important extent, cases may occur where the free-market system cannot be implemented without qualification. As far as agriculture is concerned, on-going consideration will have to be given to the nature and extent of interference in the free-market system in order to restrict to a minimum the Republic’s vulnerability with regard to the regular supply of fibre and food products. South Africa has an export potential with regard to certain important agricultural products and it is logical that the further one takes self-sufficiency with regard to branches of production in which the RSA does not enjoy such obvious comparative benefits, the more it forfeits the benefits that that export potential entails for it. Therefore the question will regularly have to be asked with regard to each specific agricultural product whether self-sufficiency is essential for strategic or other reasons; what degree of self-sufficiency is regarded as the minimum; what measures will be most appropriate to achieve the said goal and how the measures are to be implemented. To set as a goal a specific degree of self-sufficiency in regard to certain agricultural products will necessarily entail that a degree of self-sufficiency in regard to essential inputs of agriculture will also have to apply. Self-sufficiency in respect of specific agricultural products will therefore have to be synchronized with self-sufficiency with regard to specific capital and operating inputs. It would make no sense for us to be dependent, in respect of the inputs into an industry crucial to South Africa such as wheat, on the importation of fertilizers, oil, weed-killers, etc. One could not then say that one was self-sufficient, because one would be unable to produce the product, being dependent on inputs obtained from elsewhere.

South Africa is traditionally a participant in international trade in agricultural products, with regard to both imports and exports. Products such as coffee, tea, rice and rubber in respect of which the country has shortages or which it does not produce at all, are regularly imported, while on the other hand various industries are to an important extent reliant on the export market for the marketing of their products, eg in the case of deciduous fruits, citrus fruit, maize, sugar, wool and mohair. The exportation of these agricultural products has developed into an industry in its own right. I should like to break a lance for these export industries. Over the years the agricultural export industries concerned have built up strong marketing organizations and trade links in various foreign markets. This, together with the outstanding quality of our products and the know-how of our marketers, has contributed to bring about the situation that favourable marketing opportunities have become widely available abroad, to the benefit of the South African farmer and the country’s economy in general.

But in spite of the benefits of export marketing, it must be fully realized that it is far more difficult to achieve success in marketing on the world market than on the local market. The world market is not only more changeable and competitive but is also subject to all kinds of measures restricting trade such as import limits, minimum import prices, subsidized exports and often, in addition, unfair sanitary and phyto-sanitary requirements. Therefore the continued success of the export marketing of our agricultural products will demand increased efficiency and greater ingenuity in penetrating the world market. Therefore this sets tremendously high demands on the marketing skills of each of these control boards.

Regional development has taken shape in the form of the National Physical Development Plan. During the Good Hope Conference the hon the Prime Minister made the following statement: “In die eerste plek het die voorstelle uitsluitlik betrekking op ny-werheidsontwikkeling. Die ontwikkelings-moontlikhede van baie van die onderontwik-kelde gebiede lê egter in ander vertakkinge van die ekonomie opgesluit, veral in die landbou.” Therefore it has been clearly spelt out that the role of agriculture is important, since the development and maintenance of many of the rural economies is totally dependent on the agricultural sector. The degree to which secondary development in the rural areas comes into its own and plays a greater role in the future will depend largely on a stable and financially sound agricultural sector which will provide the necessary input for such development and, on the other hand, will serve as the market for the secondary and tertiary sectors. In this regard agriculture has already played an important role, in that the infrastructure required for further development has already been established due to the agricultural sector. Nor can it be denied that the basis of retail and wholesale development in rural areas originated largely as a result of agriculture.

In this regard the agricultural co-operative movement, which is rurally oriented, can rightly be termed the driving force behind the development effort in rural South Africa. Due to the growth of co-operatives an increasing number of people are being attracted to the rural areas. Employment opportunities are increasing. It is estimated that co-operatives are already providing approximately 79 000 people with employment in the rural areas. Due to increased employment and the resultant larger amount of money in circulation, this stimulates local commerce and the availability of more luxury services. The expansion of co-operatives has also resulted in strengthening of the social infrastructure in the rural areas. Among other things, this stimulates the number of pupils in the schools and this in turn results in a wider and better choice of subjects, and therefore a greater number of teachers and pupils are established in the rural areas. This shows how a healthy agricultural industry benefits other sectors of the community. Nowadays we are attracting well-qualified people, people with degrees, to co-operatives, and these people play a leading role in the local rural communities. They serve on the town councils and take part in community programmes.

Moreover, the role of agriculture in regional development was reconfirmed when a development strategy for the Northern and North-Western Transvaal border areas was formulated in terms of the Promotion of the Density of Population in Designated Areas Act. This strategy involves the following elements: The stabilization of the agricultural sector; the stabilization of supporting service towns; and the creation or improvement of a physical and social infrastructure. In this regard the agricultural sector comes very clearly to the fore as a basis of development.

As far as the role of the South African agriculture in the Southern African context is concerned, Southern Africa is generally recognized as including, in addition to South Africa and the national Black states Transkei, Bophuthatswana, Venda and Ciskei, the states of Angola, Botswana. Lesotho, Malawi, Mozambique, Swaziland, Zaire, Zambia, and Zimbabwe, and the South West African territory as well. The growing need is developing to liaise with South Africa on agricultural matters. In the context of agriculture the situation in these countries varies from, for example, the highly commercialized White agriculture of South Africa, to subsistence production systems in the majority of these countries. The tragedy of the situation is that many countries in Southern Africa have adequate agricultural potential but are not capable of meeting their own food requirements. The steadily growing population of these countries, together with dwinddling food production, has already given rise to a severe shortage of food in some of these countries. In spite of efforts made by Black states in Southern Africa in recent years to become less dependent on the Republic, and mindful of estimates by the World Bank to the effect that the demand for food in Africa will increase by one third during this decade, it is foreseen that the majority of countries in this subcontinent will continue for many years to be reliant on the Republic as one of their major suppliers of food. In this context South Africa continues to offer them the hand of close co-operation; co-operation for which the basis already exists and which is already being put into effect in practice, to mutual benefit, in trade agreements with Zimbabwe and Malawi; the customs union agreement with Botswana, Lesotho, Swaziland, Transkei, Bophuthatswana, Venda and the Ciskei; the agreement with Mozambique with regard to the utilization of water resources and, for the rest, co-operation in the agricultural technical sphere, particularly with a view to the utilization and conservation of land as a natural resource. South Africa has repeatedly placed its skills at the disposal of those who wish to help themselves to create prosperity. We stand by that in the knowledge that we have the task to act as catalyst on this continent in order to support those who champion orderly reform. Moreover, it is becoming increasingly vital that the agricultural policy formulated for South Africa should be sufficiently dynamic to have relevance across the borders of the RSA. This is essential because adjoining under-developed agricultural areas can have a restrictive effect on the implementation of South Africa’s agricultural policy. Therefore it must be possible for South Africa’s influence to extend across its borders, and this means that the scope of agricultural policy will have to be enlarged, particularly in present times.

As far as agriculture is concerned, therefore, South Africa ought not to be isolated from other countries in Southern Africa. Irrespective of whether these states are still self-governing states within the RSA, independent states which used to form part of our country, or other independent states, these countries will, on the one hand, necessarily have to buy South African agricultural products to meet their needs, whereas on the other hand, South Africa has a human duty to perform as regards the countries that are prepared to co-operate with us, to assist them in their striving and in their efforts to develop their own agricultural industries.

Already there are success stories. Countries like Malawi and Bophuthatswana have achieved incredible success since their independence as far as their agriculture is concerned. Progress in the field of agriculture must be regarded as a very important factor contributing to stability on this subcontinent, and the challenge we are faced with is to develop these exceptional success stories so as to involve other countries in Southern Africa. We cannot sleep in peace in this country if our neighbours are starving.

The approximately 70 000 farming enterprises in our country are individual business enterprises, and they form part of the private sector. In this capacity, agriculture must be geared to making a profit. It is important that the farmer should conduct his enterprise in such a way that sound business principles, stringent financial discipline and effective cost saving practices be consistently applied. It is also evident from this policy document that it is the aim to have a self-sufficient and enterprising corps of farmers in South Africa, capable of overcoming the challenges of our times.

Having identified the goals of agricultural policy, it is necessary to consider the measures whereby to achieve these goals. If this White Paper is to have practical value it will constantly be necessary to develop programmes of action arising out of this document. Priorities will have to be identified. It goes without saying that all the goals of an agricultural policy cannot be achieved within a few years. We fully realize that. The instruments necessary to achieve these goals—that is to say, laws on agriculture, as well as laws administered by other Government departments—will have to be subjected to constant examination. Even the annual agricultural budget will have to assume a form that takes account of the policy goals as embodied in this White Paper. Apart from the departmental structure, there is the total agricultural community, with the South African Agricultural Union at its head, which ought to make constant inputs with regard to the evaluation and development of the various programmes of action.

This Ministry, together with the department, plans to report on an annual basis on the progress made towards achieving these goals. We do not intend allowing this document to collect dust.

I wish to conclude with one final thought. I want to take the opportunity to convey to the persons in my department who formed a committee to draw up this policy document, my sincere thanks for a document which is not very bulky but which represents a tremendous amount of work. Various inputs have been made by various organizations in agriculture as well as by universities, various Government departments and the Prime Minister’s Economic Advisory Committee. This White Paper is the form in which the agricultural policy must be cast. It is an honour to table this White Paper and to have been able to express a few ideas while doing so. I hope that we shall be able to conduct a meaningful and pleasant debate about this.

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

The past year has without doubt been the most trying period in this country’s agricultural history. A combination of adverse circumstances, climatic as well as financial, has served to reduce the economic viability of the industry to dangerous levels. Fortunately, there is good reason to believe that the bottom of the trough has now been reached, and indications are that the long, slow task of rehabilitation can now begin. Farmers are not only survivors, they are also optimists, and those who have survived the difficulties of the past year are looking forward to a better future.

It would not be amiss, at this stage, to mention that although the farming sector has suffered casualties, and will no doubt continue to do so for some time, the number of casualties would have been far higher had it not been for timeous and generous Government aid. On behalf of this side of the House, I would like to thank the hon the Minister for the manner in which he handled the drought crisis, and for having succeeded in controlling what could have been a disaster of major proportions. I also want to express a word of thanks to those hard-pressed officials of his department who were called upon to put in an effort beyond the call of duty.

It was at this time last year, when the drought was at its worst, that we all unanimously agreed that the time was ripe for a review of agricultural policy. We accepted that the drought has served to expose and to aggravate underlying weaknesses in our industry, and that we would have to take a long hard look at where we were going. The hon the Minister responded by announcing that he had called for a White Paper on agricultural policy, and this move was generally welcomed and acclaimed. The long awaited White Paper has now been tabled, and I shall devote the rest of my speech to it.

At the outset, I must say that the White Paper is a disappointment. We in these benches have never been slow to give credit where credit is due, but in all good faith, we cannot be too enthusiastic about what the hon the Minister has tabled. However, let me begin on a positive note. What is good about the White Paper? Firstly, the hon the Minister is to be congratulated on his initiative. Calling for the White Paper was a positive and constructive step. This can now at least serve as a basis for what I hope will be a constructive debate. Secondly, there is much in the White Paper that we can support. For example, there is a commitment to a free-market system, which we support. There are hints that import control measures could be modified, if not abolished, and this we welcome. There is an acceptance that the loss of a certain number of unviable farming units is inevitable, and with this we agree. Concern is expressed over the loss of land for purposes other than farming, and we share this concern. It also highlights the question of the welfare of farm labour and suggests that this is a field which might bear investigation. There is, therefore, much that is good and positive in the White Paper, but what is important to us is not so much what it does say, but what it does not say. Little of what is stated in the White Paper, is in fact new. We knew before it was tabled that the Government had committed itself to private enterprise and a free market, to a viable agricultural industry and to the welfare of all concerned with agriculture. It has all been said before, many times, and by the hon the Minister himself. We all support these sentiments, but this gets us no closer to solving those contradictions in agricultural policy which work against these admirable ideals. Some of the worst of these contradictions appear in the White Paper itself. Let me illustrate my point by way of an example. On page 8, under the heading “Marketing Goals”, the Paper has this to say:

This is a contradictory statement. State involvement will inevitably mean distortion of marketing and price structures. During this very session of Parliament there have, for example, been reports of the Potato Board prohibiting farmers from selling second grade potatoes for fear of disturbing the price structure, and the Citrus Board has been dumping citrus for the same reason. The Meat Board has expressed its intention of expanding the area of controlled marketing in the Western Cape, and the hon the Minister himself has announced a new increased maize price in terms of a fixed-price single-channel marketing system, which not only disallows any free-market forces to come into play, but which also grossly distorts production incentive.

