Mr Chairman, right at the outset I wish to associate myself with those who congratulated the hon the Minister and the hon the Deputy Minister on the White Paper. I also want to extend these words of congratulation to the officials who compiled it. I think it is an excellent piece of work and I think it creates the basis for the agricultural policy of the future and that it creates a basis in terms of which we can solve certain problems. I find it striking that those who criticize it do not really come forward with alternatives that they would have liked it to contain and I take this amiss of them.

The subject I want to discuss today concerns a completely different field. It is also contained in the White Paper, and I want to speak in particular about future planning in respect of our resources in this country, and more specifically the resources of the extensive parts, the grazing areas, ie a large section of our country, since the greater part of our country falls into this category. The question that comes to mind regarding these resources is whether they need any protection at all, since perhaps the farmers are looking after them well. I went and had a look at the old reports and what I saw in them upset me in a certain respect. Today I want to state that the natural resources of this country, and particularly those in the extensive gazing areas are in an alarmingly poor state and this poor state is not only the result of the recent drought or the farming conditions of the past ten years. This has a long history, Mr Chairman. If one looks at the old reports one comes across a few interesting data. In 1825, after a visit to the pioneer farmers, Mr Stockenstroom said that the farmers were keeping more stock than the farms could cope with. In 1914 the Senate appointed a select committee to investigate the drought conditions and in this report they said, and I quote:

They then went on to say the following:

That was in 1914. In 1923 there was again a commission of inquiry in to the drought and they reached the following conclusion:

This commission warned that South Africa could turn into an uninhabitable desert if nothing were done about this. Only in 1946 was legislation in the form of the Soil Conservation Act introduced and did the department and the farmers begin to do something about it. In 1967 the present Director-General of Agriculture, Dr Immelman, issued a statement in which he said that this Act was not serving its purpose. It was not really preventing the deterioration of our resources. In 1973 satellite photographs began appearing on which one could see the change in the vegetation in the country and we find a very interesting phenomenon. We find that desert encroachment has increased by 70 km in 20 years, in other words, by 3,5 km per annum. In 1978 Dr Roux from Grootfontein said that we must draw a distinction between desert encroachment, which is a natural process that takes place gradully, and desert encroachment due to the incorrect utilization of natural resources, which is a rapid process. In 1980 the Baard Committee declared—and Dr Baard is the present Director of the Division of Soil Protection—that despite large physical and financial inputs from both the State and landowners, optimum utilization of the soil is not going well. The White Paper has appeared in 1984 and it states, firstly, that soil losses are alarmingly high and, secondly, that natural grazing is showing an alarming deterioration. Hon members can look at the first page of this White Paper. Let the statement I made at the outset to the effect that our natural grazing has been exploited to a critical point due to overgrazing and incorrect grazing suffice. Everyone agrees with this. In the document in which they spell out their policy, the South African Agricultural Union states that it is essential that something be done about this. They say that the preservation of natural resources must be given high priority so as to implement drought relief involving preventive and disciplinary principles. Consequently, this means that preventive and disciplinary principles must be built in before assistance is rendered. There are other voices in agriculture that go even further and say that the Soil Conservation Act must be strictly implemented and that those who infringe it must be seen as criminal offenders and be prosecuted as such. These are harsh but serious words. I do not think this is an easy problem to solve, and I think it is something which we will have to look at in the future. Firstly, if we are to solve this problem the farmer himself will have to change his attitude. There will have to be a drastic change in their approach to the utilization of the veld. Too many farmers regard freehold or the ownership of a title deed as a right to do just as they please on that land and as a right to maintain a certain level of life on that land, regardless of whether or not that land can sustain it. They claim that that land owes them something. I think this is an incorrect standpoint that has taken root and we therefore see that in terms of this farmers are beginning to lose their self-respect to an increasing extent and ask for assistance. It is a fact that, through our own fault, we have almost no assistance left to give in agriculture today. I therefore want to state that freehold, or right of possession, is not a right of disposal. As long as the natural resources of this country are well looked after one can do what one likes with them, but the moment those resources are endangered, it does not only affect that person or owner, but the country as a whole and then the State, or the Government, or whoever must implement remedial measures. I think we have reached the point when a turning point is going to be reached within the next 20 years. Either we are going to have better resources in nature in the future, or we are not going to have them. If I look at this, and I look at my own area—and we are listed in phase five—I see that a trend has developed and that despite phase three, four and five assistance—and this is in areas listed as so-called drought areas—there are more sheep on that land than the prescribed carrying capacity recommended for those areas. There are more sheep in the drought-stricken areas than there should be. Mr Chairman, this cannot continue. How are we going to solve this problem? As far as I am concerned, there is only one way in which to do so and this is made possible by the Conservation of Agricultural Resources Act which makes provision for establishing conservation committees. People from the ranks of the farming community who are appointed by the South African Agricultural Union or organized agriculture serve on these committees. Then there are also people who are appointed by the ministry who can co-operate and who are familiar with local conditions. These are people who can evaluate the potential of the area and who can then make a recommendation on a farm-to-farm basis. Farming in that area must then take place on the basis of these recommendations. I request that those committees be instituted as soon as possible and that the people who are appointed to those committees be well remunerated and that those people be given the powers to do the work they have to do. This is essential, since if we do not do so, we are going to encounter tremendous problems on the road ahead. Vast sums of money have been poured into agriculture recently and in a certain respect this has made us less dependent on our own ability. We did not try to solve the problems ourselves. As an hon member has said, we tried to pass the risk on to the State. This is a dangerous trend if we have to forfeit our pride in this regard.

I wish to conclude with a plea that this attempt we are envisaging should take place soon and if we do not do so in this regard we will eventually be living in that desert referred to by previous reports.

Mr Chairman, I take pleasure in speaking after the hon member for Prieska and I thank him for a constructive contribution. I should like to say a word about the speech the hon member for Lichtenburg made here yesterday afternoon. I see that he is not present this afternoon, but in his absence I want to say that I think we as agriculturalists can do the farmers of South Africa a big favour in the future if we could succeed in keeping the agricultural debate out of the political arena. I want to ask him to reconsider this and not to make the same mistake in future debates by using the arguments he advanced here yesterday afternoon. The whole spirit in which he made that speech was to put a political spark into this debate. I want to ask him, in the interests of agriculture in South Africa, as well as in the interests of our farmers to keep politics out of agriculture.

I should like to devote my speech to regional development and in the second half of my speech I also want to say a word about agricultural credit. On page 10 of the White Paper reference is made to the contribution agriculture is making to regional development. The economic and social infrastructure in the rural areas arose mainly out of agriculture. It was our farmers who made the rural areas inhabitable and cultivable. Agriculture was therefore the basis of present rural development and as the White Paper rightly remarks, the extent and quality of natural resources place limitations on agricultural development. Only a certain number of entrepreneurs can be accommodated economically in agriculture. There is therefore a saturation point. It is true that the present economic climate is decreasing, and not increasing, the number of farmers in the rural areas. Consequently, fewer people have to keep the economic and social infrastructure going in the rural areas. I believe that the farmer with his industry, which is a primary industry, will not be capable of doing so alone, and consequently I ask the Government to provide assistance in the same way as assistance was rendered to industrialists in the eight regions as publicized during the Good Hope Conference. Nowadays every farmer is an entrepreneur and many farmers are attempting to run their farming enterprise as a business. Since they provide employment for approximately 1,3 million Black people and are engaged in one of the most strategic components of our economy, viz the provision of food, I cannot see why they should not be considered for certain decentralization benefits. Decentralization assistance that could be considered to encourage the farmer to play a greater role in respect of rural and regional development could be the following, for example: Cash incentives for creating new employment opportunities, transport rebates, making electricity available at reasonable tariffs—which is extremely important, particularly in my area and in the north western Transvaal—the development of irrigation and more assistance in respect of the provision of housing and the training of Black workers. I intimated earlier that our farmers are not on the increase, but are becoming fewer, and consequently, consideration will have to be given, to establishing secondary industries, apart from agriculture, that can process primary products in the rural areas. This will indirectly contribute to regional development and the stimulation of the rural community concerned. The two co-operatives operating in my constituency, viz North Western Co-operative and South Western Co-operative, have already done pioneer work in this field, and our hon Minister opened a feed factory at Lichtenburg last week or the week before. These co-operatives are going to have an uphill battle, however, if they have to continue to compete with the industrialists who receive State aid. I therefore want to make a plea by concurring with the White Paper that this matter should be given high priority. If more secondary industries involved in the processing of agricultural products can be established in the rural areas this would contribute to keeping the socio-economics activities of every rural community and town going. Agriculture also makes an input to the newly established regional development advisory committees, known as the RDACS for short. In my opinion, the representation on these committees is not sufficient. If in future we want agriculture to make a greater contribution in respect of regional development, we shall have to give the farmers, and the cooperatives in particular, greater representation on those regional development committees.

I should also like to avail myself of this opportunity to refer briefly to the Division of Financial Aid. Many of the drought relief measures that have been announced are regulated by the agricultural credit committees and channelled to Pretoria. I have ascertained that at present there are approximately 310 such agricultural credit committees on which approximately 930 farmers serve. These people, as well as the magistrates, render an unselfish service and I want to thank them today and ask the hon the Deputy Minister whether it is not possible, since these people are rendering voluntary service and are compensated in a way for valuations and travelling expenses, to make an adjustment of 12% to the amounts paid out to them. They are not asking for this, but I know that they make great sacrifices, and that is why I am pleading for this.

The Division of Financial Aid has a comprehensive task. More than 4 000 people have applied for drought relief. All this work was done by a small group of officials who worked day and night. According to my information, there are 250 authorized posts in the establishment of the Division of Financial Aid, of which 62 are vacant. Of the posts that have been filled, a large percentage have not been suitably filled, and at present the division is making use of the services of 32 flexitime workers in order to keep the work situation under control as far as possible. People are continually working overtime and they have even worked on certain Sundays. I want to thank the officials who are performing this tremendous task most sincerely.

I want to put it to the hon the Deputy an Minister that abnormal situation has arisen with the drought and that abnormal relief measures have been introduced. We cannot continue to burden these officials any further with this. I am afraid that we could lose some of these officials as a result of the additional burden. I want to ask the hon the Deputy Minister to consider obtaining Defence Force personnel in order to alleviate the pressure on the department. Hon members will agree that at present it is impossible to deal with the situation meaningfully. I understand that such a request for assistance from the Defence Force has to be addressed via the hon the Minister of Manpower. I therefore want to plead earnestly with the hon the Deputy Minister to see to it that assistance is obtained from those quarters.

The Agricultural Credit Board, consisting of a chairman, a deputy chairman and 10 members, is in charge of the Division of Agricultural Credit. These people also render a tremendous service and are well equipped financially. Could the conditions of service of these people not be looked at? If posts were to become vacant I would like to see only the best people involved with this board in future.