These are all examples of Government intervention, which takes place in respect of the marketing of our agricultural products. Is it surprising, therefore, that an American economist, Ross Korves, wrote recently in Maize Magazine: “The average politician will listen politely about the evils of government intervention in markets and then go on his merry interventionist way.” Is the hon the Minister not laying himself open to accusations of this kind? In all fairness I must say that the hon the Minister has called for the National Marketing Council to evaluate the control schemes, while taking into account the advantages of moving towards a freer market.

We in these benches would have preferred a far more definite commitment to moving away from controls, particularly those controls embodied in single-channel fixed-price systems. We feel strongly that the matter is important enough to warrant investigation by a full-scale commission of inquiry. The hon the Minister has mentioned today that if necessary the powers of the Marketing Commission will be increased and enlarged in order to cope with the need should it arise. I hope we are moving, perhaps, in the direction of a full-scale commission. The hon member for Pietermaritzburg South, however, will deal with this matter in depth later during the debate and will be suggesting alternatives. I will leave it there.

The second contradiction concerns the commitment to self-sufficiency. The hon the Minister has spent some time this afternoon spelling out his attitude and standpoint in this regard but it does not make sense to say on the one hand that one does not want to interfere with the free market mechanism in order to achieve an economic goal while on the other hand, one prohibits or precludes free trading on that market in order to pursue non-economic goals. There is a very basic contradiction here. Government intervention for the purpose of pursuing self-sufficiency in related areas has tended to distort the price of agricultural inputs. South African agricultural products have become to a large extent non-competetive on world markets as a consequence. The result is that we cannot compete effectively against imported agricultural products and so we create the need for protectionist policies. We are in fact getting the worst of both worlds by producing expensive food and making ourselves vulnerable to pressure against cheap imports. The ideal of self-sufficiency is, quite simply, a political commitment—and I do not mean a party political commitment—which is in direct contradiction to the free market ideal. Until this contradiction has been addressed farmers in this country appear destined to have to continue being forced to use domestically-made tractors that cost 50% to 70% than the same tractor imported from Europe and domestically-produced urea that costs R280 per ton whereas imported urea costs R160 per ton. What I am trying to say is that it is very easy to claim that one supports the ideal of a free market system but as long as one allows noneconomic commitments such as self-sufficiency to interfere, one’s ideals will be frustrated. I do not believe that the White Paper has addressed itself adequately to this problem. The hon the Minister has this afternoon addressed himself to it in some detail as well, and I believe we are now at least in the debate and that a lot of constructive thought will come out of it as a consequence. What we have here is a situation where agriculture is in favour of two contradictory policies which appear to seek to achieve mutually incompatible ends.

I would like to deal briefly here with the consequences of another area of Government intervention in the market and I refer here to the fixed price single channel system. What this system does is that it encourages the farmer to go for production come hell or high water. He knows that if he can get a crop he will hit the jackpot. As a consequence, many farmers have been tempted into ploughing up land, which would be best left unploughed, in order to get in on the action. They are prepared to take severe risks in an already risky business even when the odds are stacked against them and the question is why should this be the case? They do this because under various hon Ministers the Marketing Act has been so manipulated that risk has to a significant extent, been transferred from agriculture to the Government. The Marketing Act, as it is being currently administered allows farmers to retain all chance for profit while transferring all risk of loss to Government. The hon the Minister knows that I am right. He is the one to whom the control boards turn when the farmers hit the jackpot and the boards are swamped with surplusses, and he is the one to whom the farmers turn when they miss the jackpot and find themselves with empty pockets. The hon the Minister knows that even given the circumstances of the drought that there are many farmers who have no one but themselves to blame for the trouble they find themselves in. I am not knocking the farmers, Mr Chairman, but I believe that we should have the courage to look at ourselves and to see for ourselves where we are going wrong. That is the way we are going to put things right in our industry. Farmers allowed themselves to be tempted into crop-farming on marginal land which should never have seen the plough. Let me put a question to the hon the Minister to illustrate my point. If reports are correct, thousands of hectares of maize lands are being ploughed at the moment in the Free State and elsewhere to plant winter wheat. If the gamble comes off and a record crop is reaped, what is going to be done with the high-priced surplus? If it does not come off, and the crop is not reaped, where is the hon the Minister going to find the money to bail those farmers out so that they can try for a maize crop in the summer? Let me put a second question to the hon the Minister. How many of those farmers does he think would be taking the gamble on planting wheat if they did not have the jackpot of high fixed price to go for and, secondly, did not have the security of low cost loans, subsidies and all the other forms of Government aid to fall back on? The fault does not lie so much with the fanners who go for this gamble, as we all try to improve our own position, but rather it lies with the system which encourages it. The hon the Minister would have noted that I have dealt sympathetically with his position. I see his problem. He is the man in the middle but until the contradictions in the policy can be ironed out he will remain a target for cross-fire. The hon Minister might ask me as a farmer if I am not pleased and satisfied that I as a producer find myself in a kind of “heads I win, tails you lose”, situation, vis-à-vis the consumer. My reply is: No, I am not. I believe that the present system encourages inefficiency, and an inefficient agricultural system leads to high-priced food which leads to consumer resistance and reduced consumption. What is good for the consumer, is good for the producer. For example, as a producer of red meat, I would like to see every person in South Africa being able to eat red meat every day. I would also like to see every child drink a glassful of milk with every meal. I would know then that the future of every stock farmer and every dairy farmer was assured. Inefficiency will serve to price us right out of the market. I want to see a strong and viable agricultural sector which can compete vigorously on an open market producing food at a price which the consumer can afford but which makes it worth-while for the farmer to stay in business. I do not believe that the White Paper has grasped the nettle firmly. I believe that unless we can come to grips with some of the problems and contradictions I have outlined we will continue to stagger from crisis to crisis and the hon the Minister’s portfolio will continue to be one of the most difficult to administer. I believe that the farming community of South Africa is ready to be weaned away from the grosser forms of protectionism, subsidization and general nose-wiping by the Government and is able to stand on its own two feet in a more flexible marketing system. The hon Ministerseems to be wanting to move in that direction himself and we welcome it but I think that he should do so more firmly and he would be surprised at the amount of support that he would get from both the consumers and the producers if we were to do this.

Mr Chairman, I listened attentively to the hon member for Albany and I greatly appreciate the thanks he conveyed to the Government for timely and sufficient help to the drought-ravaged areas. We also appreciate his commendatory remarks about the value and impact of the White Paper in agriculture. Since the hon member has grave reservations and problems in connection with certain conflicting goals in the White Paper, such as the one-channel marketing of products, the hon the Minister gave him the assurance that he had directed the National Marketing Council to carry out a very thorough-going investigation into the functions and effectiveness of all the control boards. I believe that these problems he stated will be dealt with by way of investigations to be carried out by the National Marketing Council that were initiated and announced here by the hon the Minister.

However, I cannot escape the uneasy impression that the hon member left me with. Like me, he is a farmer, but it seems to me as if he wants to give the Government the responsibility of taking the decision as to what I, as a farmer, should and should not produce, and that is impossible in the free market system. This agricultural debate of 1984 will be known in future as an historic debate. The reason is obvious. For the first time in a period of 38 years a White Paper for agriculture is before this House during an agricultural debate. When, a few years ago, the hon the Minister of Agriculture announced that he was going to draw up a new White Paper for agriculture, there was widespread interest in and appreciation for such a step. As the year progressed we experienced a continual and extremely disturbing determination of the farmers’ financial position due to disastrous drought conditions and the detrimental effect of inflation and high interest rates. This situation gave rise to growing expectations in certain circles that the White Paper for agriculture would provide answers for this financial pincer situation in which the farmers find themselves. Although one has a degree of sympathy for such a natural reaction from the farmers in their extremely difficult position, it was never in fact the philosophy and purpose of the White Paper to seek directly specific and purposeful solutions for specific problems in the industry. Mr Chairman, it is not only the Department of Agriculture and we on the Government side who adopted this philosophy with regard to the White Paper, but also the South African Agricultural Union, as the mouthpiece of organized agriculture in the Republic of South Africa. In a submission to the Department of Agriculture by the SAAU on 30 November 1983, in which the agricultural union’s standpoint in respect of the formulation of an agricultural policy in a White Paper was stated, we read on page 23 under paragraph 4.1 the following in respect of the philosophy underlying the White Paper:

Then the SAAU proceeds to formulate a general philosophy or central objective for an agricultural policy, and goals whereby to achieve this objective. The specifying of objectives takes place against the background of certain given realities in our national economy, and the acceptance that the pursuit of these goals must be reconcilable with these realities. The philosophy underlying the White Paper, the purpose and value which the SAAU attaches to the White Paper, is therefore exactly the same as that which the Department of Agriculture has in mind. Therefore the White Paper is a point of departure in the effective formulation of an agricultural policy for the RSA. It is an agricultural policy with a well-founded central objective and clear and logically formulated targets whereby to achieve that objective which will naturally give rise to specific operational planning as well as an order of priority in terms of which to achieve these goals. In the White Paper the scope of this central objective and the goals whereby to achieve it are adapted and reconciled to certain given realities in our national economy. These give realities therefore set certain crucial requirements for an agricultural policy.

The first broad requirement is that an agricultural policy must be adaptable in changing circumstances. Therefore the White Paper must not be seen as a time-bound document. Particularly in the times we are living in in South Africa, constant renewal of ideas and flexible planning programmes are necessary if we are to adapt an effective agricultural policy to changing circumstances.

The second broad requirement is that an agricultural policy must be reconcilable with the general economic policy of our country. Agriculture is and will continue to be a key industry in the economy of our country and therefore its development must take place in the greatest possible harmony with the broad economic development of our country, always bearing in mind the characteristic and hazardous nature of agriculture.

The third prerequisite is that an agricultural policy must be geared towards surmounting two crucial challenges in our country, viz the feeding of South Africa’s rapidly growing population from its own limited agricultural resources, and the playing of an increasingly important role by agriculture in providing employment for South Africa’s growing labour force.

We have reached the stage at which fewer farmers have to produce more on less land to feed more people. We have also reached the stage at which everyone in this country, particularly the planning agencies, will have to realize and acknowledge that agriculture affords the greatest possibilities for the provision of employment to a growing nation. What is even more important is that purposeful planning should be carried out in accordance with these convictions.

I am convinced that in the formulation of this White Paper influences on an agricultural policy which can be exerted by environmental factors or given realities are dealt with in the most effective way. The result is a policy document in which the policies of the past are incorporated in agricultural policy as a logical unit from which a clearly formulated objective and clearly defined goals are derived. Accordingly, on this occasion I want to convey my wholehearted congratulations to the hon the Minister of Agriculture, the hon the Deputy Minister of Agriculture, the Director-General—Dr Dirk Immelman—and his team on an outstanding piece of work. The White Paper is a document of which everyone in agriculture can be proud. It is a document that will motivate all agricultural industries to draw up new operating measures and priorities in order to achieve the proposed goals. On the other hand, by accepting this White Paper the Government has committed itself to achieving certain given goals and this is going to make very heavy demands on the hon the Minister of Agriculture and the entire department. For those who seek teeth or opportunities for bargaining in the White Paper, this is where they are.

By accepting this policy document the State has committed itself to pursuing three crucial goals in the agricultural sector. [Time expired.]

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

Mr Chairman, I thank the hon member for his friendly gesture in allowing me to complete my speech.

The first of these crucial goals is the preservation of agricultural land. On the road ahead the Government will have to assess applications for alterations in the utilization of land, ie other than for agricultural purposes, with the utmost care and circumspection. This challenge will require greater coordination and purposeful planning by the various Government bodies.

Moreover the State has committed itself to optimum usage of the dwindling natural resources in South Africa. In pursuing this highly important goal the State is committing itself anew to accepting responsibility for research, extension, training and marketing arrangements. This undertaking that has been given will not only make greater demands on the practical planning capacity of the Department of Agriculture, but will certainly also make heavier demands on State supported funds to make these services effective and practicable.

To me the most important goal to which the State has committed itself anew, is the endeavour and planning to keep the maximum of well-trained and financially sound farmers on the farms. This is important to me because I believe that the salvation of agriculture lies in the salvation of the family farmer. When I over-emphasize the pursuit of this goal, I am, on the one hand, fully aware of the positive approach and the success with which the Government’s emergency relief plans in certain drought-ravaged areas have enabled farmers to survive. Throughout the North-western Cape there is profound gratitude and appreciation for the Government’s phased drough-relief plan which, after seven years of disastrous drought conditions, has enabled the farmers to stay on the farms.

Notwithstanding this remarkable achievement by the Government I am, on the other hand, deeply concerned about the weakening financial position of the farmer over a broad front in the agricultural sector. The gravity and scope of this statement is emphasized by the analysis by the South African Agricultural Union of the overall economic situation in agriculture, as released in document 14/84 dated 17 February 1984. I wish to quote a few statistics from this document to emphasize a dangerous trend in agriculture. According to these statistics the net farming income over the last three years has dropped by R1 487 000 000 from a high of R2 672 000 000 in 1981 to R1 184 000 000 in 1983. This represents a drop of almost 60%. This can largely be ascribed to the destructive effect of the disastrous drought, and yet the necessary consequences of this are inevitable. The result has been that the yield on capital invested in agriculture dropped from 8,8% in 1981 to 3,2% in 1983. The necessary further consequence of this has been that cash flow, or production capital, has dried up. Thus in 1975 agriculture required R0,25 in the short term to realize an income of R1, whereas for 1982 the figure was R1,64. This ratio definitely weakened further in 1983. The necessary consequence of this has been that interest as a cost item in the agricultural production process increased from 8,1% in 1981 to 12,1% in 1983 as a percentage of the gross farming income.

The only logical inference which can be drawn from these data is that the financial position of the farmer over the last number of years has weakened to a disturbing extent. Even after making considerable allowances for the negative effects of the disastrous drought, the trend remains disturbing. One analysing the situation one cannot help drawing the following three conclusions. These three conclusions emphasize the most important financial bottlenecks in agriculture. Over the past number of years the agricultural sector has not had the capacity to build up reserves. The low and still dwindling profit margins in the agricultural sector have shown indisputably over the past few years that the high interest rate pattern is inappropriate to the hazardous nature of agriculture.

The greatest single bottleneck in agriculture in the short term is twofold. Firstly, it is the lack of a method of financing appropriate to the hazardous nature of agriculture and, secondly, the lack of effective economic extension to the agricultural sector. I realize that these two bottlenecks have been the subjects of investigations by two committees in agriculture, viz a subcommittee of the Jacobs Committee known as the Committee for Problem Areas in Agriculture and to a lesser extent the Committee of Enquiry into Services to Agriculture. The reports of these investigations and the recommendations contained therein will be made available in due course. In the interim I wish to ask the hon the Minister to ensure that with a view to the credibility of the practical implementation of the goals set in the White Paper, very careful attention be given to the following requests, and, if possible, that they be given practical effect.

Agricultural training must be made one of the top priorities in the agricultural sector. The success of agricultural production is, in the final instance, in the hands of the farmer. The utilization of agricultural resources and the application of technical knowledge and extension is determined by the decisions of the farmer and therefore we have reached the stage in our agricultural development at which we cannot cut down on the cost of agricultural training without valid reason, particularly in the process of expansion of our agricultural colleges. In the second place, the farmer and the co-operative enter-prizes must be put in a position to build up more reserves under an adjusted income tax system. If that is not done the farmers’ self-image will be destroyed and the basic function of a co-operative, viz to ensure stability and long-term growth in the agricultural sector, will be totally frustrated. In the third place, the Land Bank must be put in a position to operate in terms of an adjusted financing structure which, on the one hand, will not have a detrimental effect on the country’s monetary policy but, on the other hand, will make possible a reduction in the Land Bank’s lending rate. At the same time the possibility must be investigated of supporting commercial bank financing to agriculture by way of State-controlled allowances.

Moreover, it should be made a priority in the extension programme of the Department of Agriculture that of effective financial extension and planning be made available to an increasing extent to the agricultural sector.

If these broad guidelines are incorporated in a programme of action in the long, medium and short terms in order to achieve the goal, of retaining the maximum number of well-trained and financially sound farmers in agriculture, then the Government will to a large extent have carried out its undertaking to agriculture in the White Paper, in that farmers will have been put in a position to be well-trained, to be well served and to be able to obtain the necessary adjusted financing, as well as to build up reserves so as to be self-sufficient. The impact of the White Paper is specifically to be found in the fact that for the purposes of the achievement of each goal, fresh and original ideas whereby to adapt to changed circumstances are stimulated.

The impact of the White Paper is further increased in that the Government has committed itself, on this path of original ideas and planning, to join forces with everyone in agriculture in order to pursue stability and security.

Finally, in the overall practical implementation of the agricultural policy, we must give priority to the important strategic role which the agricultural sector of the RSA can play in South Africa. It is becoming increasingly essential that the implementation of our agricultural policy should be so effective and stimulating that its influence will be felt across our borders. This is important from a marketing point of view, because Southern Africa and Africa are the most natural markets for many agricultural products and for processed agricultural products of South Africa. This politically important as well, because the agricultural sector in South Africa can be the bearer of good attitudes and the builder of sound co-operative agreements in Southern Africa. Therefore the agricultural sector in Africa can play a crucial role in bringing about stability and peace.

Mr Chairman, I request the privilege of the second half hour. We can probably all agree with what the hon member for Ceres had to say and I do not wish to comment further on his speech.

However, Mr Chairman, permit me just to come back for a moment to the hon member for Albany. I think that to put it mildly, he made a few statements here which cannot be left unanswered. The hon member made the allegation that due to the fixed price one-channel marketing system that we have for certain products, the farmers gamble. He said that they gamble, and if they hit the jackpot they put the profit in their pockets, whereas if they do not, the Government has to pay the score.

Then it foots the bill.

Yes, then the Government has to foot the bill. Mr Chairman, I honestly do not know what prompted the hon member to make such a statement, because it is in total conflict with the factual situation. Since the hon member for Albany is apparently such a fiery champion of that sacred cow, the free market system, I want to ask him just to give a moment’s consideration to what the position would have been in South Africa this year, now that we have had a failed maize crop for two successive years, if the State and the Maize Board had not stepped in with regard to the marketing and acquisition of maize in order to meet South Africa’s need. I do not believe—and one can only speculate—that there could have been a consumer price of only R220 per ton if that function had been left to the so-called free market mechanism.

So you are not in favour of a free market?

I am coming to that. Mr Chairman, nowhere in the world, not even in the mighty United States of America, does the classic free market system apply also to agriculture. It does not apply there. [Interjections.] Due to the special nature of agriculture—I do not think that anyone with any knowledge of agriculture can differ with me here—it is absolutely vital that the State should, in the first place, ensure that there is price stability. Secondly, it is imperative that the State should interfere from time to time in the operation of the so-called free market mechanism in order to make adequate provision in this regard. I do not believe there is any agricultural leader in South Africa who would want to dispute this statement of mine.

The hon member for Albany contended that due to our marketing system, the farmers of South Africa have now become inefficient.

I said that it encourages inefficiency; I did not say that they were inefficient.

He also contended that our farmers were not capable of competing with the outside world on overseas markets. Surely there are several agricultural products of South Africa—including those that are controlled—that do compete, and compete successfully, with the products of the outside world in the free market system. Therefore the statement that is made here without qualification, viz that the marketing system and our system of control are responsible for the problems in agriculture, simply does not hold water. I think it would be a sad day if the basic principles of our marketing system in South Africa were to be tampered with. It is appropriate and right that the Government and the Marketing Council and the various control boards should from time to time examine the practical, day-to-day operation of the scheme. We believe, too, that there is room for improvement and that changes will have to be made in order to adapt to changing circumstances and changing production methods. That is essential. However, I think that to move at this juncture towards the abolition of control, and to think that this will afford the solution for agriculture, is asking too much.

Casper, he never said that.

Mr Chairman, we do not have sufficient time to hold a proper debate on the White Paper published by the hon the Minister, because needless to say this is a Budget debate which deals specifically with the Budget before us. I do not believe that there is any fault to be found with the basic goals as set out in this White Paper. I think we can endorse it. Nevertheless it is necessary to debate the Agriculture Vote this afternoon as presented by the hon the Minister of Finance; that is our task. We must consider the figures before us here in the light of the goals and the aims set by this White Paper. We must ask whether the Budget proposals as they stand before us are in line with the praiseworthy goals as embodied in this White Paper. The hon the Minister was right when he said that it was all very well to have goals and objectives, but he was quite right to add that the programme of action whereby to achieve those goals was far more important.

I just wish to react in passing, Mr Chairman, to something that the hon the Minister said in regard to mechanization in agriculture. The hon the Minister sounded a warning and expressed his opinion that we should not over-mechanize, because South Africa has an oversupply of labour. That may be so, but I have reached the conclusion, also with regard to the part of the world in which we farm, that there are several farmers today who have no alternative but to mechanize. This is because labour is not as readily available to agriculture as is always assumed, and the labour that is available can sometimes leave one in the lurch in the most critical times of the year. Therefore I cannot reproach any farmer who, for the sake of his own farming enterprise, mechanizes to the greatest possible extent and makes himself independent of unreliable labour.

Mr Chairman, I just wish to refer briefly to one objective stated in this White Paper; viz the pursuit of a maximum number of well-trained and financially sound owner-occupant farmers. That is a praiseworthy aim. Then I have to look at the Budget before us and I also have to consider the annual report of the department itself which, it is true, does not deal with the past year, but the previous two years. If one considers, on the basis of these documents, what has been spent by the Government by way of the provision of loans to prospective farmers through the Agricultural Credit Board, then this is cause for some concern. In the year 1981-82 loans amounting to R21,5 million in regard to land purchases were granted to 242 farmers. In 1982-83 this figure dropped to only nine loans granted for a total amount of R574 000. In other words, that State programme to make cheap money available to prospective farmers to obtain such land virtually came to an standstil in 1982-83.

It shifted to the Land Bank.

The hon the Deputy Minister states that it shifted to the Land Bank. That may be so, but surely we know that the interest rate payable to the Land Bank differs significantly from the interest rate that used to be payable in terms of these loans.

Let us also look at this year’s Budget. During the Budget debate I was reproached by various hon members for having asked the hon the Minister of Finance where he had budgeted for the grave situation in which the farmers of South Africa find themselves at present. In the hon the Minister’s Budget a total appropriation of R459,7 million was provided for. Moreover, the assurance was given by the hon the Minister that the surplus of R125 million for which he had budgeted could also be used for agriculture. We then adopted the standpoint that that might not be sufficient. Now, a mere six weeks after the main Budget, the hon the Minister of Finance increases general sales tax from 7% to 10% and, as has now almost become the custom, agriculture is presented as—I want to say this bluntly—a scapegoat. This is not the first time that this has happened. Every time general sales tax has been increased recently the reason advanced has been that it is the fault of agriculture.

In his announcement of the increase in the general sales tax, the hon the Minister of Finance foresees that in respect of the subsidy on maize alone he will now have to find an additional R200 million. Therefore I do not believe that we have before us today a full picture of what the financial implications of the Budget will be for agriculture in the present year. Far from it. The actual expenditure of the Department of Agriculture in the previous financial year was more than R800 million, but now the hon the Minister is only budgeting for R467 million. Surely that is merely common sense; all of us, including the hon the Minister of Finance, know what the present position of the farmers of South Africa is. Now general sales tax is being increased from 7% to 10%, and our fanners are getting the blame for that.

However, what is not said in the same breath is that the same farmers who are now being blamed, also pay general sales tax on many of the requisites they need to be able to produce. In this regard I refer specifically to so-called capital goods—implements, tractors, etcetera. I should appreciate it if the Department of Agricultural Economics could carry out an investigation in order to ascertain from the agricultural co-operatives what annual amount is paid to the State by the farmers in general sales tax with regard to the purchase of such items. I think we would be astonished if we were to calculate the total figure.

Mr Chairman, when we conducted a general debate on agriculture earlier in the year, I put forward the standpoint that provision had already been made for means of production with regard to the exemption of general sales tax. Why should it not be possible to do this consistently? Why should the farmer, who is in a crisis situation, still be burdened with a further 3% on the purchase price of his implements, tractors, etc? I do not think that that is justified.