There is one other request I wish to address to the hon the Minister. The working committee of the South African Agricultural Union has addressed a request concerning the wages of Blacks to the Government. There are farmers who have problems in paying the monthly wages to their Black employees. The hon the Minister has already made certain announcements with regard to drought relief. Possibly he could tell us later whether there is something in the pipeline in respect of the wages of Blacks and what the details would be.

A considerable amount of grass has been imported to my constituency from the Eastern Transvaal, and I want to thank the farmers of the Eastern Transvaal on behalf of the farmers in my constituency. The hon member for Standerton says that it comes from his constituency. Our farmers are utilizing that grass and this is contributing to retaining core herds in the Western Transvaal. I shall therefore like to thank those farmers.

Mr Chairman, I shall not reply to what the hon member for Schweizer-Reneke had to say since I believe that the hon the Minister will furnish him with a satisfactory answer.

I want to congratulate the hon member for Prieska wholeheartedly on his speech and express the hope that the hon the Minister will take note of what the hon member had to say.

As has been noted on this side of the House, the White Paper on the agricultural policy of the RSA is interesting in many respects, but deficient in others. It is specifically with regard to the policy on soil conservation I find it a great disappointment. I believe that the White Paper does not convey dramatically to South Africa and the Government the message as to what is going on at present with regard to soil conservation in South Africa.

Despite all the efforts made in the past, approximately 400 million tons of top soil is still being washed into the sea every year. It is calculated that South Africa has already lost more than 35% of its topsoil and that there are certain areas where the figure is as high as 80%. In these circumstances the White Paper ought to have devoted far more attention to this problem and it ought to have spelt out the implications in a far more dramatic way. The hon member quoted from the White Paper as follows:

The statistics indicate that soil erosion in South Africa is increasing rather than declining. As the hon member remarked, natural grazing is deteriorating to a disturbing extent and this gives rise to various forms of erosion.

In the White Paper the following is said about agriculture, and I quote:

This ought to be the most important and primary aim of agriculture. Very often this is not the case.

On page 12 of the White Paper the following appears, and I quote:

I want to place special emphasis on the last part of this sentence. For the rest this is stated mildly. I quote:

I do not believe that this is stated with sufficient “toughness”. I do not believe that the Government will even take effective action on the basis of these findings. Nor do I believe that South Africa fully realizes what the disastrous implications for our future will be if really effective action is not taken. The Government has received warnings over the years, even from its own officials. People have sounded warnings in the strongest terms, inter alia, Mr J P der Merwe, the former Director of Soil Conservation. At this point I cannot quote everything that he said in a letter. [Interjections.] It is an old letter, but the message simply does not get through to the Government, and they do not listen and take note. Shortly after he retired, he referred to a number of matters. He said:

He went on:

I mention this because the same problem is arising in the rural areas today. The competition between the National Party on the hand and the CP on the other will hamper soil conservation efforts in South Africa.

Oh, nonsense.

It is so, because politicians are primarily interested in votes. [Interjections.] The broader and higher interests of South Africa will suffer as a result. I appeal to the Government and to all political parties involved to appreciate that it would be beneficial to remove the question of soil conservation from the political arena so that everyone can contribute and put their shoulders to the wheel in an effort to solve the problem.

Mr Van der Merwe also said the following, and I quote:

I now want to refer to two brief paragraphs in the latest report of the department. They read as follows:

This language attests to dissatisfaction, and officials who feel that they are unable to take effective action with regard to soil conservation.

Another director of the Soil Conservation Division, Dr Serfontein, expressed himself as follows:

I want to emphasize that the primary principles are not being complied with. It is pointless the Government denying that its efforts with regard to soil conservation have been a total failure to date, since there is evidence to show that they have been. My appeal to the Government is to set to work in this regard and to enforce effectively the provisions of this legislation, and to take action and do something about the problem. If the legislation is not effective it must be amended. The Government cannot stand idly by and watch the whole of South Africa being washed into the sea. It is estimated that to date, 35% of our topsoil has already been washed into the sea How much remains? The Government stands idly by while this is happening.

This is not a question of the political survival of the National Party, the CP or any other political party; it is a question of the survival of South Africa. It is a question of the survival of our country and its people, and I believe that the Government must do something effective in this regard now.

The problem in the national states is extremely urgent. I drove through Gazankulu recently and saw how the topsoil, in parts which until recently were green and lush with no soil erosion, had simply been washed away, so that now there only bare stones and sandy river beds.

Surely you have access to Buthelezi; why do you not ask him to do something?

I am referring to Gazankulu. The Government has a responsibility in regard to these states as well. [Time expired.]

Mr Chairman, tHe hon member who has just resumed his seat has made me so excited that I have no choice but to participate in the debate at this stage. I shall reply to certain statements the hon member made, but I first want to get some order into my replies and I shall therefore start at the beginning.

Firstly, I want to refer to the remarks of the hon member for Ceres who made a very responsible, excellent speech yesterday. We want to congratulate him on it. He made a speech befitting a true leader and that is no wonder, since he is a leader, not only of the NP group in this House, but also outside this House. He raised one specific matter to which I want to reply briefly. Since my time is very limited, hon members must pardon me for perhaps not replying to all the details of their speeches to which I ought to reply. I shall be as quick as I possibly can.

The hon member for Ceres spoke about the training of our farmers. I want to tell you that this is a matter of the utmost importance to us. When we speak of economic guidance and proper planning, I can say that we cannot fulfil this if our farmers are not properly trained and if they cannot understand and implement the programmes. It is therefore a particularly high priority to us that we provide our farmers with as much training as possible. I recently obtained statistics concerning the average academic level of our farmers; this is something I do not want to repeat here now, except to say that there is a great deal of room for improvement. However, I should like to bring to the Committee’s attention the fact that we have not been sitting still recently; we have made considerable progress in the training of our young farmers in particular at the agricultural colleges at Elsenburg, Potchefstroom, Cedara and Nelspruit. I would not say that we have adequate facilities—one is always striving for an ideal. However, I can say that those entering farming number approximately 1 800 per annum. We so often make the mistake of saying that there are no new entrants to farming, but there are. Of these 1 800, approximately 13% are matriculants. I find this figure somewhat low; one would have like it to be higher.

Mr Chairman, in our training facilities we have in fact made provision for giving these people a little training after matric. Over the past five years we have done the following: We have enlarged the hostel at the Elsenburg Agricultural College and we have erected lecture halls in order to be able to accommodate considerably more students. The same was done at the Potchefstroom Agricultural College; we erected new lecture halls there as well and the building of hostels has been approved. We have extended the hostel and the lecture halls at Cedara. In addition, we have purchased a farm for a new agricultural college. The plans have already been approved. We are working as hard as we can within the means of our budget in respect of this particular matter.

Mr Chairman, the hon member for Barberton ... I see that unfortunately the hon member is not in the House at present, but perhaps the message will be conveyed to him by you. [Interjections.]

You will just have to address the Chairman.

I trust that as is customary, the Chairman will convey the message to the hon member I am addressing. [Interjections.]

Mr Chairman, the hon member for Barberton raised a number of important matters. For example, he asked whether the budget complies with the requirements of the White Paper. It is not quite clear to me what he meant by that. I do not know whether he meant whether the requirements of the White Paper comply with our budgeting procedures, or whether they comply with the amounts budgeted for this year. However, I shall deal with both matters. Firstly, I want to refer the hon member to the final sentence in the White Paper. It states that we will be launching certain programmes of action—and I emphasize the following—within the financial means of the Government. That is important. After all, each of the various departments fights for as much of the available funds as it can possibly get. Ultimately, however, we must be satisfied with a limited allocation from the global cake, since the Government has various priorities. However, we ourselves determine certain priorities within our financial means. If on the basis of this White Paper we should determine that certain goals should be given more urgent attention than in the past, we can still make certain adjustments and rearrange certain things within our own budgetary framework. The hon member will understand that since we find ourselves in such an absolutely abnormal situation now, our priorities have had to be rearranged somewhat. For example, one would have liked to have more money for research; one would have like to have more money for training, to which I have just referred. Due to the urgency of additional aid to certain sectors of the industry one must probably arrange one’s priorities accordingly. However, we hope that when we return to a normal situation again we will be able to single out specific priorities within the framework of our budget. Those priorities will to a large extent be determined in this Assembly Chamber as a result of speeches made here, as a result of representations made by hon members on both sides of the House and as a result of representations by the SA Agricultural Union. We shall determine our priorities accordingly.

Mr Chairman, when it comes to the specific funds made available for the agricultural budget this year I want to tell the hon member for Barberton that one should perhaps just have a look at what really happened in the Budget. In order to be able to make a proper evaluation one should perhaps also look at what happened with the Additional Appropriation we had at the beginning of the year. If one looks at that one will notice that in the Additional Appropriation the Agricultural Vote requested and received an amount of R377 million. We received this because our case was properly motivated. We received a very large portion of that R377 million precisely as a result of the heavier demands agricultural financing made of us due to the drought. Once again we have a situation where we have to make provision for drought relief schemes. As hon members will know, we at least have a series of schemes in progress now, and it is extremely difficult to determine beforehand what the financial implications of each of these schemes are going to be.

Mr Chairman, I want to come back briefly to the budgeting procedure. How is this done? We determine a need on the part of the department; we take into account inputs we receive from organized agriculture. This is referred to the Jacobs Committee and a specific need is then determined. We then formulate a scheme and give the Treasury a rough estimate of what the financial implications could more or less be. However, we cannot tell them definitely. We do not know how many farmers are going to apply in terms of drought relief measures; we do not know how many drought relief subsidies there are going to be. We do not know how many farmers are going to apply for debt consolidation. Nor do we know which industries are going to come forward with assistance for the different industries during the course of this year. However, we launch the different schemes and if they are approved by the Cabinet and the Treasury we administer them, and as we need the funds we ask the Treasury for them and they then give us those funds.

It so happened that last year we asked for considerably more than what appeared in the Budget. A nominal amount appeared in the Budget which eventually grew to R377 million. The same applies to this year. We made a rough estimate that we need approximately R302 million for our immediate needs. However, that is not what appears in the Budget. We shall request approximately R302 million from the Treasury, however, Later on in the year, as our schemes develop, we shall have to request further amounts. However, the point is that we shall make provision for this in the Additional Appropriation next year. It is also possible that the Supplementary Budget can be altered. When we were in the veld we told the farmers that when one reads the White Paper one must not be blinded by the fact that it does not specifically state that a specific amount will go for drought relief. That money will come. What is important to us is that we get the schemes approved. After all, once a scheme is in operation we do not stop it; it goes on.

Mr Chairman, the hon member also spoke about purchasing land. I think it is as well to reiterate that the programme for land purchases was suspended quite a number of years ago by the department via its Division of Financial Aid. That is apart from cases where we purchase land for consolidation—uneconomic units that are consolidated with other uneconomic units. That is apart from cases where it is done in terms of a special scheme, such as, for example, the scheme for increasing the population density in the designated 10 km strip along the northern border. Apart from these cases, the Division of Financial Aid—that is its new name—does not really finance the purchasing of land as such. We said that that function should be transferred to the Land and Agricultural Bank. After all, our funds are limited and we are more intent on assisting the category 3 farmer who has financial problems. We provide these category 3 farmers with funds for production requirements. Before I forget, while I am on this point, I want to say that in the latest scheme provision is being made for farmers who have had a crop failure to borrow an amount of R75 000 from the Division of Financial Aid during the coming planting season. The money will be loaned at an interest rate of 6%, instead of the normal 8%. I think that a very large group of farmers, the medium sized and smaller farmers in particular, will benefit tremendously from this.

Mr Chairman, we have also gone one step further, however We also said that apart from fuel, fertilizer, seed and the normal production requirements provided under this scheme we would also consider—we are looking at this at present—providing wages and rations for farm-labourers. There were also representations from organized agriculture that we look at the wage and ration situation.

Hon members will understand that this is a very difficult thing to administer. I cannot do so on a basis of exchanging receipts and payments. We have therefore decided on the following:

We have a table which indicates the labour remuneration of the Division of Agricultural Production Economics per hectar of arable surface for 1982-83. According to the table a wage tariff is paid per hectare. Supposing a farmer has 400 ha under crops. He will then qualify for a maximum loan of R11 200 per annum according to the formula. This amounts to approximately R933 per month. This is in respect of his wage expenses.

Mr Chairman, I think this is another very important concession to the farmers in the drought-stricken areas.

When will it come into operation?

It will come into operation as soon as we have obtained the go-ahead for this from the Treasury.

Mr Chairman, the hon member for Barberton mentioned another point, viz whether the State will assist if disposal sales take place on a large scale.

We trust that the announcement the hon the Minister made yesterday will limit disposal sales to a large extent. I believe that there is already greater peace of mind in agricultural communities this morning, inter alia, among co-operatives, as well as among the other money-lenders such as the pharmacist, the general dealer, the garage and wherever the farmer has accounts. The fact is that dealers are attuned to the farming economic pattern, and the pharmacist, for example, know that if farmer A can only plant a crop again, he will produce again and pay his account. I believe that a large percentage of our farmers will settle their debts. Of course a few farmers will go under, but I believe that a large percentage of the farmers will succeed. As I have already said, there is already a degree of peace of mind due to the announcement made by the hon the Minister, but I make no secret of the fact that this matter of selling up on a large-scale is something we are deeply concerned about, since this is something that could snowball. If farmers in a certain area start selling up, the whole thing will snowball, and what is going to happen? Property prices are going to drop. I am not opposed to property prices dropping, since in my opinion they are still too high, but it could happen that the market value could fall below the production value—and we have examples of where this has happened, although not within the borders of the RSA, but in the adjacent areas. If this should happen the problem arises that the security of farmers who do not have problems is also jeopardized. All financial institutions would then have another look at all the security of farmers, and this is a tremendous source of concern to us.

We prepared a draft moratorium Bill, as recommended, but after consideration we decided to hold it back because—and one could debate this at length—the introduction of moratoriums is an extremely drastic measure, since it has side effects which could perhaps be very dangerous for the agricultural industry. Furthermore, it has the effect that many people who have participation mortgage bonds could be placed in a very awkward position if we were to introduce moratoriums. We are therefore most concerned about this and we have the instrument at the ready if it should be necessary, but I certainly hope that it will not become necessary to introduce moratoriums. As I have already said, however, I think that the measures the hon the Minister announced yesterday will eliminate many of those problems.

Inter alia, there were questions about GST, and perhaps I should react to them briefly. Firstly, farming requirements are of course exempt from GST, ie production requirements are exempt from GST. I have here a very long list of what is excluded. A farmer can automatically be exempt from GST by handing in his GST number at the co-operative. However, GST must be paid on tractors and other capital goods purchased by farmers, but under the present system of taxation it can be deducted 100% from income tax together with the price of such items.

One of the hon members—unfortunately I cannot remember who it was—spoke about our income tax system. Organized agriculture, many of the hon members here and I have for many years been asking that we develop a system in terms of which we can write off the total cost of an implement in the year in which it is purchased. I do not want to go into all the reasons we advanced for this now, but we made fine speeches on that subject. Eventually we were permitted to do so, but not one of us, neither organized agriculture, nor any of us realized what we were in fact getting. For what happened then? In 1981 we had wonderful harvests, good maize harvests in particular, and then the farmers had enormous incomes, but instead of paying income tax on that, what did they do? They purchased implements. Very well, I concede that they did need some of them, but they did not need others. They stored many of those implements.

Just be careful what you say now.

Yes, I am being very careful, but I am not avoiding the truth. Some of the farmers did not need those implements and they were stored away because their prices would increase as a result of inflation in any case. Personally, I purchased a tractor for R15 000 one year, and the next year it cost almost R20 000, and that was nothing exceptional in an inflationistic situation. That was one of the arguments advanced as to why the farmers purchased tractors perhaps before they needed them. The other argument that was advanced was that they had the income that particular year and if they were to purchase the implement they could write it off immediately for income tax purposes.

Due to poor harvests those same farmers had a cash flow problem the next year, however, and of course it is not as easy to exchange a tractor for money as it is to exchange money for a tractor. This landed many of our farmers in a dreadful quandary and caused cash flow problems for them.

The alternative for which we are striving and where we already have our foot in the door slightly, is that instead of purchasing unnecessary tractors we could rather invest that money tax free with the Land Bank, for example, until such time as we may need to use it for some drought situation or another, or for expanding farming activities. In such a case the money would become taxable, but the farmer would be able to deduct the amount concerned because it would be a legal farming expense. That is the ideal for which we are striving, and I believe that we are already making a little progress in that respect. Farmers who have to sell their stock in drought conditions can in fact invest that money they receive with the Land Bank if it is creating a tax problem for them and when they want to purchase stock again they can use that money for that purpose and it will then be recorded as a debit. That is the ultimate ideal.

I should like to make the following statement, with the greatest degree of responsibility, with regard to the tax situation: If the farming community and the SA Agricultural Union are of the opinion that we have made a mistake here and that we should rather go back to the old system of percentual depreciation we had earlier we should have the courage to plead for this at our congresses. That is just a thought, however.

Hon members must please not take it amiss of me for missing them out and reacting to the speech of the hon member for Prieska now. I want to combine the speeches of the hon member for Prieska and the hon member for Bryanston, and I trust that they will have no objection to that, since they brought up a very important matter. The hon member for Prieska indicated to what extent our resources are deteriorating and what steps have been taken over the years to combat this tremendous problem. Personally, I have already said on occasion that I believe that although he is the title holder of the land, one should really only see a farmer in South Africa as the trustee of that land. After all, land is national property and one only has trusteeship of it as long as one is alive, but it has to continue for generations after one. One should therefore try to leave that land in a better condition than when one acquired it. If that were the view of every farmer in South Africa we would not have a problem.

The hon member for Mooi River—I think it was he—said yesterday that the White Paper has one weak point, and that is that it has no teeth.

Yes.

That is correct. This legislation, which concerns the conservation of our natural resources and which has replaced the old Soil Conservation Act, is an instrument that could be used to achieve the goals in the White Paper, and this is indicated in the White Paper as well. The White Paper itself does not have teeth, but the instruments it has, do. A list of schemes that do in fact have teeth appears at the back of the White Paper.

The hon member for Bryanston says that we do not have the courage of our convictions to implement the wide powers we have. He also says that the soil conservation campaign was a failure. That is not true, however. The soil conservation campaign was not a failure; in fact, it was a tremendous success in many areas. For example, 30 years ago the Swartland area where I farm was eroded to such an extent that it looked like fish bones lying across the land. Today that area has recovered very well although last night’s storm damaged the land very badly again, but we will repair it again. However, I now want to tell the hon member for Bryanston, as well as for general information, that I have in my hand the Conservation of Agricultural Resources Act which we amended last year, as well as the set of draft regulations that have to be introduced in order to give effect to what appears in the White Paper. These regulations have a bearing on soil conservation, the agronomic section and grazing. Now let met tell hon members this today; whether or not I am going to be popular is of lesser importance to me, but if the National Soil Conservation Committee, the umbrella body, after consultation with the department, should ask me to lay down certain regulations, I shall do so. I shall do so, whether it is popular or unpopular. I have already laid down regulations that have been unpopular. Each time one lays down a regulation concerning an area, the cultivation of soil or soil conservation methods, the farmers ask whether they can come and see the Minister—and then they have 10 or more good reasons why it should not be implemented. I have experienced this. However, we shall stand by this Act. I foresee that when this drought is over and we have survived it we shall determine carrying capacity not only for larger regions, but also for smaller regions, and compel our farmers to comply with those regulations. At the recent NWGA congress I announced that assistance to those farmers receiving aid under the phased drought relief scheme and who do not comply with the requirement that they get their number of stock within the prescribed official carrying capacity requirement by the end of this year will simply be suspended, since we cannot continue in this way.

I have just received a document to which I want to refer. In 1933, 6,7 million sheep, 712 000 goats and 753 000 cattle died in this country due to drought. However, I now want to tell hon members that I am not aware of sheep that have died during the recent drought, which was worse than the drought of 1933, but I am aware that fat sheep from the drought-stricken areas are coming onto the market due to the assistance we have rendered. We are still keeping those farmers in production.

Finally, I want to say that I think that as far as drought relief is concerned we have now reached the ceiling—and in this regard I also refer to my last announcement with regard to the new phase 5 drought relief, in which we also give people who withdraw stock an incentive.

Mr Chairman, I do not want to comment on what the hon the Deputy Minister said at all, except that I want to associate myself with his remarks in connection with aid to drought-stricken areas and grazing capacity.

This afternoon the hon member for Bryanston had a lot to say about soil conservation—implying that the Government and the State would not do anything about it. I should like to refer him to the annual report of the department. On page 30 he will find the figures pertaining to what the State is doing in the case of soil conservation works—and that at a time when the country and the department had to contend with difficult financial circumstances. If one adds the contributions of the farmers to the subsidies that were paid, one will see that a remarkable amount is being done every year. In the very next paragraph you will read that steps have been taken against people who neglected farming properties and who allowed them to become eroded as result of insufficient soil protection. Teeth are therefore being shown, and there is no hesitation about taking action either.

But soil deterioration in this country has a long history. One need only read Lawrence Green’s description of the trek through the Karoo. In his books one can read about the big springbok migrations and how the people in Prieska sat on their porches shooting springbok in the street as they moved through the town because of the drought. Then the pioneer farmer came along and applied a communal farming system. He also had a kraal. The department then introduced the Soil Conservation Act. Wire for paddocks, inside hedges and water-holes for stock were then provided and the animals could run free. Once this had to a great extent been seen to and enough time had been granted for every farmer to comply with this, they went on to the next phase, namely soil reclamation. This included weirs and contourbanks, as well as the planting of vegetation, which has always been the best measure against soil erosion. But one must also be well aware of nature’s onslaught on the farmers. We saw what happened in Natal recently. I also saw what happened a few years ago in Laingsburg. Nobody can stop this drought. The interior simply does not have the vegetation to withstand wind erosion. All these factors should be kept in mind. It is not something that can be corrected in 2, 3 or 5 years’ time or even in a lifetime. It is very easy to destroy soil. It can happen within a year, within a generation or within a person’s lifetime, but to rebuild it again takes many generations. It is a long process, but I am convinced that wonderful progress is being made by the department.