We also proposed that in the drought-ravaged area, particularly the summer grain area, there should not only be a general survey by the State, but that a real survey should be made of how many farmers there are left who will still be able to continue. Now we are told that the Agricultural Union has in fact made a survey through the cooperatives. From this it is evident that more than 25% of those farmers will no longer be capable of obtaining credit. That is 28%. The hon the Minister says that 28% of the farmers will no longer be able to obtain any credit at all. A further considerable percentage will not be able to obtain sufficient credit to plant another crop. In the general debate we conducted we courteously requested the Government to take extraordinary steps to avert a real economic crisis in agriculture. Can you imagine, Mr Chairman, what a tremendous disaster it would be if 25% of the farmers in any given area had to leave their farms?

It has not gone as far as that.

I know that it has not gone as far as that, but we must take timeous steps to prevent this. There is no point in closing the stable door after the horse has bolted. 28% of the farmers can no longer obtain credit; how, then, are they to continue? It was for that reason that we requested that in this instance the State adopt extraordinary crisis measures to save agriculture.

Put the CP in power, and then we shall show you—then this Minister of Agriculture will show you. [Interjections.]

Mr Chairman, I know that the problems faced by agriculture are not simple, but the summer grain areas, in respect of which the normal production costs are perhaps relatively the highest in comparison with all other agricultural industries—with the exception of the wine industry in the Cape—and which are considerably higher than those of the stock industry, have, through none of their own doing, been plunged into a crisis unparallelled in South African history. Therefore, if we were to deem it necessary to give other people for whom we are not responsible, a financial leg up, then I believe it is nothing less than a requirement that we begin, in the first place, on our home ground, if at all possible, to enable those farmers to find their feet again. Therefore I should like to ask the hon the Minister whether there are any plans—as we have requested—if there are forced sales of a substantial number of farms or land, for the State to consider stepping in in such instances and interfering in the operation of the so-called free economy. Because if that were to happen and the State did not do so, the agricultural industry would be plunged into a crisis unequalled in our history.

Mr Chairman, the hon member for Barberton raised quite a number of matters and I am sure he will pardon me for not reacting to everything he touched on. The hon the Minister will undoubtedly reply to that. However, I have a completely different subject which I want to discuss.

I want to come back to the White Paper which concerns the agricultural policy which we were all looking forward to and which has now been laid upon the Table. I also want to associate myself with previous hon members who expressed their heartfelt gratitude to the hon the Minister, the Department of Agriculture as well as all other agricultural organizations for the tremendous contribution they have made in getting this White Paper to see the light. In my opinion, it is an excellent document.

It may be that greater expectations were created than are to be found in the White Paper, but I think it would also be wrong to expect the White Paper to be comprehensive. However, I want to confine myself to the general background which I find very interesting and illuminating, since in the first instance the emphasis here is on the serious limitations and limiting factors with which we in South Africa have to contend, and about which we can do nothing or very little; secondly, the factors about which we can in fact do something; and thirdly, the important function of agriculture.

South Africa’s natural resources are subject to serious limitations—no one can dispute that. Almost a quarter of the country’s area has an average annual rainfall of less than 200 mm, whilst two thirds has less than 500 mm of rain per annum. Only 12% of South Africa’s total area of 122 million ha is arable. Of that, only 4 million ha can be regarded as high-potential soil, and we cannot increase this high-potential land for all the money in the world. This includes the greater portion of the approximately 1 million ha of irrigation land. The 4 million ha high-potential land is responsible for almost 40% of the total agronomic and horticultural production. These are undoubtedly serious limitations and limiting factors.

A great deal can be done about the following factors, however. Soil losses are alarmingly high and is exacerbated by excessive amounts of sediment which lands up in dams and river-mouths annually. Is there still too much agricultural land that does not have contours? Furthermore, natural grazing is showing an alarming deterioration and this leads to different forms of erosion. Apart from that, there are towns, the transport network and other services which also take their toll. This is therefore concerned with the preservation of agricultural land, and the question now is: What is being done about this, and is it sufficient?

Mr Chairman, in this regard I should like to refer to the annual report of the Department of Agriculture, and I also wish to express my gratitude for this very meaningful and illuminating report. I also want to refer to an important Act, in my opinion, viz the Subdivision of Agricultural Land Act, 1970, and I just want to quote one paragraph, viz:

This Act is producing excellent results, but I do just want to know from the hon the Minister whether the time has not come to give attention to the question of excessive ownership of agricultural land. Is this not perhaps just as much of an evil as uneconomic units?

As regards applications for the subdivision of land for non-agricultural purposes, the following is stated:

Since 1971, 200 390 ha of agricultural land have been set aside for urban expansion, an average of 16 700 ha per annum, and consequently demands for agricultural land for purposes other than agriculture will have to be dealt with very circumspectly and with the greatest degree of responsibility. The hon member for Ceres also referred to this. A stage has been reached where fewer farmers have to produce more on less land in order to feed more people. That is the truth, Sir, that is the direction in which we are moving.

Agriculture is one of South Africa’s key industries and as such it plays an important role in the national economy and it also contributes to the deconcentration of economic activities. Notwithstanding the limited agricultural resources and their vulnerability, agriculture provides for almost all the food and fibre needs of the population which is not only growing rapidly, but whose standard of living is constantly improving. It supplies raw materials to the manufacturing, processing and distribution industries. It is a major consumer of the products of trade and commerce and it is also an important provider of employment. Apart from that, agriculture is also a major earner of foreign exchange, and acts as protector of the soil.

South Africa has in fact been able to increase the gross value of its agricultural production over the past decade, to maintain an average 3% increase in the volume of agricultural production, and after gold, it is the largest earner of foreign exchange with its agricultural exports. The limiting factors to which reference was made and the structural changes in agriculture necessitate the reformulation of South Africa’s agricultural policy to adapt to changing circumstances, however. This entails the formulation of an objective and the identification of goals to achieve that objective according to a planned programme of action, which takes into account the influence of special environmental factors.

Apart from the White Paper on agricultural policy in South Africa which was released on 16 February 1946 by the Department of the Prime Minister, the agricultural policy of South Africa has been spelt out by the Government on various occasions. In that White Paper of 1946 it was mentioned, inter alia, that it is Government policy to maintain farming as one of the main branches of national diligence in the Union. In that regard various factors which contribute to economic stability in agriculture were dealt with, and in particular the emphasis was on conservation farming, research and information, and on the role of the control boards to promote orderly marketing and price stability.

The welfare of agriculture does not only affect the farmer. It also affects the rural areas and the secondary industries which absorb agricultural products. Due to the extent of its inputs and outputs, agriculture has an important influence on the national economy in general, however. It is therefore an essential requirement that agricultural policy should be reconcilable with the general economic policy of the country. That is undoubtedly very important. [Time expired.]

Mr Chairman, I will not at the beginning of my speech refer to any of the previous speakers because as I proceed with my speech I think it will become clear that I have incorporated certain aspects of the points that they have raised in my own speech.

When entering the debate on this Vote, one is immediately aware that the hon the Minister has inherited a portfolio which has had to contend with a number of unscheduled and unexpected problems which under normal circumstances would not have found their way onto his desk. One cannot deny that he has shown courage and determination in his attempts to deal with the many problems that have been caused by the recent drought. I therefore wish to express my sincere thanks and that of my colleagues to the hon the Minister and to the hon the Deputy Minister, and to the officials of the department. I also want to express a particular word of thanks to those officials of the Land Bank who were obviously very hard pressed and considerably overworked. One must obviously express one’s appreciation as well to the hon the Minister of Finance, who found it possible to make the necessary funds available when they had been most needed. It is quite apparent that but for the relief measures the Government has provided, agriculture in the summer rainfall areas would have completely collapsed and the long trek to the towns and cities would have been well under way by now.

The one question that must concern all of us—and this will be unanswered for quite a few years yet—is whether farmers will be able to get themselves out of the debts they are carrying today. This is going to be a very trying experience for many of them. One of the dangers here, of course, is the question of high interest rates which have to be paid on these debts. I would predict that within the next year the Government itself will have to give a very clear indication as to what further assistance it can give in this regard. As it is, people have moved from the platteland, but it is safe to say that as a result of the positive Government action the stream to the urban areas has been reduced to a trickle. One must realize, however, that the scars of three years of drought will serve as a reminder for many years to come. The hardships that have been experienced in the 1980s will not be forgotten easily. Rural economies have taken a pounding and many businesses in the rural areas have been forced to close down, but on the other side lessons have been learned from the drought, the most important, in my opinion, being the fact that the entire population of this country has felt the effects of the drought years which has brought with it a greater awareness amongst all sections of the community of the hazards and hardships that exist in agriculture.

I do not wish to detract in any way from the excellent response by the Government to the call for financial aid, but I must warn that the agricultural sector itself must not be lulled into a false sense of security by assuming that the Government will react as positively to future calls for assistance as it has done during the past two to three years. This could be caused by a number of factors, not the least being a lack of available funds. I view with concern that agriculture in this country is being drawn more and more into the financial ribs of the State. This is not a desirable trend in the long term because agriculture must always retain—and this is most important—its identity, its individuality and its independence. Any departure from these principles would place the Government in a position where it would find itself compelled to become more and more involved in the industry to protect its interests. For this reason it is important that agriculture does not lose its initiative to stand on its own feet in spite of the disappointments and the frustrations of recent years. It behoves the industry too to ensure that the State is not put in a position where it finds itself assuming the role of a sleeping partner. Agriculture must remain unfettered in the hands of the farmer and not subject itself in any form to external pressures.

I now wish to come to the White Paper which has been tabled recently. Let me say from the outset that like the hon member for Albany I am disappointed in the document in that, as I see it, it states the obvious and gives no clear indication as to what strategy could or should be adopted to achieve its envisaged goals. I must admit that I have been greatly heartened however by the introductory speech of the hon the Minister at the commencement of this debate. To my mind the White Paper lacks teeth. However, the hon the Minister, as he has already done, may wish to throw more light on the Government’s attitude during the course of this debate.

I have also taken the trouble to study aspects of the 1946 White Paper and I must admit that while it is more comprehensive and requires more study, I found it to be a more dynamic and positive document.

Returning to the White Paper itself I should like to assure the hon the Minister that I appreciate that it is extremely difficult to transform guidelines into practical action, but the one aspect that stands out like a sore thumb, is that there is a need for a complete reappraisal of extension services if the theme of the White Paper is going to be given any credibility at all. One has only to refer to the section in the White Paper that deals with the production goals associated with a sound agricultural policy to realize that most of the objectives listed in this section must be linked to a strong extension service. This applies equally to the second paragraph, in which the need for the preservation and planning of agricultural land is repeatedly emphasized. It is obvious, therefore, that the successful implementation of the envisaged objectives lies in the restructuring of the extension service, which must be in line with present-day and future requirements of agriculture. This is a priority and the first question that comes to mind is whether too much emphasis has been placed on technical services in the past and whether insufficient attention has been paid to economic factors.

Another aspect—and this I feel can also be termed as a starting point—is a greater allocation in the Budget for the purposes of extension services as well as a further review of staff structures and salaries. [Time expired.]

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

Mr Chairman, I thank the hon Whip.

It is most important and vital to agriculture itself that extension staff be encouraged to stay with agriculture. We are losing far too many experienced staff members. At this juncture let me pay tribute to the excellent work which is being carried out by the officers in the extension services at the present time. They carry out their duties under sometimes very difficult conditions and play an important role in curbing undue exploitation of natural resources, as well as being responsible for the promotion and application of sound farming practices, but sadly there is not a sufficient number of them to serve the country’s needs adequately. One must also not lose sight of the fact that a great deal of extension work is being carried out by co-operatives and other business organizations. These functions are directed, though, mainly to a product, without necessarily taking into consideration other important factors, such as the suitability of the product to a particular environment and the longterm effects involved. The services rendered by these private organizations have been of considerable benefit to the farming community and have been responsible in many cases for improved farming practices. I would appeal that there must be greater co-operation and co-ordination between the department and these private organizations that are providing these extension services.

I would now like to return to the broader agricultural issues that bear relevance to the White Paper and in doing so I wish to submit four recommendations to the hon the Minister for his consideration.

Firstly, extension services, to which I have already referred, should be further decentralized in order to cover many and varied ecological differences that occur from area to area.

Secondly, greater emphasis should be placed on the exploitation of the agricultural potential of an area in relation to its available natural resources. This would take care of the reference in the White Paper to the optimum use of high potential land and reduce the incidence of undesirable production trends in marginal areas.

Thirdly, a more flexible approach is needed in regard to the processing of applications for financial assistance to farmers, taking into consideration the topography, productivity and productivity potential of a particular area. A shortcoming at present is the possible strict adherence to general basic formulae as a means of determining the justification of such assistance.