I should like to say that the importance of agriculture—and also, of course, its vulnerability—has never been so accentuated for the nation as it has under the present circumstances in which we are living. Various factors contributed to this. We can now say that drought contributed a great deal to the situation, but it is not the only factor. The world-wide economic recession, the inflation rate and its attendant price rises, the low gold price and also the unprecedented and unforeseen high interest rates are all contributory factors to the tremendous financial problem agriculture is saddled with today. These high inflation rates are one of the factors which contributed to the great financial problems the farmers are saddled with today. I want to associate myself with the words of thanks and appreciation expressed for this White Paper and the annual report, but allow me also to express my thanks and appreciation to the present Minister and Deputy Minister, the Department of Agriculture, the Land Bank, the co-operations and everybody who contributed in these difficult circumstances to make it possible for the farmer to survive. I would also like to express my gratitude towards the many, in fact hundreds of, officials in the department who worked a lot of overtime in order to make these difficult circumstances as bearable as possible. As a farmer—and I also speak for my fellow-farmers—I appreciate this very much.

I should also like to bring one matter to the attention of the hon Minister, perhaps more specifically to the attention of the hon the Deputy Minister, and that is something really important but which also causes concern. The normal rainfall season in the North-West is really over. One should really plan for February and March next year in regard to those parts that received no rains. As result of the rise in the price of maize the farmers’ maize purchases from 1 January up to now has dropped. At Fraserburg, for instance, up to 31 December, one could have bought 319 bags of maize for R4 500, but now one can buy only 241 bags for that price, which means 78 bags less. Put a different way: the same 22,4 tons of fodder for which one would have paid R4 500 on 31 December, will now cost you R5 950, or R1 435 more. Railage and other increasing costs are not included. The only reason for this is apparently the higher maize price.

Today I want to plead for a review of this situation. I would be the last person to think that farmers only plead for higher subsidies, but I do want to plead for an adjustment, even if it is only an increased loan amount, because the sharp price increases were not something the stock-farmers could control. I therefore ask for at least a higher loan amount to make up for the rise in the cost of fodder.

I said that for us the rainfall season is in fact over. Winter lies ahead. Once again, if a man cannot afford it, the co-operation will not be able to carry him. The farmer does not have the means and even if he could get help from the bank, it would be at an interest rate of 22%, which agriculture cannot bear at the best of times, least of all at the present moment. This is what I want to advocate. I have been referring only to the natural resources. Are the natural resources going to suffer because of these circumstances?

In this country surely the most precious resource apart from our human material is our soil. A good farmer will still be able to survive on bad soil, but the reverse, namely the bad farmer on good soil, will create problems. In this country soil remains one of our most precious resources. For this reason I agree with every word spoken here with a view to the conservation and development of that resource in order to leave it to posterity in a better condition than each of us found it.

Today I should also like to make so bold as to say that love for farming is a prerequisite. Under the difficult circumstances in which farmers have to make a living today, the love for the soil, the animal or whatever is farmed with, is essential. The farmer today is, however, also an entrepreneur. He is subject to the same financial requirements as the rest of society, namely university fees, school fees, fuel prices, etc. He is also entitled to decent reward for his efforts. And this is where the problem lies. When the drought started in the North-West, capital dried up. Established farmers did not have the money to resist the drought. Today I maintain that no farmer who loves his soil wishes to destroy it, but I must admit that over the short term he may have to increase his stock as result of the economic pressure and economic obligations that have to be met. In other words, he tries to survive over the short term. Along with this are all the risk factors which he comes up against, for example the harshness of nature—I do not want to refer to everything—floods, frost, hail, stormwinds and heat-waves. [Time expired.]

Mr Chairman, I should like to associate myself with the hon member for Beaufort West. It is always nice to hear a practical farmer talking plain, sensible language. I associate myself especially with his expressions of thanks, and I should like to avail myself of this opportunity to express sincere thanks to the Ministry, Dr Immelman and all his officials on behalf of my voters and all the farmers of South Africa for the sympathetic ear they always have for a farmer’s problems. The recent drought assistance and emergency aid that was rendered, of which we have heard a great deal in this debate as well, speak volumes. The acrimonious criticism that is frequently levelled at the Ministry and its officials is usually side line criticism from people who do not take part in the match.

I should also like to associate myself with previous speakers regarding the White Paper on agricultural policy. In this regard I should like to congratulate the Ministry and the officials concerned whole-heartedly.

I also want to say this afternoon that I am very glad that the hon member for Albany changed his attitude to the White Paper completely yesterday afternoon. I am glad that the hon member put it in a different way to the way he had put it in the English-language Press, for there it seemed to me as though the hon member for Albany disapproved of the White Paper and that he was pleading for such low produce prices that all the consumers would live a blissfull life. Luckily his story was slightly different yesterday afternoon. I thank him for it.

Anyone who criticizes the Marketing Act of South Africa is without doubt a person who was born after the Act or a person who started farming very recently. This White Paper accommodates every part of our industry and I am very thankful that it has made its appearance. With these few remarks I would like to leave the White Paper at that for the moment.

This afternoon I should like to use my turn to speak to set a cat among the pigeons as far as a certain problem—the financial position of the farmer—is concerned. Because farmers are on the one hand dependent on nature and on the other on the market price of their products, we have the phenomenon that farmers even in the same industry must either ask for State assistance or have problems with their income tax assessments. Two absolute extremes. In the wool industry, of which I have some knowledge, we struggled for many years with a fluctuating income as a result of our old-fashioned and obsolete marketing scheme. Since the new modern marketing scheme came into operation, this industry has enjoyed far greater stability and the wool farmer has also been able to budget properly. By the way, perhaps there are other agricultural sectors which should examine their marketing methods within the structure of the Marketing Act to see whether they still meet the requirements of modern times. Along similar lines, I think that it is time to look with a modern eye at the taxation system of the farmer, in spite of what the hon the Deputy Minister said a moment ago.

Because of the risky nature of the farming industry many concessions in the taxation system have been created for farmers throughout the years, for instance the levelling system and the system which the hon the Deputy Minister spoke about, for which we as farmers are very grateful. In practice, however, we find that during a good income year the fanner must incur all sorts of deductible expenses in order to avoid a heavy assessment, and the very next year, when conditions are not so favourable, he falls into the arrears again. In my opinion the present taxation system is the main reason why a farmer is unable to build up a reserve fund for himself. If a fanner shows a profit above a certain figure, he is farming almost exclusively for the State. This quenches his initiative and agricultural production suffers. Under the present circumstances an enormous amount is being done for farmers who have problems. I agree that this is correct, but what has the State really done for the farmer who managed to succeed on his own? As a matter of fact, he is being taxed because he planned well and acted carefully. Frequently, too, he becomes the victim of a totally new industry that flourishes around the farmer’s taxation problems and when he has finished farming and has endured everything and dies, then he becomes, in his coffin, a candidate for estate duty. I also think that it is a shame that there are some farmers—fortunately only some—who are known as men of substance and who then on the sly boast among their friends that they paid the minimum or no taxes.

I did not want to submit the proposal that I want to make here today directly to the Minister of Finance, because I think that it is something that must first be settled here among our farmers themselves. I also know that my proposal is no new idea, but I am putting it forward because I think the time is ripe to take another look at this matter in depth. I get many requests in this regard from my constituency.

My proposal is based on a land-tax system according to which each owner of agricultural land will pay a fixed annual tax according to the production capacity or value of that land. [Interjections.]

Mr Chairman, I hear many remarks, and I know I will not be popular for my proposal, but it will give us a wider tax base. When it comes to finding an infallible formula according to which this can be done, I believe that the Department of Finance has the people who can do it. If a farmer then has other income for example interest on investment or dividends on shares, it can be taxed in the usual way.

Mr Chairman, there is much detail attached to such a system that I would like to spell out, but you are already glancing at the clock and I certainly do not have time to do so. I ask only that the hon the Minister, and maybe through him the South African Agricultural Union, will reconsider the matter to find another system for farmers that will be better suited to modern conditions. If such a tax system is possible, its administration costs will be lower, the Government will get more money, the farmers’ initiative will not be quenched, and last but not least, the professional man will no longer buy agricultural land as a tax deduction against his taxable income. Big businessmen with strong farming companies who compete with the farmers and the farmers’ production are a source of concern to me.

Subsidy has become a term of abuse among our farmers and it is very essential that we save the agricultural industry by providing the farmers with sufficient capital without the State having to suffer. I believe that in normal times there is enough money in circulation within the agriculture for the industry to stand on its own feet without having to borrow astronomical amounts of money. In regard to this loan debt I should also like to say that people spoke about a rotating fund, but today a rotating fund at the Department of Agricultural Credit and at the Land Bank is only a theoretical concept. If, however, thought is given to an incentive, for example a tax reduction on money paid back to Agricultural Credit and the Land Bank, the dream of a rotating fund can become a wonderful reality.

Mr Chairman, personally I do not like the idea—and I am saying it here in the debate so that everybody can take note of it—of a tax-free investment at the Land Bank which I have to go and draw the day I am at the end of my tether, while I still have to pay tax as well.

I do not expect everyone who hears me today to agree with me, but if I can only succeed in getting people to think again, I shall be very happy with the opportunity I have been afforded here.

If this tax system were to be adopted, we could simplify the tax form in such a way that it would more or less ask a person: How much money did you earn; how much money did you have left; and why?

Mr Chairman, I should like to associate myself with the thanks expressed by the hon member for Beaufort West and the hon member for Queenstown to the officials of the Department as well as the officials of the Land Bank. It is undoubtedly true that during the past year in particular exceptional demands have been made of these people.

I want to refer briefly to the hon member for Schweizer-Reneke who said this afternoon that the hon member for Lichtenburg had dragged political issues into the debate. The hon member will recall that yesterday when my colleague, the hon member for Lichtenburg, suggested a wonderful emergency plan for farmers, he said that he did not agree with it. But a few minutes later the hon the Minister accepted the plan and we want to thank the hon the Minister most sincerely for this plan which he spelt out yesterday.