Fourthly, an improved means of communication of information between the department and the farmer and between farmer and farmer is necessary. Let met take it quite clear that I am full of praise for the services presently rendered. I am referring particularly to the radio programme “Calling all Farmers” and the daily market reviews. There is, however, a deplorable deficiency in getting, as it were, the message across. It is important that the present system of disseminating information be expanded. I would suggest that this is a matter which could also be discussed with all sectors of organized agriculture.

I now wish to deal with certain pertinent references in the White Paper regarding the need for and the maintenance of sound labour relations, and the efficient use of labour and the enhancement of the level of skills of farm employees. One cannot lose sight of the fact that agriculture in this country has been developed along the lines that there will always be a sufficiency of labour, and it would appear that this will continue into the foreseeable future, provided the agricultural sector adapts itself positively to the social requirements of its workers. This must take the form of improved housing and living conditions, realistic wage structures and a high level of education and training for the employees. The adoption of measures of this nature will be the best means of ensuring a stable labour relationship as well as encouraging greater productivity, to which hon members have already referred.

I note with approval the references to assistance measures by the Government in order to provide for social and welfare needs of farm labourers. This pinpoints the unique relationship that exists between the farmer and his employees and their families. Generally speaking, industry has a much tougher approach to labour matters and retrenches staff at will during periods of economic recession, while on the other hand agriculture cannot apply this norm and has to contend with the social factors which go far deeper than the normal relationship that exists between employer and employee in industry. It is logical, therefore, that the role played by employers in the agricultural sector in providing a stable existence for their workers and families should be fully recognized.

Mr Chairman, I have not yet heard the hon member for Mooi River making an irresponsible speech on agriculture in this Committee or in the House. He does not hesitate to criticize if he thinks it is necessary, but nor does he hesitate to make certain recommendations. This afternoon he criticized the White Paper and said that it was a little vague, etc. I can tell him that one has to be very careful not to argue superficially about this afternoon’s White Paper. May I associate myself with those who congratulated the Ministry and the Department on an excellent White Paper on Agricultural Policy and on the fact that they did not allow themselves to be led astray in making of it something other than the basic policy document it ought to be. As befits a good builder, the hon the Minister has laid the foundations, viz the policy goals, on which a basically sound agricultural industry can be built for the challenges of the future. This hon Minister does not with to be popular agriculturally, he wants to be agriculturally responsible. It would attest to superficiality if an attempt had been made to identify problems in the agricultural industry and to formulate solutions for them without basic philosophical long-term premises. Hon members who have not studied the submission of the South African Agricultural Union will notice a marked similarity in premises. Hon members on this side will deal systematically with all policy goals contained in the White Paper during the course of this debate.

I want to confine myself to the production goal which is aimed at serving as a guideline for the solution of structural problems in agriculture, such as the distorted division of income amongst entrepreneurs, which has repeatedly been identified as a serious problem. I am referring to the pursuit of a maximum number of well-trained and financially sound owner-occupant farmers, and I want to deal in particular with striving to maintain the character of South African agriculture, viz retaining as many land-owners as possible.

Bona fide farmers, the holders of title deeds, are part of the cultural heritage of the Afrikaner in particular, and I believe that fundamentally this should not be tampered with. Traditionally, the South African farmer’s land is also his security. The registration of bonds against title deeds has developed traditionally as practically exclusive security for medium and long-term loans. This does not only apply to the Land Bank, the Agricultural Credit Board and co-operatives; financing institutions in the private sector also insist on the registration of bonds against fixed property. It remains a fact that land is one of the safest forms of security and many an entrepreneur, in the non-agricultural sector as well, believes in purchasing land as security against inflation or even to make provision for old age. The reason, of course, is the continued increase in the capital value of land. This phenomenon, however, has contributed to making it increasingly difficult for farmers who are starting out to enter agriculture. The revival of entrepreneurship is being seriously impeded by this. I associate myself with the hon member for Barberton as far as that is concerned. Nowadays one can practically only begin to farm if one has inherited a farm or if one marries a wealthy woman. I am therefore extremely grateful that the White Paper is for the first time acknowledging the importance of part-time and tenant farmers as an essential part of South African agriculture. These two forms of entrepreneurship are normally associated strongly with farmers who are starting out. For many this is the only way of entering agriculture and of ultimately being able to stand on their own legs after the first years of adjustment have been overcome. The problem is that nowadays these two groups of farmers are being discriminated against by practically all financing institutions. In terms of policy, part-time farmers do not qualify for financial assistance, and a tenant farmer with a deed of lease does not have a snowball’s hope of financial assistance, because he is not the holder of a title deed. I am not pleading for a revolutionary change in the character of South African agriculture. I am pleading for a balanced approach. I am pleading for part-time and tenant farmers to be regarded and treated as a necessary subdivision of a modern, developed agricultural industry. Risk distribution is an accepted principle in any business. It does not only apply to maize farmers who know that bringing a strong stock factor onto the farm brings stability to the farming enterprise, it also applies to risk distribution among various sectors of the economy. Just think how much better farmers in the drought-stricken areas would have been able to overcome this serious drought condition in South Africa’s history if they had also had interests in the non-agricultural sector. Part-time farming must form part of the structure of a modern agricultural industry.

In my opinion the time has also come for a more clearly defined distinction to be made between ownership and the use of agricultural land. Less than 16% of all agricultural land in South Africa is being leased—and this includes sharecropping—whilst it is known that there are so many large land-owners who are unable to produce to the maximum due to the extent of their fanning enterprise. In this regard I associate myself with the hon member for Ladybrand. Furthermore, there are few farming regions in South Africa where the production value of land amounts to more than 40% of the market value. I am mentioning this fact only to emphasize that for many farmers who are starting out leasing land is the only way of entering agriculture, and that tenant farming is still playing a less important role in South African agriculture. In my opinion, the time has come for a deed of lease, such as a title deed, to be regarded as an acceptable security document by financing institutions. Tenant farmers do not want long-term credit, after all, and the most important requirement that should be set is the ability of the farmer to repay the loan with interest within the stipulated period. In any case, the farmer and not the farm, has always been the criterion for the ability of a farmer to repay. I think that in the interests of agriculture, in the interests of maintaining a fundamentally sound industry which can continue to compete with other sectors of the economy, the Land Bank, the Agricultural Credit Board, co-operatives and private financing institutions should look very critically at their financing policy—particularly as far as part-time and tenant farmers are concerned.

I should now like to refer to the 30 agricultural laws the State has to give effect to the stated agricultural goals in the White Paper. I find five of these particularly fascinating. Firstly, there is the Subdivision of Agricultural Land Act, which is aimed at preventing serious structural problems, which would arise if the injudicious fragmentation of agricultural land were pursued. Secondly, there is the Marketing Act of 1968 which aims at establishing the orderly marketing of agricultural products in the interests of both the producers and the consumers. I know that hon members of the official Opposition will probably refer to this in further detail in this debate, as they did during the discussion of the Marketing Act. I hope we will have an opportunity to conduct a debate on that in detail once again. Thirdly, there is the Co-operatives Act, which was re-written in 1981 and which empowers entrepreneurs in the agricultural industry to reduce input costs through joint action. Fourthly, there is the Agricultural Credit Act of 1966, in terms of which beginner farmers and smaller farmers are enabled to compete more effectively in the marketplace with larger farmers with the aid of lower interest rates. Fifthly, there is the Conservation of Agricultural Resources Act of 1983 which is aimed at establishing the optimum utilization of resources. Certain of these laws represent vehement points of dispute between producers and consumers, between farmers and city-dwellers, as we heard again this afternoon. This occurs fairly generally in the more developed countries of the world and could easily take on proportions which are not in the interests of the farmer or other sectors of the economy. The hon the Minister of Agriculture, however, has what is sometimes an intuitive ability to succeed in reconciling the interests of producers and consumers. It is a privilege to wish him and the Deputy Minister everything of the best in their task.

The hon member Dr Odendaal has dealt with the structural problems of agriculture and with the actual use of available ground and the Acts pertaining to agriculture. I do not intend dealing with those but I must say that he did make very good use of those particular points.

However, I would be failing in my duty if I did not refer to the speech of the hon member for Barberton. He attacked the spokesman of this particular party. In the first instance, he made the mistake of saying that everytime something goes wrong, it is the farmers that are being blamed. Nothing is further from the truth as far as what the member for Albany said...

I did not say that.

Yes, he did. He said that the farming community is always blamed. The drought is the cause of the particular problem and every person who lives in an urban area was also affected by this particular drought and it is quite understood why the farming community is in its present dire situation. Nobody has any quarrel with that particular point.

He also said that he disagrees with the hon member for Albany on the question of certain aspects of the Marketing Act. The hon member referred to one-channel marketing as one of the systems under the Marketing Act about which he has misgivings. He did not go into all the details of the Marketing Act. We, on this side of the House, are in full support of the Marketing Act and believe that the Marketing Act is important for agriculture. For instance, the fruit industry, whether it be citrus or deciduous fruit, is a perfect example of where you have a free market system which is still successful with a certain amount of control.

I would like to deal with one or two points which the hon the Minister dealt with. Let me say that as far as I am concerned, the real objective of an agricultural policy should be to provide an economically sound farming community, with well-researched goals for optimum economic and political and social development and stability for all the people in South Africa. To achieve this objective, the planning of the factors of production, together with the related functions, should be adjusted from time to time. I believe that one of the mistakes in this White Paper is that too much emphasis is placed on production—let us produce and then we will see where we can sell it. Mr Chairman, business does not work like that. I want to deal with the Marketing Act in particular and I want to deal with one particular one-channel system which is just about to unfold itself. In the White Paper on the agricultural policy of South Africa, we find under marketing goals the following: The pursuit of ordinary marketing, duly considering the principles of the free market system. This is not completely true, because the marketing of agricultural products under the existing Marketing Act and the policy pursued, is often neither orderly nor does it ever consider the free market system. Often, certain control boards utilize the powers given to them by politicians in this House, through the Marketing Act, to ensure that distribution and price fixation is done for the benefit of certain pressure groups to the complete disregard of the consumer.

Give us examples.

I am going to, just wait a bit. If administered prices and not market-related world prices set the price which the consumer within the fixed boundaries of South Africa has to pay, the consumer has no option but to pay. When control boards have the power to set down whom it wishes to appoint as agents of a board, it upsets the whole free market system of distribution. In times of shortage it is able to foist its will upon the consumer while in times of surplus it is unable to cope with the whims of the market place and often, like the Dairy Board, raises prices.

Let me tell this House of what may be a fiasco in the near future. Before doing that however, I want to say that I have the greatest sympathy with the hon the Minister of Agriculture because his predecessors lost control over the management of the Marketing Act. I want to deal with the grain sorghum pending fiasco. Unlike last season there is a potential crop of 500 000 tons of grain sorghum this year. Of this amount the farmers are likely to retain 50 000 tons for their own use. There will be about 50 000 tons of under-grade grain sorghum which will be sold through the normal channels. The malt manufacturing industry only consumes 200 000 tons but they will be only capable of handling about 150 000 tons now. This leaves 250 000 tons to be accounted for by the Maize Control Board. Exporting would provide a smaller income because of world market prices. With the maize shortage due to the drought we have an excellent market for this surplus in the animal feed industry. However, this feed industry can only absorb this grain sorghum at a maximum price of about 85% of the price of yellow maize because this is determined by the relative feed value of the grain sorghum as opposed to maize. Maize is being imported at very high prices and this grain sorghum surplus will help to reduce this maize importation. The price of yellow maize has been fixed at R220 per ton. Thus the price of acceptable value of grain sorghum should be R177 per ton—that is 85% of R220—which is equal to R187, less the levy of R10 per ton as levied by the Maize Board for 1984. The Maize Board has now, for reasons known to themselves, announced floor prices which effectively enable the farmers to command a gross floor price of R187 per ton. Only the Maize Board can afford to pay this price for grain sorghum. How it is able to do this if one takes into account the current state of the Maize Board’s finances is completely beyond my comprehension and I do not know how it is going to pay. These floor prices effectively destroy the opportunity for the grain trade with the feed industry to purchase the surplus of grain sorghum direct from producers.

Are you opposed to floor prices?

No, I am not. What I am trying to say is that the basis you should have is a floor price which a farmer knows is the minimum below which he will not sell his product, because, like in the bean trade, there is a floor price at which he can sell his product. After that one has any price and the farmers can try to get the best possible price. Here the Government has changed that. They use to have a floor price before. Now they have instituted a one channel system. Concerning private enterprise I think we must make a differentiation which the hon the Minister does not seem to understand. There are two types of companies. There are those that are registered under the Companies Act and those that are registered under the Co-operatives Act. Both of them are entitled to share in the efforts of the Marketing Board. It would appear that those which are registered under the Companies Act are far too often ignored and particularly when it comes to being agents and particularly in the case of the Control Board. Only one side of the companies are given the opportunity. There is going to be an absolute fiasco in the grain sorghum industry as a result. The result will be that the grain trade and the animal feed trade will be buying from producers at a slightly higher net price than they will obtain now. The grain trade would have sold to the feed manufacturers and the malt trade at a suitable price to allow the grain trade and the animal feed trade to make a small profit to which they are entitled. The storage of this is going to cost the Maize Board a lot of money, a loss of R7 million. [Time expired.]

Mr Chairman, I do not intend replying now to all the speeches made by hon members this afternoon. I shall do so tomorrow. However, I would like to bring a few specific matters to the attention of the House. Firstly, I think it is fitting that we sincerely congratulate the department and those who worked on the White Paper. It would be possible to place a very comprehensive document upon the Table. If one looks at the back of the White Paper at how the department is composed, how it is structured, one will see that one could write many pages about each one of those subdivisions. That is not what we had in mind. To turn a bulky document into a thin document which is readable and which remains meaningful, takes a great deal of work. I think the people who did so, who wrote it, deserve our gratitude and appreciation. Apart from that, I should like to place it on record that this new report, the annual report of the department, is in a new form. It is more condensed, it is more easily readable, it gives a tremendous amount of information, and I think we should congratulate the Director-general and his staff on this as well. To come back to the White Paper, I find it very interesting that the speeches made here this afternoon could all be related to the White Paper. There was not one speech which could not be related to the White Paper in some way or another. This gives me the idea that this document, although it is very thin and very condensed, is a document which covers a very wide field. I feel the need to speak about a matter which also relates to this White Paper, but it is a matter which is not often brought up in this House during the debate on agriculture. It is the following: In the White Paper we say that we have certain goals. In addition, we say further on in the White Paper that we have to get certain actions in motion to achieve these goals. Now one must put everything one has into achieving the different goals. One must not only look at the ability of one’s own department. One must not only look at the ability of organized agriculture, the co-operatives and the control boards within one’s own borders. It is also necessary that we look outside our borders. We must look at what we can learn outside our borders. I should therefore like to say a few words about our link with overseas countries. Last year the hon the Minister and I undertook a very short visit overseas. There we looked at marketing trends, and we also met some of our people who work abroad. One gained the impression that here was a group of people who receive very little acknowledgment, but who perform tremendous work, not only for agriculture in South Africa, but also for South Africa. When we got to Paris and spoke to the ambassador, he told us that many doors were being opened to us at the agricultural level which would not otherwise have been open.

†Prof Earl Buds, speaking before the Agrocon 1984, in January this year, made the following statement:

*I found that striking. I believe that in the times in which we are living this statement is more true than ever before. The other day I read that the donation of grain to Africa amounts to approximately 9 million tons. This is a sound average South African maize production and this is the donation of grain going to Africa. Despite this, there is famine in Africa. Despite these donations there is famine in Africa. This donation of grain is therefore by far not sufficient.

†The peace initiatives of the Prime Minister will have to be backed up by trade agreements, but the basic need at this stage I think is food and food technology. It is of no avail if we only give food to the people and do not teach them how to produce food. I think there we can make an enormous contribution. South African agriculture can never develop in an orderly way in isolation. In order to reach the goals set out in the White Paper it is essential that a close liaison be maintained with foreign researchers, marketing bodies and government bodies dealing with agriculture. On page 13 of the White Paper it is stated:

I want to add that knowledge of and contact with the global agricultural industry will make such evaluation more accurate and more meaningful. Trade channels must be kept open for import and export. Suppose for one moment that there was a trade boycott against us at this particular time when we need to import maize on a large scale, where would we have been?

*We keep these trade channels open through our foreign missions, through our agricultural links abroad. It is interesting just to note briefly that we have a large number of offices abroad—and I think we do not always take note of this. We have offices in Australia, Argentina, Belgium, West Germany, France, the Netherlands, Switzerland, England, the USA—we have one official in Los Angeles. What is the purpose of these officials? What are they doing there? They attend international agricultural congresses and report back to us. They are there to build up agricultural contacts with various countries in all fields. They collect agricultural literature and study economic trends in agriculture. They see to it that when our control boards go there are travel arrangements for them. They open up the world for us. I have here a report from our office in Paris. It makes very interesting reading when one sees that in countries where we are not welcome otherwise, agriculture is that vehicle which gives us connections at the agricultural level precisely through these international links we have. In addition, it also affords us the opportunity to hold congresses here from time to time. We recently had a wine congress in South Africa, as well as the sheep and cattle congress. At those congresses we have the opportunity to assemble a large number of top technical people on a large scale in South Africa. It is opinion formers who come here and see for themselves what is going on here and who return to their countries with a completely different image. They then act as ambassadors for us there. I therefore believe it is necessary—in terms of our White Paper—that we should move outwards and give more recognition to our men who work broad. I shall reply further to the speeches tomorrow.

Mr Chairman, I can find no fault whatsoever with what the hon the Deputy Minister had to say. However, I had hoped that the hon the Deputy Minister, who is concerned with the financing of agriculture and drought aid in particular, would have had a message of hope for those farmers who are struggling to survive in the dire circumstances we are experiencing.

I shall react to that tomorrow.

Very well, I should be pleased. The impression was created that the hon the Minister and the hon the Deputy Minister more or less have to dispose of the lion’s share of the handsome sum of more or less R1 525 million for the drought. When the second increase from 6% to 7% was announced, the drought was said to be the main cause This would bring an expected estimated revenue of R600 million to the State. Subsequently the hon the Minister of Finance said that the R125 million surplus he foresees will also be used for the drought. With the further increase of sales tax the drought was once again said to be the main reason for the increase. This amounts to a further R800 million. In other words, out of the total of R1 525 million the largest portion should be used for drought aid. I must tell you that the general public is under the impression that that money goes to the farmers free of charge, not as a loan, but as a gift. The hon member for Albany is one of those who is under that impression.

No.

Despite what the interpreter of his speech on my right says, that hon member said that if the farmers have a harvest, they get the benefit of it and if they do not have a harvest, in other words, when they have finished gambling, and it is a failure, the State has to foot he bill. [Interjections.] The State has to foot the bill, but the farmers have to repay those things. Do you want to tell me that there is not one farmer who did not incur a loss this year? Of course they incurred a loss. Those hon members have contributed to creating a complete misapprehension in South Africa, since the general public is under the impression that these things are gifts being given to the farmers and they do not repay them. Now I am afraid that we are once again going to be disappointed. Each time GST has been presented as being the main cause an absolute minimum sum has gone for the drought. The question is where does they money go to? In yesterday’s Volksblad I read the following:

It is a loss of revenue for the State. It does not go to the farmers because there is a loss of revenue for the State. Someone from the North telephoned me this morning and said hat a report appeared on page 18 of today’s Beeld—I did not see it myself, I looked for it, but it is not here yet—in which Dr Stals of the Reserve Bank says that due to he drought the State had a loss of revenue of R1 500 million last year. In other words, if this recurs this year—it is going to be worse—it will be a minimum of R3 000 million. Now I want to say that the misapprehension that exists that the farmers are parasites which ride on the State’s back, is absolutely untrue, since when the farmers had a drought they did not receive gifts. According to Dr Stals the State loses R1 500 million per annum due to the drought. I therefore want to tell the hon the Minister today that he must stand up in this Vote on Agriculture and tell he country how much of the sales tax will be used for loans to the farmers so that that picture can be rectified. The farmers are not being given a gift and nor will it be the lion’s share of this R1 525 million. It is going to be a minimal share.

And interest subsidies.

Interest subsidies as well, of course I want to associate myself with my colleague, the hon member for Barberton. During the discussion of the motion earlier this year in the Other Place, all parties accepted that due to rising costs and the crippling drought the farmers find themselves in dire financial straits and that extraordinary measures would have to be taken. There are in fact extraordinary circumstances. It has been confirmed by the hon the Minister that 28% of the security of the crop farmers in the drought-stricken areas has been utilized to the maximum. In other words, they have no security whatsoever and they cannot go and borrow money anywhere to go on with. Approximately the same percentage do not have sufficient security left to obtain production requirements. This is the crux of the problem. Now I want to say that no extraordinary measures have been announced yet so as to solve this problem. The measures that were announced are an extension of the existing measures. The interest on carry-over debt which is subsidized so that the farmers pay 8%, is something for which we are grateful. However, this does not solve the problem of these people, who do not have security.

What should we do?

I am now going to tell you what we should do, but I first just want to make another point. I say that this is not an extraordinary measure. Let us look at the Black farmers in the Black states and look at what the interest on carry-over debt is which they have to pay with the assistance of the Government. Secondly, interest on production loans has also been increased from 30% to 35%. Effectively this means that these people have to pay approximately 13%. This is not an extraordinary measure, since if one compares this with the interest the farmers in the Black states pay, one sees what an extraordinary measure is. The subsidy the Black farmers receive on fertilizer and seed constitutes extraordinary measures. However, extraordinary measures have not yet been announced here. Now the hon member is asking me what should be done to assist the people who do not have security. I want to ask the hon the Minister that the State should assist the co-operatives in this instance. If the State wants to keep those people in production, what will have to happen—since one cannot lose between 25% and 50% of the farmers in one year, since what would happen to the economy if all those farms had to come onto the market—is that it will have to provide guarantees so that those loans can be granted to those people without their security. That guarantee is not going to mean that the State will have to repay all that debt, since the bad debts of the farmers which they were unable to pay constitute less than 1% out of a total amount of R800 million. Even if it does rise to 10% so that they are unable to pay R80 million, the State can accept that responsibility to keep those people in production and not have them leave their farms under such unfavourable circumstances. I think the Government is misinformed about what the position on the farms really is. In a debate in the Other Place hon members said that the hon the Minister was applauded when he announced these relief measures. It is not true; it is simply not true.

The Minister was applauded.

The hon the Minister was not applauded. The farmers were devastated. For that hon member who is arguing with me now...

The farmers were very grateful.

The farmers were grateful for what they received, but he was not applauded, since it does not solve the problem of 50% of the farmers. Now I want to ask the hon member whether these relief measures that were announced are sufficient to save his farmers?

But we said the other day in the Other Place that there would still have to be additional aid.

You say that it is not sufficient. Of course it is not sufficient. Why are you arguing with me then? Why are you interrupting me?

Give us a plan.

I have just given you a plan. Do you accept this plan? He is shaking his head. In other words, he does not accept the plan. That hon member is not satisfied with the relief measures that have been announced, but according to him, the plan I am proposing that the Government should bear the responsibility together with the co-operatives and act as surety for losses without security cannot be implemented.

Without security?

Without security, since those people have no more security. Surely we have extraordinary circumstances now, and we all decided together that extraordinary measures were necessary. I am now pleading for an extraordinary measure [Interjections.]

Why are you including the co-operative? Why do you not say that the State should bear it?

Surely the money goes to the farmers through the cooperatives. That is why the State must now give the co-operatives a guarantee that if it cannot recover what has been loaned without security, the State will foot the bill. The co-operative is in fact going to recover more than 90% of it. There is going to be a small percentage which it is not going to recover. I am therefore pleading for the State to foot the bill for that amount which cannot be recovered. Thus far history has proved that the farmers could not pay less than 1% of their loans, but because matters are going further now, that small amount will be greater. Even if it becomes 10%, it is still only R80 million at the present figures.

Mr Chairman, it is clear that the hon ember for Barberton and the hon member for Lichtenburg are deliberately trying to prove today that the hon the Minister of Finance has left the farmers in the lurch in their hour of need. They know just as well as we do that that is not the case We know that they want to make political capital out of this matter and we forgive them for that. The record of the Government is absolutely exceptional if one compares it with circumstances which prevailed 50 years ago and a drought which lasted for a shorter period and with circumstances which were equal to these circumstances, economically. Circumstances 50 years ago sowed absolute chaos amongst the farmers in the respect that hardly a day went by when a farmer was not declared bankrupt or had to sell out because of bankruptcy. We are familiar with the history of this. The Government’s record at present is that after two or three years’ drought it is still standing by the farmers. You cannot show me one bankrupt sale in my district. Relief measures have been adjusted from time to time, and I predict that the Government will stand by the farmers in their hour of need on the road ahead. Hon members need not point out the importance of the farmers to the Government, but we forgive them for a little politicking on the matter.