The past year could probably be seen as one of the worst years agriculture has experienced since the depression. In the summer rainfall regions of the RSA in particular, and specifically in the western parts of our country, the drought assumed disastrous proportions. Within the space of a few years and even within a single year, many of our farmers changed from being relatively financially sound farmers to being farmers with serious financial problems. Without my repeating the facts, hon members will agree with me that this was a disaster, although it took place over a two- or three-year period, and that it was beyond the control of the individual. Against this background we agree that it is the duty of the State to assist these people. The taxpayers should not complain about this principle now. On the other hand it is also a pity that when increased taxation to finance higher State expenditure is at issue, the Government creates the impression that all the increases, particularly the increased State revenue, will be used mainly for drought assistance to our White farmers. The recent increase in the GST is an example of this. Whereas increased State revenue from this is estimated at approximately R800 million, assistance to agricultural producers will probably not total more than R250 million of this amount. In any case the greater part of this assistance will be in the form of loans. The drought assistance to our farmers is being welcomed everywhere, but I do want to make a serious appeal to the hon the Minister to dispose of those representations which have not yet been finalized. Here one thinks in particular of the risk position of the co-operatives and the very unfortunate fact that farmers who did not obtain large-scale co-operative credit, but who financed themselves, or made use of commercial bank credit, are to a certain extent excluded from the assistance measures. Although sound and practical arguments in favour of this could probably be advanced, it does create a very dangerous situation which we cannot afford; namely the impression which is being created that only farmers with debts are being assisted and the larger the debt the greater the amount of State assistance.

The White Paper determining the agricultural policy of the RSA, which has been tabled by the hon the Minister, is being welcomed because it summarizes the views and intentions of the Government in connection with agriculture. But there are a few matters that are not dealt with clearly in the White Paper and I should like to hear the opinion of the hon the Minister on these matters. Mention is made of the fact that the agricultural policy should be reconcilable with the general economic policy, but nowhere is it stated that the general economic policy of the Government should also take agriculture into account. A good example of this is the change in the method of financing of the Land Bank a year or two ago to pursue certain vague, monetary policy objectives. At this stage this change coincided with the first drought, with a overseas and domestic recession, with the result that farmers had to finance their unavoidable drought debts at record high rates of interest. In addition they also still had obligations they had incurred at a low rate of interest. This change in the method of financing at that stage came at a most inopportune moment for agriculture and definitely contributed to the financial dilemma in agriculture.

Another example is the industrial decentralization measures of the Government. Although it is said that the Government recognizes that agriculture is important as far as decentralization is concerned, its actions do not attest to that. Although agriculture is the single largest decentralized provider of work and revenue, it is at present still almost totally excluded from the decentralization measures announced at the Good Hope Conference in Cape Town. The application of certain of the industrial benefits is creating serious problems for agriculture, for example, in respect of the disruption of wage structures, the poaching of labour and the granting of benefits to industrialists, whereas the agricultural co-operative is already involved in a similar action. Now the question is how the hon the Minister is going to avoid similar events in future, when economic policy is formulated and applied without taking agriculture into consideration. In The White Paper it is also stated that agricultural development must be promoted in Southern Africa. As a general objective one can probably not disagree with this. If it is also borne in mind that the development of most undeveloped countries ought to take place by means of agricultural development, one cannot find fault with this. But the fact of the matter is that sufficient agricultural produce is already being produced in the RSA. Our domestic needs are being adequately met. In good years we can even export a third of our production. If the development of agriculture takes place outside the RSA, the question is: Where are those products going to be marketed?

The same question could also be asked in connection with the non-independent Black states. Increasingly it is being found that complaints arise because certain products are being produced in these areas and projects are being initiated without a proper market investigation having been made in advance. The products are then marketed in the RSA where the markets are already adequately supplied. In certain cases this goes even further and processed products are sold at lower prices in the RSA, inter alia owing to the fact that the cost structure of these products is lower because of certain benefits such as financing and decentralization. This is a matter which could have serious implications. I would have liked to see provision being made for this. In other respects the tabling of the White Paper is only the first step. The second and more important step is to implement the policies indicated by the Government by means of various measures and instruments. This means that a comprehensive evaluation will have to be made of the existing agricultural measures in order to implement the White Paper. Yesterday afternoon the hon the Minister indicated that he would give attention to this evaluation aspect. The question is whether the hon the Minister has already initiated the procedure and also precisely what method is going to be adopted to implement the White Paper.

Mr Chairman, the hon member for De Aar pointed out certain problems in connection with the detralization measures. I assume that we feel the same about industrial decentralization and its purpose. If there are in fact by-products which are creating problems for agriculture, I want to suggest that there are in fact other benefits for agriculture. Two of these are a decentralized pool of labour if the incentives succeed, and marketing areas closer to the production areas.

I should like to discuss the optimum utilization of labour in agriculture. This is given as one of the goals in the White Paper. Previously it was also pointed out in the report of the Economic Committee of the President’s Council that one of our problems in South Africa was a surplus of unskilled labour and a shortage of capital and skilled labour. The White Paper on Agricultural Policy also points out the level of training and the resultant distorted distribution of career classes and an oversupply of unskilled labour as one of the labour problems in agriculture. Other factors which are unique to agriculture and which can be identified as labour problems and could give rise to friction, lower productivity, and so on, are often language differences and communication problems. In the third place, it is a smaller labour force employed on a family basis which makes it difficult to promote specialization. In the fourth place there is the problem area of a wage package which obviously, in addition to salary, includes housing, provisions, clothing, medical care, water, etc. In the fifth place there are seasonal fluctuations in labour requirements. In many cases farmers are also small business undertakings. Specialization in management and consequently in manpower management is not always possible. The qualities which make a man a good agriculturist do not always include the qualities of a good personnel manager. Another factor which can be mentioned and which was mentioned by the hon member for De Aar, is the competition with industries, particularly as far as remuneration is concerned, as well as promotion possibilities. Increased costs of production inputs in agriculture, of which labour is a very important one, and in many cases the fixed prices of the finished products require the optimum utilization of labour as a resource. Sound manpower management in agriculture is of the utmost importance. As far as unskilled labour is concerned, I want to thank the hon the Minister for his view, namely that additional training centres are necessary.

The problem of unskilled labour is not only the duty and responsibility of the State, but should also be addressed by the individual farmer. In this connection I want to mention a few factors. One of the factors which is frequently overlooked, is good selection and placing of the labourer in the right position according to his capabilities. A badly placed labourer is not only unproductive, but he is also unhappy. Placing labourers in the right job can be achieved by means of interviews, performance tests, aptitude tests, intelligence tests, etc. In this way the labourer can be thoroughly screened and used in the right job. Functional training in the labour situation could lead to better achievement and productivity and also to a far smaller turnover of labourers. A great deal of trouble must be taken to bridge the communication gap and to solve the language problem and consequently to eliminate differences in background. These problems must be solved and it must be ensured that the labourer understands his duties very well before he is entrusted with responsibilities. An atmosphere which promotes communication must prevail and provision must be made for report-back mechanism. Employees’ suggestions must be given the necessary attention and their implementation must be promoted.

Because the labour force is frequently hired on a family basis, the employer must provide housing, recreation and other facilities so that the family requirements of the employee can be met. In many cases wage packages are also paid in kind. When price competition takes place these benefits are not taken into consideration. A cash value must be placed on the benefits provided in kind so that the labourer can see what his total wage package is worth. In cases where a labourer is remunerated with seasonally available products a monetary value must be paid out to him as a substitute when the products are out of season. If the labourer is not paid the substitute, he will never consider the products to be a part of his wage package.

If the farmer recognizes the importance of good manpower development management, this will contribute to his training himself and his employees entrusted with it in this direction, or having them trained further. He will manage his labour force better. Labour relations will improve and what he is ultimately striving for, productivity, will be increased. Study groups of agricultural cooperatives can do a great deal to disseminate information. This could also have further advantage, namely that there will be uniformity in a certain region as regards the approach to labour and to wage packages. Information can be exchanged and this will give the employer greater certainty and will eliminate an exchange f labourers among employers. It is most gratifying that the Agricultural Union has addressed this problem in recent years. The union has made purposeful efforts to develop sound manpower management in agriculture. They brought out a publication entitled Riglyne vir Mannekragbestuur in die Landbou. In this publication attention is given to sound employer/employee relations, general conditions of service, characteristics of management, labour problems, etc.

The organization charged with rural community development is also doing very good work in this connection under the auspices of organized agriculture. I believe that, in conjunction with the announcement by the Minister that more training centres are to be established, this input in agriculture, namely labour, can also be used to the optimum, and that as one of the inputs it can bring about far greater productivity and can help to alleviate many of the problems in agriculture.

Mr Chairman, it is a privilege to speak after the hon member for Nelspruit. I agree with, and I think we all listened very attentively and appreciatively to what he said. This afternoon I should very much like to say a few words about problems existing in the small abattoir and small butcher industry. I should also like to say a few words about hygiene in these industries. Consequently I am talking from the point of view of the smaller towns, outside the controlled areas, and I am going to try to place myself in the position of the small butcher who makes use of the small abattoir in the small rural town. In this connection I should like to refer to a few facets which are problems to our people. In the first place there are the levies imposed by the Meat Board. In the second place there are re-inspection fees which are levied. I want to refer to the abattoir service areas and to chain groups and the role they play in the small towns. There are also State contracts which are allocated, closed accounts as far as the local authorities are concerned. In conclusion I just want to make a single remark about butchers’ associations which are developing and for which I have very great appreciation. Consequently if I address a friendly request to the hon the Minister this afternoon it is for a number of reasons. In the first place: If one talks to the butcher in the rural areas he tells one that the allocation of registrations for new permits for new butcheries in the town should be drastically curtailed. In our town, for example, the number of liquor stores has increased by two during the past few years. There were always two liquor stores and now there are four. The number of butcheries has increased on an far larger scale. There are more than thirty. I am mentioning this to indicate that there is an imbalance somewhere. When we are discussing permits which are allocated, we want to ask that if they are allocated they should be subject to the provision that the livestock slaughtered must be slaughtered locally. If a butcher wants to slaughter livestock elsewhere and goes from the small town to the controlled area for example, he must get the permission of the local authority, because it is the local authority that erected that abattoir and that has to ensure that the debt owing on the abattoir is paid off. This is an old arrangement which applied in the past, but which no longer applies. When we consider levies, we see that the Meat Board levies a few on every sheep and every pig and every bovine animal slaughtered. In our case it is R11 per bovine animal. If I look at the slaughterings in our town, this amounts to R180 000 per year, although our abattoir slaughters at a loss owing to the underutilization of the facilities there.

The friendly request is being made that our abattoir should be subsidized from these levies the Meat Board receives, until such time as it has redeemed the capital on its debt. If all the meat consumed in a town like mine—this applies throughout the country—were to be slaughtered locally, we would not have had any problems, because the income of the local abattoir would then have been so much greater. That is why I do not think it is unreasonable to ask that all butchers should slaughter at least 80% of their turnover at their local abattoir.

We know that all meat brought into an area from outside is subject to re-inspection, and that a re-inspection fee is levied on it. For example, the fee in our town is 4 cents per kilogram for cattle, 4c per kilogram for pigs and 2,5 cents per kilogram for sheep. If this re-inspection fee on meat brought in from outside were to be increased to 10 cents this would amount to only R3 more per beast, which would not cost the consumer much more, but which would mean a great deal to that local industry. Re-inspection tariffs only apply to meat brought into the municipal area from elsewhere. Today I want to tell you that many butcheries are situated outside the municipal boundaries, and for that reason I think it would be meaningful to consider how to extend the municipal area as far as the magisterial district so that butchers outside the area, who can market meat far more cheaply than those in the town, must also pay a re-inspection fee. Butchers and wholesalers in the controlled area can supply meat to outside areas unhindered. But the opposite does not apply and I should like to know why not? If the Meat Board really wants to help the outside butcher, it can do so by ploughing back a part of the levy it receives in order to subsidize the local abattoir which must be paid for.

There is another major complaint, namely that chain stores bring their meat to the uncontrolled areas from outside. In our case more than 50% of the meat consumed in my town is being brought in from outside and sold by the chain groups, Checkers, Pick ’n Pay and OK Bazaars. These groups are putting the 27 butchers in my town out of business.

In the second place it is very important that attention also be given to the State contracts which are allocated. Ninety per cent of all the meat delivered in my town in terms of State contracts is delivered by the neighbouring town. It has an old abattoir on which it owes little, but will have to build a new one soon. We have a new abattoir which we still have to pay off. The re-inspection fee on that meat totals R40 per ton, but if our abattoir were to deliver it, it would mean an income of R80 per ton for that abattoir. These State contracts involve hundreds of tons of meat annually, which would mean a very great deal if it were to be sold by our own butchers. Of course this meat is delivered to hostels, hospitals and jails. We also have the problem that the local authority itself cannot transfer its loan from the abattoir to one of the other sections of the local authority, because it is dealing with a closed account. That is why I feel it would help if the chain stores were compelled to slaughter at least 80% of their meat locally in order to play their part in assisting to pay for the local infrastructure which they use but are not helping to finance.

I am very proud of our local butchers’ association. I have here the latest edition of the Suid-Afrikaanse Vleishandel in which an article appears on the Butchers’ Association of Brits. Here is a photograph of them, people who are rendering a very good service to the general public and who have caught the eye of the entire meat trade outside. I want to congratulate them on what they are doing.

If I could say a few final words about hygiene at abattoirs and small butcher industries, I want to ask for the highest standards, because only when high standards are maintained and strict requirements are laid down, can one give the public the best service and always do credit to the name of the butcher industry.

Mr Chairman, the hon member for Brits brought an additional abatoir problem to the attention of the hon the Deputy Minister who already has abattoir problems galore. It is a new facet that has come to light and I am sure that it will enjoy the Deputy Minister’s attention.

I would like to associate myself with remarks made by my colleague, the hon member for Mooi River, concerning the hon the Minister, the hon the Deputy Minister and the staff of the Agricultural Department, particularly the economics division who must have borne an incredible load over the past year. They are not a big division and in my speech I will touch on that further. They must have burnt the candle late into the night to have accomplished what they did with regard to drought relief and so forth. I think the next task of the hon the Minister, once he has finished dealing with the problems caused by this drought situation is going to be far more difficult. We hope that the forecast of the hon member for Albany is correct and that we in fact have reached the bottom of the trough and that we are coming out of it, although I do not quite agree with that, but let us hope he is a better forecaster than I am. I am referring to the reversing of trends in agriculture in South Africa, many which have been high-lighted in this debate which has been so interesting.

I would like to restate our thanks for the manner in which the Land Bank has coped with tremendously increased demands and for their extremely courteous manner of handling these applications and the willingness with which they have seen to the speeding up of applications. They have reduced an enormous backlog and injected a new approach and spirit into their handling of people. That speaks volumes for their approach to the very critical situation in which the country has been in as far as farmers are concerned.

It is to my mind very significant that whereas developing countries have essentially a production crisis as far as agriculture is concerned, we in the developed countries have an economic crisis Both have been magnified many times over by the crippling effects of a drought of an intensity and duration hitherto unknown. While the challenge for agriculture in the developing countries will remain the acquisition of technological know-how and expertise, I believe, and we on these benches subscribe to that, that the challenge before the agricultural community in South Africa is to become far better equipped with economic knowledge in order to redeem our drought debts, to compete on international markets, and to participate fully in the national development strategy, particularly as far as urbanization and the depopulation of the rule areas are concerned. The technical advances made in agriculture in South Africa have outstripped the foundation on which they should rest, namely a sound economic base. That is the area I would like to deal with. I want to refer to the question of recovery and the restoration of agriculture as well as how we should go about it.

We appear to have concentrated far too much on maximum production instead of a maximum economic production. Urgent attention will have to be given to this aspect of our farming methods. We believe that the time is psychologically right to launch an intensive programme of education and re-education with the emphasis on economics. The level of receptiveness for such an approach will probably never again be as high as it is now, and if we fail to take this opportunity it will be too late for many and we will have missed an opportunity which could, in fact, lead to the reversal of the trends in many of the areas which have been mentioned in the debate such as overgrazing, uneconomic utilization of ground and chasing the wrong goals in respect of production. We believe that we are looking at a once only opportunity to turn near defeat into a great victory for agriculture. The hon the Minister mentioned he fact that the 70 000 farmers in South Africa formed a vital part of the private sector and were entitled to make a profit. In all too many cases they only make a living. These farmers have to contribute to the national strategy in terms of an increase in their productivity and play a far bigger part in respect of many of the aspects already mentioned, but they are at present only making a living despite vast capital investments. This is one of the areas where the doubt creeps into people’s minds. Because farming requires this vast investment people look around and find so many other opportunities in other fields which do not have the risk potential of farming and which appear to offer a far easier way of going about making a living.

We believe that the Department is, in fact, inadequate to meet this challenge for three main reasons. Firstly, there are too few agricultural economists available in the field and in the Department itself, that is in the top structure of the Department. Their input is going to be indispensable for the reversal of trends and the education and re-education programme I mentioned. The way in which they have coped with the drought debt and the issuing of loans and subsidies is in fact something for which we owe them a debt of gratitude. Secondly, we loose far too many economists and technical staff to private enterprise. Thirdly, the directors and staff right down the line, and I am talking particular of professional men, appear inundated with administrative work on which they have to concentrate their efforts. I would like to ask the hon the Minister and the hon the Deputy Minister when last an open-minded critical analysis of the job satisfaction and contentment aspect of the staff members was conducted. I believe if it was done it would reveal frustration and a lack of goal orientated opportunity amongst these highly qualified and committed people who really would like to be part of the big success story instead of, as it would appear in many cases, being involved in far too much office work. It is absolutely critical that we fully utilize this source of expertise in the programme we would like to see initiated. We have to make it possible to replace what is sluggish and undynamic in the Department with a goal orientated, imaginative and updated programme of education and re-education. We cannot allow each farmer to decide on his own recovery and restoration programme. This will have to be co-ordinated and monitored and drawn up at the very lowest local level involving soil conservation committees, farmers’ associations and the Department. The hon the Deputy Minister mentioned the question of the White Paper lacking teeth and he referred to legislation mentioned in the White Paper but in the final analysis, who is going to implement that? [Interjections.] No, the country is too big for the hon the Minister alone, even with his ideas. It is the man on the ground who is going to have to see to it that that legislation is applied, naturally in co-operation with organized agriculture and the farmer himself. It is a question of getting the technical staff and economists out into the field and involved with those people to initiate this programme of recovery and restoration and getting them involved in a goal orientated programme which we believe will lead to a recovery faster than we think in many of the veld areas and reverse farming trends particularly if people are made aware of how important it is to strive for maximum economic production and not simply production.

Mr Chairman, I should like to reply to a few matters that have been raised.

Firstly, I should like to respond briefly to the hon member for King William’s Town. He dealt with a very important matter, a matter about which I personally am very concerned, namely that we do not always have the necessary staff to give the necessary economic advice to our farmers. I think the hon member will realize what problems we have in practice to draw the necessary staff. It is a fact that agricultural economists are very much sought after in other fields of the economy outside agriculture. Just see how many agricultural economists sit in very high offices today in the public sector, in the banking sector and in various other sectors too. It is very difficult to get them to do the job for which they have really been trained. I agree with the sentiments expressed by the hon member and I can assure him that we in the department are concerned about the matter and that we are trying our best to draw the necessary staff.

I also agree with the hon member when he says that it is impossible for me to see to it that the necessary controls are kept.

*I should, like to tell the hon member however, that as far as it has within manpower I intend to give the necessary potency to the legislation.

Next I should like to deal very briefly with a speech made by the hon member for Brits. The hon member for Brits has a never-ending problem with his abattoir. He made a very nice plea. I do not know whether he learned to plead so nicely with people in his previous work situation, but he did it really well. I am afraid that the hon member for Brits has a problem that occurs far more widely than only in his little town of Brits. The abattoir at Brits is only one of many municipal abattoirs that are experiencing financial problems. In fact, if I look at the statistics in front of me here I see that Brits has a B abattoir with a capacity of 100 units per day, but that its average utilization is only 54,13%. It is a new abattoir that was built in 1981 and cost about R1,3 million. In terms of today’s prices that abattoir was built fairly cheaply. As I say, the problems that are troubling the hon member for Brits are problems at many abattoirs. For that reason I appointed a commission to investigate the financial position of all abattoirs, especially municipal ones outside he controlled area. We have reinforced the commission now by appointing the chief meat hygiene officer as a permanent member.

I now find it rather disappointing that after drawing up a very extensive questionnaire that would give us a very good indication of the problems on a local level, the response to those questions has been very tardy. Only a little more than 50% of them were returned. I therefore appeal to municipalities to return those completed questionnaires to us. I should also like to ask the hon member for Brits to ask the municipality of Brits to address their problems to this commission of inquiry. The same applies to other hon members who have abattoirs in their constituencies. I can tell the hon member for Brits that I spoke to the chairman of the commission I appointed this morning, and brought all the problems at Brits to his attention. The commission is already aware of some of them, but it would be a good thing if the municipality concerned were to address official representations to the commission.

The hon member also mentioned the matter of re-inspection fees. This matter must not be misunderstood. A re-inspection fee is a fee for a service levied by the local authority, that has to ensure that the meat entering its municipal area is healthy, and for that it charges a fee. We must not see it as a protection measure to protect a local abattoir against meat that is brought in from outside. Since I assumed control I have not made a single concession in respect of protection tariffs. We are competing with one another and each person must try to operate his abattoir, big or small, as efficiently as possible. I am not in favour of protecting local abattoirs. In fact, with each application to establish an abattoir I say this very specifically to the municipality concerned.

If the hon member has any further problems he must please come and discuss them with me in my office and also bring them to the attention of the commission.

It is also very pleasant for me to announce in connection with abattoir fees that with effect from 4 June the slaughter fees of the abattoirs that fall under the jurisdiction of the Abattoir Corporation will be levelled or put on a par with one another. That will mean that, for example, a town such as Kimberley will have a reduction of R6 per slaughter it in its slaughter fees.

And what about Standerton?

If it had fallen under the Abattoir Corporation it would also have been a part of this.

And where are the increases going to occur? [Interjections.]

More than 80% of all stock slaughtered in the Republic will be affected by it. I decided on Friday that the slaughtering fees of the corporations will be reduced from R16 to R14. This is the levelled tariff and it means a drop of about 12,5%.