I want to talk a little about another matter, however, and that is the red meat industry in South Africa, which is an important industry.

Grazing land constitutes more than 80% of the surface of the Republic of South Africa. Because these areas are unsuitable for planting crops or cultivation we find the red meat industry there, and one must reflect a little on what the position will be in the future and how we can keep this country self-sufficient in this field. The basis for the red meat industry in South Africa is grazing land, of course, as I have already said. It is a fact that the drought of the past few years has had a particularly detrimental effect on the red meat industry of the Republic. During the past few years there has been an alarming retrogression in natural grazing land in the Republic of South Africa. This is cause for concern. This has contributed to our having to consider certain problem areas in this industry. The producers of red meat are deeply indebted to the State for all the relief measures during this period, the purpose of which was to enable the stock farmer to survive and once again to have a core herd to go on with after the drought. I think we should concede that the Government has succeeded most admirably in its goal in this respect, since there are many of the farmers who have been supported for six or seven years and who have not been left in the lurch by the Government. This attempt to keep the farmer on his farm without deliberately taking heed of preserving the natural veld has damaged natural grazing alarmingly in the process. This is a fact. To insist at this stage on drastically reducing the number of stock in these circumstances would be a further blow to the fanners who find themselves in difficult circumstances at present. It is only fair to expect the farmers who apply for State aid in future to keep stock numbers within the prescribed grazing capacity of their farms. It is a declared policy, and the Government has already taken steps, for which we are grateful. Our country’s natural grazing constitutes 75 million ha and 75 different types of veld are to be found. This is the most important source of grazing for approximately 8,5 million cattle, 29,2 million sheep and 2,7 million goats. There is overwhelming evidence that large sections of the veld are poorly managed and are being over-grazed and therefore retrogressing.

At present critics are speaking about subsidized overgrazing which is being encouraged by the State because it is rendering assistance to the farmers to retain their stock under difficult circumstances. The misapprehension amongst many farmers that over-grazing pays makes it difficult to convince the farmers to reduce their number of stock. Most farmers overestimate the yielding capacity of their veld. We are all guilty of this. Stock on overloaded fields must be reduced. The only solution is to make management of the veld as advantageous and as economical as possible. The number of cattle on White farms reached a peak of 9,4 million in 1978. In the same year the number of sheep was 32 million. It is alarming to see that since the Soil Conservation Act was put into operation 36 years ago 10 000 cases of veld abuse have been identified, but only 35 people have been taken to court, of whom only 32 were found guilty. I am convinced that the carrying capacity of grazing land could be increased considerably without great cost if the veld is utilized correctly. Grazing is the cornerstone for the future supply of red meat to the population at reasonable prices. This veld grazing can be further supplemented by artificial pastures, hay silage and stock lick because cattle, sheep and goats are ruminants that can use the roughage. This must be the basis on which this is dealt with in the manufacturing of red meat. Today we say that feedlots are essential, but for quality meat the period the animal spends in the feedlot must be as short as possible.

The tremendous pressure for admission to controlled markets mean that excessive amounts of low grade meat enter the market and that at present there is a shortage of high quality meat. Consequently, it can be expected that the price of high grade meat will increase during the next three years and that in certain cases prices will even double. This will be one of the results of the present drought conditions.

There is a large potential market for red meat, but care must be taken that the price of red meat does not rise above the purchasing capacity of the population. The consumption of d meat has increased recently, but what is alarming is that the consumption of chicken during the same period increased from 3 000 tons per annum to 6 000 tons per annum. The read meat industry has been deteriorating markedly since 1975. As I have said, the price of beef could soar during the next three years. Consumption of red meat will be influenced by its price, of course. At present the price of red is almost twice as high as that of chicken. It is said that the objective in respect of the consumption of chicken will be a 40% share of the total meat market by the end of this century. In 1970 producers of chicken had a market share of only 12,3%. At present it is already 22%. In view of this it is not impossible that their objective will be achieved. That is why we must take special measures to stimulate the consumption of red meat. Ways of streamlining the marketing of red meat must be looked at. For example, the supply of top quality products and the improvement of service to the consumer must be looked at. We must decentralize factories. We must utilize the manure from the feedlots to bring about a saving in the cost of fertilizer. We must improve the existing outlets and more outlets must also be created. We must carry the savings which can be brought about in this way in respect of producer prices through to the consumer We must prevent monopolies in the meat industry. We must also make technical management services available to the farmers to an increasing extent.

We welcome the exemption of red meat from sales tax and we are grateful for the reduction in price and we hope that it will be possible to bring about further reductions for the consumer

Mr Chairman, I share many of the concerns which the hon member for Vryheid has. The deterioration in our natural grazing is indeed a very serious problem with which we are faced. I am also concerned about the very few prosecutions that have taken place under the Soil Conservation Act. We have the legislation available such as for instance the Agricultural Resources Act that was passed earlier this session, and this should therefore be applied in order to prevent this deterioration. I also agree to a certain extent with what the hon member said about the problems in which the red meat industry finds itself. The hon member for Wynberg will deal with this tomorrow, but I want to say now that we believe that a lot of the problems in which they find themselves can be attributed to the way in which the industry has been handled by the control board which has been entrusted with the affairs of this industry.

I should like to welcome the comments the hon the Minister made last night and also this morning regarding an investigation by the National Marketing Council into the operation of a few of the control schemes, namely the maize scheme, the dairy scheme and the meat scheme. Incidentally, these are the three schemes that worry us on this side of the House the most. In this debate we will be referring specifically to the maize scheme and also the meat scheme. We welcome the investigation and look forward to seeing what the outcome will be.

I should like to turn very briefly to what my colleague, the hon member for Albany, said today with regard to the Marketing Act. I should like to emphasize again that the objections he voiced relate to the one-channel fixed-price scheme. We have no problems with many of the other schemes under the Act, but our most serious problem relates to this scheme, particularly because it is the scheme under which maize is administered and, of course, maize is by far our most important agricultural product.

I do not want to give an economics lecture today, but I want to speak briefly about our price system. It is prices which allocate resources. It is prices which tell people how much to produce, it is prices which tell people that they should be cutting back or producing more. But what happens? We come along and fix a price. As soon as we have fixed a price the price system cannot perform this function anymore. It cannot signal to farmers that they should be producing more maize or less maize, that they should be allocating more or less resources to the production of a given product. We are completely destroying that function of the price system. What we are pleading for is not necessarily that the one-channel fixed-price system should be thrown open completely to the free market, but only for a little bit more flexibility. When there is big crop prices should be able to go down to a certain extent. We can set a floor price. We are in favour of a floor price system. It is not beyond the wits of the economists that we have in the agricultural industry to set a floor price. They can set it very much according to the criteria the Minister applies when he sets a fixed price. At our universities we have some very well qualified and very good agricultural economists. Let me mention a few by name. We have Prof Kassier at Stellenbosch, Prof Groenewald at Pretoria and Prof Nieuwoudt at Natal. Incidentally, none of these men are supporters of my party—I see the hon the Minister is smiling—but they are highly regarded in their fields and are good agricultural economists. Here we have some very good men, but whether they are ever consulted about agricultural policy I do not know. I read in a paper the other day that they are forming some unit to try and make their feelings better known. The hon the Minister of Finance claims that he has the best economists in the country advising him on fiscal policy and I believe that the hon the Minister of Agriculture could make better use of some of South Africa’s best economists too. There is some very good expertise available outside his own department. When I say that, I do not wish to cast any reflection on people within his department.

We have in the past suggested that we investigate the futures market. I have asked the hon the Minister about this and I do not wish to go into detail again. I am not talking about operating on the system which exists in the United States. I am talking about establishing our own futures market here in South Africa. It will have a lot of advantages. For example, the farmer can contract to sell his goods before he produces them, which is what any producer wants. If he knows in advance what price he will get, he can of course decide whether he will produce or not. Traders can buy in advance and hedge their purchases. The futures market need not necessarily operate for maize only. It can operate for all grains. In fact, any product that can be stored can benefit by such a scheme. Its prices could be very usefully set on such a futures market. You can offset contracts on the futures market. You can for instance offset futures purchases for maize with a futures sale of any product.

What about the volume of our products?

The hon the Minister mentions the problem of the volume of our products. He has a very good point in this regard. What we have asked in the past is not that he should go out and just do it. I think that would be crazy. However, it would be very interesting to have a proper feasibility study done in this regard. It might solve a lot of the hon the Minister’s problems. I am sure he could find somebody somewhere who he could allocate this task to.

The rest of my speech today will be somewhat of a mixed grill because there are a number of things I should like to raise.

As regards the maize industry, we are pleased to see that the fertilizer industry is being decontrolled to a certain extent. I am pleased to see there will also be a bit of competition for ADE and that Deutz have been allowed to begin production. We still believe that the whole weed-killer industry needs to be investigated because prices of these products are very much higher than the landed prices of overseas products. We, like anybody else, would like to see our maize industry out on a competitive footing with overseas producers. I should like to know whether the hon the Minister has given any thought to the establishment of an export facility for ai e at Richards Bay. I believe this would make the industry more competitive because transport costs would be lower.

Something that has already been mentioned in the past by the hon member for Albany is the question of tax as it relates to farmers. One aspect of our present tax system is that farmers are encouraged each year to go out and purchase equipment and effect capital improvements which they do not really need but do in order to avoid tax. Would it not be possible to allow them to invest surplus funds with for instance the Land Bank and when they then withdraw that money it can be treated as income? This would prevent farmers from spending enormous sums on items they do not need.

What also concerns us is the number of people who are buying farmland for non-farming purposes. Lots of businessmen in towns buy farms in order to take advantage of the tax benefit which they can get out of farming. They can offset income from the one business against improvements on their farms. It means that at a later stage they can reap enormous capital profits. It also to a certain extent pushes up land prices. I would be interested in hearing whether the hon the Minister has any comments in this regard.

Are you in favour of capital gains tax?

If the hon the Deputy Minister is asking me personally, I would say that I am in favour of a land tax, but that is not the policy of my party. It is my personal opinion.

There is one other issue I should like to mention. This is the question of rural development. We are very much in favour of encouraging rural development and believe that in the past some policies very much militated against rural development. Let me mention one example, namely railage rates. [Time expired.]

Mr Chairman, the hon member and I have been discussing the Marketing Act since last night. The hon member asks many interesting questions. One can, of course ask many questions about a very complex matter. Let me tell the hon member right now that to answer these questions satisfactorily one would, for example, have to study at some considerable length, the issue of the futures market or “verkansingsmark”. I responded immediately and told him that if one wanted to develop such a market in South Africa, one would also be doing so for the purpose of competing on the international market because, after all, for a wide range of products we are an export country.

Let us simply look at the quantities of maize alone. In America, following the abolition of the “Pik” programme, the “payment in kind” programme, they expect on the basis of what has been sown—as I learned last night—to be able to produce a standard crop of over 200 million tons of maize. And I make no reference whatsoever to wheat, of which there are as many millions of tons. The USA handles 60 per cent of the world’s grain exports and has a similar market, but one would have to look at the possibilities inherent in such a market. Off the cuff, this would appear to me to be very complicated and difficult.

We have a smaller stock exchange here and...

Well, then perhaps for the local market, but we would have to look into this. At this stage it poses something of a problem.

During the course of the debate tomorrow I should like to respond a number of the hon members’ statements and questions. At this stage, however, I feel that I should nevertheless reply to some of the speeches, with special regard to those concerning that 28 per cent of the farmers about whom we are all concerned. The hon members for Barberton and Lichtenburg have both referred to this. Before I deal with this problem, I just want to make one remark. I want to do so in all sincerity and amicability.

I accept that the hon member for Lichtenburg is a responsible politician. In South Africa we must not make the mistake of drawing a comparison between Black and White agriculture because structurally there is a world of difference, over and above the economic differences, levels of development, etc. I do not think it is right to compare these two agricultural sectors, these agricultural communities, to each other in agricultural circles, because they are not comparable.

I should like to get down to the problem. A few weeks ago, after having carried out certain investigations into the drought, and with the concurrence of the Government we realized that the situation had developed to such an extent that we would have to announce certain drought relief measures as soon as possible in order to bring stability, restore calm, to the land market, amongst other things to prevent untimely excussions and to prevent the farmers’ security being prejudiced, for if the farmers’ security, his land and fixed property, were to be prejudiced, the entire basis of financing, the whole process of relief measures, would collapse. A vote of thanks was extended to the Government in this series of meetings, something for which I am grateful, and criticism has also been voiced. I accepted the accusations and the kinds words; I accepted it all. The Government and I do not constantly expect to be praised or patted on the back for our drought relief measures. I do not expect it. But what did we find to be a most salient feature of this entire series of meetings? Firstly there was the difference between the interest rates for co-operative financing and bank financing. The interest rates for bank financing are tremendously high. I think that at that stage, when we were having that series of meetings, the prime rate was again increased by one per cent.

The Jacobs Committee has been instructed to establish to what extent the clearing banks can be involved in agricultural financing, subsidized financing. We know, however, that it is an involved process because usually farmers have only one account. All the farmers’ expenses, household expenses, the chemist’s bill and the grocery bill, are paid from that specific account. It is therefore difficult to divide up the financing into that relating to means of production and that relating to private expenditure. Despite this the Jacobs Committee has—this committee is doing exceptionally good work—with positive co-operation and the development of a good team spirit, succeeded in obtaining certain statistics from the banks. Secondly it has also succeeded in eliciting the sympathy and co-operation of the banking community in South Africa, because they also are involved in this drought situation and also have large amounts outstanding as a result of the drought. We have now reached the stage where, with the concurrence of the Minister of Finance, we shall shortly be having discussions with some of the clearing banks to see if we cannot make some arrangement, on an administrative basis, in terms of which they can make provision, in their system, for keeping specific accounts with regard to the farmers’ production expenditure. Of course it is not possible, at this stage, for me to say to what extent we shall succeed, but I do just want to make the point that we are making an effort to obtain positive co-operation from the clearing banks and are succeeding. Many of the clearing banks, in fact the majority of them, have a particularly responsible attitude towards the state of affairs in agriculture.

The hon members also discussed another aspect. Owing to the continually increasing carry-over debt resulting from consecutive crop failures, a situation has developed in which the security of the agricultural co-operatives is being threatened. The co-operatives’ usual method of financing, in terms of the Co-operatives Act, is to base the financing of the farmer on the fact that the co-operative holds a lien on his crop. The Land Bank also accepts this as additional security when arranging cash credit accounts. A cooperative has a production record for each member and usually finances the member accordingly. I think this is sound, normal business practice or, to put it differently, the farmer’s operational achievements are taken into account.

I agree.

I see the hon member agrees with me. This is how things developed in the normal course of events. It included, amongst others, farmers who owned fixed property and also tenant farmers. An hon member spoke here of the position of the tenant farmer and farmers who did not own fixed property. I know of farmers in agriculture who do not own any land, but who are excellent farmers, to judge from their production capacity, their technical knowledge of certain products and the record of their agricultural output that they have established with the co-operatives. When the first drought struck, the Land Bank came up with a fantastic scheme—the 22-year consolidation scheme. The farmers made use of this. The first consolidation drive involved an amount of R500 million. This flow of capital, however, was not directed mainly at the co-operatives. The cooperatives received approximately R200 million. The additional funds were used mainly for the consolidation of incidental debts such as those incurred through hire-purchase agreements for tractors, the rent they must pay for farms if they are tenant farmers, accounts which must be paid at banks and money owed to smaller creditors. It is the smaller creditor who creates problems. A fairly substantial farmer could quite possibly be excused as a result of a few rand he owes somewhere or other. The first step in this process is to get these people out of the picture as far as possible, because if the one latches on, the whole bunch will latch on. This was subsequently done.

At the same time, as the drought continued, the co-operatives accepted additional security, apart from taking the person’s production record into account. Later on the cooperatives had recourse to their members’ interest funds. This is where we have problems with the younger farmers. Over the years the older farmers established sound members’ interest funds for themselves, in other words, in conjunction with his production record this at least enabled them to furnish the co-operative with adequate security. At that stage it was not yet a problem. But as circumstances developed, the co-operatives were eventually obliged to register mortgage bonds on the farmers’ land as well. While the Land Bank’s process of consolidation was in progress, the co-operatives consequently had to scale down their mortgages to the level of second and third mortgages. And then the drought struck again this year. Then many co-operatives told us that a certain percentage of farmers—some co-operatives say up to 60% of their farmers—are no longer creditworthy. They are not insolvent, but their position is becoming so precarious that under these circumstances the co-operatives cannot provide them with any further credit.

The Co-operative Board of the South African Agricultural Union was subsequently to conduct an intensive survey. They conducted such a survey and submitted the results to me last week. From the discussions we held I obtained the statitics—I think it was from 20 or 25 of the co-operatives, chiefly in the crop-farming areas—that 28% of these 7 000 farmers are a credit risk. The disappearance of 7 000 farmers from the summer grain areas would not only be a blow to agriculture in South Africa, but also to the White community in the rural areas.

Now let me immediately say that for the second consolidation scheme, that is to say the one starting on 1 March this year and ending on 31 March next year, the Land Bank estimates that it will have to make available a further R300 million for consolidation. Therefore the Land Bank will have made a total of R800 million available. The State guarantees these Land Bank loans. This is particularly important because as you have heard, this year the Land Bank again had recourse to the money-market, and as a result of the confidence in the Land Bank, owing to the State guarantee, the loan was, to the best of my knowledge, fully subscribed within a few hours. In other words, the Land Bank is in a position to obtain enough money on the money-market, but the problem arose with regard to the nature of the guarantee. The guarantee is given to the agricultural co-operatives. Another problem however, is, that in regard to the Land Bank/co-operative relationship there was some or other discrepancy in the condition of this guarantee. We have now reached the stage of having changed the guarantee in such a way that the co-operatives can now certainly take the risk of financing this 28% of the farmers to that they again sow their crops next year. Let me immediately add that as is to be expected the Land Bank laid down certain supplementary conditions to this guarantee, namely that this also be subject to the Land Bank reaching agreement with the relevant co-operatives about the formulation of an explicit credit and debt collection policy and the Land Bank regularly monitoring the implementation of the abovementioned policy for the purpose of satisfying itself that the relevant co-operatives strictly adhere to the policy. The co-operatives agreed to this, and this means therefore, that from time to time the Land Bank is likely to request to see the records relating to its financing policy.

For the first time in South Africa’s history, as a result of the tremendous carry-over debt and the impact that has had, not only on the security of the co-operatives, but also that of the farmers, in the co-operative industry one will now also have a category of farmer who will prove a bigger risk. The co-operatives rightly argue that if there is an excussion—I am reluctant to use this ugly word—and assets have to be converted to cash, there is the possibility, according to the conditions laid down, that in the process the co-operatives could proceed to convert the assets of these high-risk farmers into cash. We can only hope that it rains next year and that things improve. To prevent the total assets, members’ interest funds and reserves of other farmers who are members of co-operatives being prejudiced—a co-operative does not function in the same way as a private company—the co-operatives agreed and are happy to have this 28 per cent of the farmers financed by way of a 35 per cent subsidy, as is the case with other farmers. One can only hope that the rainfall and climate will be favourable. I am speaking of well-to-do farmers, because this 28% of the farmers have been carefully selected by the co-operatives. They are not farmers with a poor production capacity; their production record is sound. Their problem is just that circumstances have placed them in such a situation. Co-operatives have informed me—naturally there will be exceptions—that with normal harvests they believe that this 28 per cent of the farmers could also recover. I very much wanted to make this announcement in the light of the fact that hon members referred to this matter.

Mr Chairman, I do not think there is anyone who will differ with the hon the Minister when he expresses the hope and confidence that the coming season will be good and fat seasons. As the hon member for Bezuidenhout said, we are all praying for rain. There is one thing that has not yet been exhausted in South Africa, and that is the optimism of the farmer that the next season will be a good season.

I listened with interest to the hon the Minister’s introductory speech. It was to be expected that he would deal with the White Paper, and he did so by way of summary. However, I should have preferred to hear him discuss the present crisis in agriculture—he has just raised the matter—and in particular I should have liked him to give us a broader indication of he plans. I say this merely by way of introduction, because I want to come back to this shortly.

I believe that we in South Africa very urgently need guidelines as to what our plans are, not only in respect of agriculture in general and in the long term, but also, as I said on a previous occasion, in regard to recovery after the drought. In my part of the world the late rains brought relief but not to the extent of solving the problem entirely. Some of the dams are still empty or have very little water. There are still farms, particularly those behind the Soutpansberg, where grass has not yet grown and where the grazing is still sparse.

I want to refer in all friendliness to the hon member for Ceres. He said that the drought aid was sufficient. I cannot remain silent about this, because if I were to do so it would mean that I agreed with him, and I am unable to do so. I do not think that one of us knows at present what is available for drought aid. My colleague, the hon member for Lichtenburg, discussed that. One way of calculating it, is to add all the different amounts together. There is another way to approach this. It has been said that provision will be made for drought aid out of the surplus of R125 million. However, if additional taxes are again being imposed, this means that there is no longer a surplus of R125 million that can be earmarked for drought aid. However, I leave the matter at that.

I should now like to come back to the White Paper. I read the White Paper with interest. If it had appeared two years later, it would have been the first White Paper on the subject in 40 years. It is a very synoptic document, that deals in generalities to a large extent. Particularly after 40 years, what I look for in the White Paper is more specific treatment of certain subjects and projections as to how certain matters will be dealt with. In this regard I could use the example of the drought. I think that we in South Africa are already in the position of being able to say with certainty that droughts do not take place sporadically in South Africa, but are seasonal. I am not referring now to the few fortunate areas in South Africa such as that of the hon member for Caledon which have virtually never experienced a drought. I am speaking in general terms. Droughts are not sporadic, and it is evident, with reference to articles on the subject, that meteorologists and other students of the elements and the climate are getting closer to being able to project meteorological trends more accurately. I think that one of the finest examples of the projection of a meteorological tendency that we have ever had was Pharaoh’s dream. Fortunately there was a Joseph who could tell him that he had to start carrying out contingency planning, because lean years lay ahead. I think that we in South Africa must reach the point at which we must tell one another that contingency planning for drought periods is essential.

It is impossible.

The hon the Minister says it is impossible. During the fat times in South Africa we have a surplus, and in my opinion feeds are utilized uneconomically. Sometimes that feed is totally wasted. I know what the hon the Minister is going to say in reply to this, viz that there are problems with regard to storage space, costs and so on, but I think that we should at least begin to consider contingency planning for drought seasons. I think that the stockpiling and preservation of stockfeed, and not only stockfeed but also human foodstuffs, are matters which must be considered. I do not say that we must begin to do this now, but that it should be considered. At the time of the previous drought we all said that we had learned our lesson. We were to begin to discipline ourselves with regard to the overgrazing of land, etc, but we did not do so because after that there were good rains and we very soon forgot about that drought. This is another characteristic of our people, viz that we quickly forget about the hard times. We quickly forget about how dry it was. A year very soon becomes one of the driest years we have ever had, and another becomes one of the best years we have ever had.

I want to refer to another aspect of the White Paper. The third production goal to which reference is made on page 6 is one of the most important points as far as I am concerned, viz the pursuit of a maximum number of well-trained and financially sound owner-occupant farmers. With regard to this goal the following, inter alia, is said:

I think that this is one of the truest statements made in the entire White Paper. I want to refer briefly to the aspect of State security in this connection. What is said here, is that we want to occupy the rural areas. We also want to occupy the rural areas because we see the farmer as a component of State security. One farmer, by his presence, performs a strategic role with regard to State security. The closer that farmer lives to the border, or if he is in a sparsely populated part of the country, the greater is the strategic role he plays. In consequence we must ask ourselves how we are going to get him there and how we are going to keep him there. Time does not permit me to discuss this at great length. As regards the question of how to get him there, it is nowadays a question of how attractive the farming industry can be made for beginner farmers.

[Inaudible.]

Precisely. As soon as there is an incentive, land prices rise. Purely as a result of the long distances, the position of farmers who are already in remote areas is less favourable than that of farmers situated closer to the marketing and supply point. As far as these two aspects are concerned, the farmer in remote areas has a heavier burden to bear. If tariffs rise, he has a heavier burden to bear. If costs rise, then his costs rise more. If he has to market from a distance and at a higher tariff, he gets less out of what he markets than farmers situated closer to the marketing point. [Time expired.]

Mr Chairman, I move:

Agreed to.