It has also been decided that the slaughtering fees will be estimated according to weight and not per unit. There has been a little dissatisfaction because people paid just as much for the slaughtering of a small animal as for a big animal. In future we will estimate the slaughtering fees according to weight.

This drop of 12,5% does, of course, benefit the producer put in order to accommodate the consumer as well, we have decided to decrease the levy that is at present 3 cent per kilogram cold weight and for which the producer has to pay, to 2,63 cent. This is also a drop of 12,5%. I think that the producer as well as the consumer should be very happy with this.

Finally, at Cato Ridge we introduced a temporary further reduction of R4 per animal for the next two months to accommodate the drought slaughterings.

Furthermore, it is my point of view that abattoirs should increase their productivity as far as possible and utilize their facilities to the full. If there are abattoirs that are being fully utilized on a one-shift basis I should like to see this being increased to a two-shift basis or at least longer working hours in order to get a greater throughput. I hope that abattoirs will give attention to this matter.

Mr Chairman, I should like to associate myself with the thanks conveyed to the hon the Minister and the Department of Agriculture for the compilation of this White Paper which has just been distributed. I should like to focus in one particular aspect which, in my opinion, is the most important issue referred to in this White Paper. In the last sentence of the very first paragraph reference is made to: “the promotion of an economically sound farming community”. In a subsequent paragraph there is the following:

I believe that this is the most important problem that has to be overcome in order to place agriculture on a sound footing again. We must learn from the circumstances surrounding the financial side of production. If we do not succeed in minimizing our high inputs we shall not succeed in placing the farmer on a sound financial footing again. The relief measures announced in connection with the subsidizing of interest and the granting of further aid to farmers who are no longer credit-worthy, measures announced here yesterday, and the additional aid announced by the hon the Deputy Minister, are generally welcomed and are greatly appreciated. These, however, are merely survival measures. They are not measures which will solve the problems we are saddled with in agriculture. The present drought, with its concomitant high production costs and the catastrophic results it holds for agriculture, has made it essential for an in-depth investigation to be instituted into measures to lower the high input costs. My contention is that in the overall economic fabric of this country no one, regardless of the sector of industry in which he finds himself, is exposed to the same risks as those of the agricultural producer. Climatic conditions play an extremely important role. Regardless of whether it is a dry year or whether there are floods or hail, problems crop up. The producer faces all these risks on his own.

I also want to refer to certain aspects which I believe require urgent investigation to determine whether it is not possible to reduce the risks that the agricultural producer faces.

Another important question is what effect the protection of local industries has on production costs. Last year the Bureau for Economic Policy and Analysis, known as BEPA, carried out a scientific investigation into the influence of the protection of local industries on agriculture, and since then certain adjustments have been made. An important adjustment is the abolition of price control on fertilizer. This, however, was accompanied by import protection for the fertilizer industry. Protection for the Atlantis Diesel Engine project was also introduced. I have no objection to these protection measures which have been introduced. It is essential, for the entire economic structure of the country, that local industry be protected, but agriculture is, on the one hand, a producer of strategic products and, on the other, an important purchaser of products that are produced by industries that are, for strategic reasons, protected against competition from abroad. It cannot be denied that to put this policy into practice an increase in the general price levels has had to take place. A further consequence is that the higher local price levels rise, the more expensive it becomes to produce.

At present it is virtually impossible to produce products competitively for the export market. I want to advocate having this aspect investigated further. I do not want to prescribe the way in which this should be done, but what I do want to ask is that the Department of Agriculture, the Department of Industries and Commerce and the Department of Finance form a joint committee to look into these aspects. They must look into it with a view to changing the present method of protection in order to reduce the risk to the producer. It would be useless to try to place the economy of the country on a sound footing if one were stuck with a bunch of bankrupt farmers. Investigation must also be carried out in order to determine the effect of the protection measures on the means of production, and also the impact of the import surcharge.

Then there is also the 10% sales tax. The hon the Deputy Minister referred to the fact that many goods have been exempted from the 10% sales tax. But if one were to look at tractors, various implements and certain spare parts, which the farmer is, after all, obliged to purchase from time to time, items which are not exempt from sales tax, one would see that he 10% sales tax would also have a tremendous effect there. The only question is: Does it pay the State to impose this tax and subsequently adopt ad hoc measures to compensate for the ensuing risks? Under no circumstances do I wish to be critical about this, but the present drought has focussed the spotlight on this bottleneck. No one could have foreseen this drought, and if it were not for this drought, we could perhaps have continued in this vein. But the farmers are stuck with debts totalling millions of rand that they have to pay off, and how will they be able to do so if their system of production is not conducive to capital formation?

There is another aspect. We must create a sound agriculture, and this we cannot do if we neglect to give our young entrepreneurs the opportunity to enter the industry too. We cannot simply be saddled with a bunch of veteran farmers and eventually reach a stage where there are no young replacements. It has been said before that if one does not marry into wealth of inherit wealth, one cannot make any headway. We surely cannot depend on that alone. We are, are we not, also dependent on these young entrepreneurs who must be given the opportunity, without having to depend on luck, to enter the industry. It is essential for us to provide challenging competition for the foreign market because we have exportable surpluses. We can sell those exportable surpluses provided the price is not lower than the production costs of the product concerned. An economy such as this can be kept going on by profits made on the local market without the profits made on our export goods having to exert any substantial influence. Indeed it creates job opportunities and everything that entails. I therefore believe that it is in the interests of South Africa’s entire economic structure that urgent attention be given to reducing the risks.

There is another gratifying aspect to which I should like to refer. I have here the advertisement of a large tractor company announcing a reduction in the prices of its spare parts as a measure to aid the farmers in this present critical phase in which they find themselves. I have been informed that this reduction in the prices of spare parts amounts 20%. I should like to call on the rest of the private sector to follow this example.

Mr Chairman, today I should like to talk about the Meat Board’s recommendation for the expansion of its controlled area in the Western Cape. Before I get down to that I just want to say that I am sorry that the Deputy Minister is not present since he is also involved in the meat and abattoir industry. I would very much have liked the hon Deputy Minister to hear what I have to say, but I understand he sustained fairly severe losses last night as a result of the wind and the rain and we understand that, being a farmer, he quickly has to go and see what can still be salvaged.

The White Paper, which has just been made available, presents the expansion and support of the free enterprise system as one of its major objectives. The department also sets itself the goal of extending the system by means of the control boards, which have increasingly come under fire from consumer organizations, and of aiding their transformation into market organizations rather than simple control organizations. We on this side of the House have, on many occasions, propagated this goal, or the extension of this goal, and the hon the Minister himself has, over the last two or three days, given some indication that he agrees with us. It is not a matter of whether he agrees with us or whether we agree with him, but rather what he would like the system to be in the future. If one studies the White Paper, however, it seems as if the department is going to be in conflict with the Meat Board’s stated goal. I know that the hon the Minister has not been able to make a decision as yet, that he will do so in due course and that we shall perhaps, from the newspapers or even possibly in this House, be hearing what his reply to this request is. I do, however, want to state that as I see it today, with the information available to me, it does not look as if the hon the Minister should comply with those requests.

If we look at the marketing of meat—I want to confine myself to the Western Cape—the truth of the matter is that those organizations responsible for the slaughtering and marketing of meat in the controlled area have every right to market their product outside those controlled area, while on the other hand the organizations and the abattoirs falling outside the controlled area do not have the right to move into the controlled area. In other words, the wholesale organizations, of which there are only three or four, have the right to compete with each other in their own area and to move beyond their own area as well. Those outside cannot enter the area. So the organizations within the controlled area have an advantage over the others.

Then there is another factor, and that is that the Maitland abattoirs cannot meet the need for slaughtering permits. The hon the Minister himself knows that during the holiday and Christmas seasons the supply of slaughter stock far exceeds the number for which permits can be issued. This then causes prices to rocket, especially during those periods with tremendous fluctuations in meat prices.

Now I want to say immediately—and I speak as a farmer—that that farmers who, at that stage, succeed in getting their animals on the market will naturally get a very good price. Let me say, however, that for every one who does get in, there are many who do not, and those individuals are therefore at a disadvantage. It is for those farmers that the outside areas are of tremendous importance because, if one’s slaughter stock are ready for the market, one cannot sit back and wait. With regard to the Western Cape it happens that those farmers may make use of abattoirs in the Strand, Paarl, Malmesbury, Worcester or wherever. If it should happen that they do not hit the “jackpot” completely—although one should be careful how one uses such terms in this House, but the hon members know what I mean—and are not lucky enough to get the best prices, at least it is possible for them to get rid of their slaughter stock. The point I want to make is this: From he producer’s viewpoint it would be detrimental to him to have the outside areas automatically controlled unless it were to go hand in hand with getting a greater number of slaughter stock into the larger controlled area when there was a market for the product, especially during the periods to which I referred. I contend that it would be detrimental to such farmers to have the hon the Minister accede to the Meat Board’s request.

There are also disadvantages from the consumer’s point of view Firstly, consumers in the controlled areas pay terrifically high prices at certain times of the year. So those who take the trouble to go and hunt around for more reasonably priced meat, can go beyond the limits of controlled area in the Western Cape and make their purchases in the Strand, Kuils River, Brackenfell, Malmesbury, Paarl, Stellenbosch or even Klapmuts. He can thus, by shopping around, make profitable meat purchases. This could cause an increase in the consumption of red meat, in contrast to the present consumption of red meat which is specifically falling off due to the high consumer price.

There is another important aspect. Where does this application for the extension of the controlled area originate from? I cannot say for certain, but the information I have indicates that it is vested interests which almost totally control the Maitland market and which are now seeking to further their control. There are three or four wholesalers who are in the process of completely or nearly completely, controlling and manipulating the market. Naturally it is in the interests of those companies to bar the slaughterers in the outside areas and to move into their areas. It is not to the producer’s advantage, nor to that of the consumer. Farmers will not be able to dispose of their products either. I put a question to the Department yesterday. I asked, how many of the cattle and sheep slaughtered at Maitland were bought up at the floor price. The answer was only 7% and 1,6% respectively in the case of cattle and sheep. This means that the prices obtained at Maitland were, relatively speaking, satisfactory, else a much higher percentage would have had to be bought up at the floor price. So before the decision is made, I should like to ask that all the available facts first be collected and that special attention is paid to those who oppose the application. In the time still available to me, I just want to point out that one of our prominent rugby players, Mannetjies Roux, asked for this application to be turned down. I am of the opinion that he has made his contribution and that one should meet him half way. [Time expired.]

Mr Chairman, I just want to react briefly to what the hon member for Wynberg said. The Marketing Council is at present considering the Meat Board’s application to extend the area. Hon members will understand, however, that here one is dealing with a complex situation, particularly in the Western Cape. The problem has arisen, as the hon member himself said, because the Maitland abattoir is not slaughtering at full capacity. As the hon the Deputy Minister said this afternoon, this abattoir can meet the requirements of high-pressure marketing, because it has the necessary facilities and also has additional slaughter-lines. If the position in regard to the Maitland abattoir, however, remains as it is at present, a need will arise for other urban abattoirs, such as the one recently erected in Paarl. These abattoirs are erected on the strengh of pressure exerted by people who cannot obtain permits at Maitland. We shall therefore have to examine this situation very carefully. If an area were to be extended and one included butchers, but excluded abattoirs, one would be creating a situation in which the expenditure on the part of abbattoirs, now being erected at tremendous cost and remaining unutilized, would be increased, in turn creating a major problem. At this stage I do not know exactly what the Meat Board proposes to do. Hon members will realize that I cannot anticipate what the Marketing Act will lay down and that I have to say what the Marketing Council has to say.

Could I just ask the hon the Minister whether, before taking that decision, he would hear further representations from interested parties?

That all depends on the Marketing Council’s report.

I would, at the very outset, like to apologize for the hon the Deputy Minister’s absence. I know that his not being here is not a very good reflection, because he is my companion-at-arms in this difficult job. I greatly appreciate the assistance he grants me. Let me just tell the Committee that he had a great setback last night and that it is virtually only the roof of his house that has been left standing. Virtually all his outbuildings have been destroyed and he has had tremendous losses. On behalf of all of us I should like to express my sympathy to him, because it is no easy matter for a farmer to find himself in such a position. There was even some loss of life.

Mr Chairman, I have been listening to a long debate, and in the course of my speech I shall be referring briefly to as many of the aspects raised by hon members as possible. Allow me to say initially that I think that in one respect we have had some success with the White Paper. It did, at least, elicit some criticism, both negative and positive. The majority of the positive criticism, of course, came from this side of the House, and let me thank hon members on this side of the House, even at this stage, for their positive ideas. A vote of thanks and appreciation was also extended to the Ministry and the department, however, for the initiative and, let me come right out and say it, for the hazardous job we undertook in tabling this White Paper. If there is anything involving agriculture that I realize has exposed me, the department and the SA Agricultural Union to tremendous criticism, it is this White Paper. At least hon members are now in a position to determine what the most important objectives in South African agriculture should be. Hon members cannot highlight a single problem in agriculture that is not covered by the eleven objectives set out in the White Paper. I therefore think that we have properly consolidated the objectives.

†I want to reply briefly to what the hon member for Albany has said. Yesterday he referred to orderliness in the marketing of agricultural products as a result of the application of the Marketing Act. I could not get hold of a copy of his speech, but that is what I understood him to have said.

*The hon member also quoted certain examples to strengthen his case. He spoke about potatoes, pointing out what happened to this product. I think potatoes are a very good example to indicate how effectively a surplus elimination scheme can work. A scheme in terms of which a control board can handle a surplus and shortage situation is a desirable one. Potatoes are an agricultural product which, as a result of the unique circumstances involved in the production process, can be subject to tremendous price fluctuations. During the drought last year there was a miserable potato crop, which resulted in tremendous price increases, up to R12 and R14 per pocket. Consumers were up in arms. At one stage the control board asked for permission to import potatoes. The relevant permits were subsequently issued to see whether the supply of potatoes to the market could not be increased. What, however, has happened this year? As a result of the early rains we have had an exceptionally good crop. Certain areas, normally producing one or two million pockets, suddenly produced eight million pockets of potatoes. What does a control board do in such a case? It should be noted that this control board is only empowered to employ surplus elimination measures and that its product does not have a floor price. It can only employ its stabilization funds to buy up the surplus. The control board also has export powers. The first thing the control board tried to do was to remove the poorer quality potatoes from the market, and attempts were made to use these potatoes, at a loss, for other purposes, even for cattle fodder in the drought-stricken areas. When the consumers heard that we were taking small potatoes off the market, they were up in arms. What is the relevant problem? Last year potatoes fetched good prices, but now the price has dropped and surplus elimination measures must be employed. In this connection I should like to address myself to our housewives. Housewives think potatoes are still expensive, and the greengrocer also thinks that this is still the idea that housewives have. So the housewife pays high prices for potatoes. This problem applies to meat too. I think that there should be a more dynamic dissemination of marketing information so that the consumer can be kept properly abreast of market prices My point in regard to potatoes is that in my opinion the control board is doing a very fine job and that at this stage it is one of our best control boards. It is in the process of investigating its own scheme. I have here a report drawn up by that control board, and I can quote hon members passages from it. They agreed that they would have to look at certain aspects of their scheme and would have to adapt it.

Let me also point out that the method of handling meat is a very complex one. Let me just mention that this year the meat scheme in South Africa has been in existence for 50 years, being older than the Marketing Act. We have therefore been controlling the marketing of meat for 50 years now. At one stage we even controlled the retail price. That was during the war years. At the time the Meat Board appointed a whole army of inspectors to see to it that fixed prices were charged for meat. That did not work, and I am told that that was one of the reasons why the NP came into power in 1948. It is said that those inspectors were all Nationalists and that they got the people angry. Whatever the case may be, the meat scheme is one of the most complex of schemes. It is a surplus elimination scheme that also has to maintain certain floor prices. In this regard the Meat Board therefore has a dual function. I do not want to protect the Meat Board, because it can protect itself. We are in the process of investigating the Meat Board’s scheme. I want to state, however, that the Meat Board does not use its powers to apply permit control, particularly in the Transvaal, in order to increase prices. In other words, the supply of meat to the abattoirs depends on the available facilities, and in drought periods, when there is a supply surplus, there is a further aspect that has to be taken into account. We have sufficient slaughtering facilities. If meat is bought up, and use has to be made of cold-storage facilities, which are indeed limited, it must further be borne in mind that the meat has to be deboned. The meat has to be sent to deboning factories. So there are several aspects that have to be taken into account when slaughtering-stock are allowed into controlled areas. The Meat Board therefore has a tremendously difficult job. Let me say at once, however, that in my opinion the Meat Board, is playing a praiseworthy role, particularly in these difficult times. As a result of discussions we and the SA Agricultural Union held with the Meat Board, certain areas have been delineated for which they have issued permits so that farmers in the drought-stricken areas could have their stock slaughtered. And this caused many problems too, for example at Cato Ridge. In Natal the farmers do not have permits; they have quotas. Where a quota system applies, it is chiefly commerce which regulates the number of head of cattle reaching the abattoirs. A shortage of high-grade meat developed. So there is a very difficult balance that must continually be maintained, and the Meat Board is doing its job under very difficult circumstances. I should like to take up the cudgels for this control board. It has, with very good co-operation, initiated campaigns to counteract a difficult situation. It has, for example, made arrangements for emergency slaughter so that low-grade meat could be canned. The State also granted subsidies for this.

I think the hon member also mentioned grapefruit, but I think I have already replied to him about that. Let me just say that the Citrus Exchange, which deals with this product, is also one of our most efficient control boards, which has to market South African citrus products under very difficult circumstances. Let me just tell the hon member that the 2 000 pockets that were thrown away were pockets of grapefruit as big as Sodom-apples. They were so bitter one could not eat them. In any event, what the welfare organizations could take from them, they did. I therefore hope the hon member is satisfied. He cannot say that there are conflicting elements here. It is just the opposite. If we had not had these schemes, I would have liked to have seen the chaos there would have been in the potato industry and the meat industry. The same applies to the dairy industry. The control boards have succeeded, under extremely difficult conditions, in counteracting the situation.

The hon member for Ceres made a very valuable speech, and I should like to react to a few of the ideas he raised. He said that there were many major challenges ahead for the Minister and that we would all have to assist in identifying priorities, with a view to the various objectives we have set, and would have to develop relevant action campaigns. The hon member also spoke of reserves in agriculture, an aspect to which the hon the Deputy Minister gave a quite adequate reply. I think that one of our major problems in connection with the development of capital in agriculture—one of the hon members also referred to that—is the difficult struggle to which the hon member for King William’s Town referred as “the reverse trend”, which means that we shall all have to revert to a situation in which we are economically more aware and in which we shall have to produce more economically, rather than striving for maximum production. We shall have to examine the co-operative movement, and at a later stage I shall be holding discussions with that movement. We are on a very good footing because we are joint members of this movement, and I think that capital formation in agriculture lies basically with the co-operative associations and the co-operative companies. When all is said and done, they are the bodies through which the farmers can mobilize their capital, jointly and individually. One does, after all, learn from difficult circumstances. What has happened in recent years? Co-operatives have taken the opportunity of designating bonuses and levies as members’ fees because they have not wanted to pay tax. Now the situation that has developed is such that members are being credited, and the account that is involved is that of the co-operative as a company. The SA Co-operative Board is looking into the matter. They have to review their tax strategy so as to be able to generate more own capital and be less dependent on subsidized capital. What I am saying is quite a mouthful, and I am being careful in what I am saying, because a great deal of study and effort will have to be devoted to this.

I think the hon the Deputy Minister has given a quite adequate reply to the hon member for Barberton’s speech about the question of the moratorium, which is a very sensitive matter. I should like to add that if the scheme that we announced yesterday does work, and we have the necessary rain and favourable climatic conditions, I do not think it will be necessary to implement the legislation to which the hon the Deputy Minister referred, because that would be a blow to agriculture and to the rural economy. I think that the hon member, who is a legal man, knows what the implications of such a measure are.

The hon member for Ladybrand touched upon a very sensitive matter here, ie the ownership of an excessive amount of agricultural land. I think that the words the hon member used were “oormatige besit van landbougrond”. The hon member for Queenstown also touched upon this matter, and I also want to include him in this. We have come to the point, in regard to the ownership of agricultural land, where there are people whose pieces of land are too small, whilst there are others whose pieces of land are too large. Those whose pieces of land are too small, cannot realize their properties, because once they are finished doing so, there is nothing left. Those whose pieces of land are too large—the majority of them, although one should not generalize—will not be realizing their pieces of land, because they have purchased it as a kind of investment to serve them as a hedge against inflation. The problem lies with those individuals who lie between these extremes. If they were to start realizing their assets, they could perhaps have enough left over to live on if one kept land prices at their present levels. The hon member for Queenstown said that we should think in terms of some form of land tax. That is a very sensitive issue, but he mentioned it in the House today. I should now like to know from the hon member whether he wants us to examine that possibility? Hon members will realize that here we are touching upon a difficult issue. I would like to build up some collective responsibility on this issue. One could possibly solve the problem of pieces of land that are too large by having a differentiated method of taxation, because people with smaller pieces of land would be taxed less heavily, with a kind of escalation clause operating in proportion to the size of the piece of land. That is the kind of solution one should be looking for. If one were to develop methods by which to achieve some of the aims set out in this White Paper, it could mean making use of very radical methods. If the hon member is saying, however, that we should have a look at this, I shall discuss the matter with the SAAU.

We are also in favour of that.

Is the hon member also in favour of that? Then we have even more individuals.

In his customary fashion the hon member for Mooi River made a very fine speech, and one of this ideas I found very stimulating and I should like to say something about it.

†The hon member said that the White Paper of 1946 was much more dynamic. Well, this point I will grant to the hon member because during that time his party was in power in South Africa and the Minister of Agriculture at the time was Advocate J G N Strauss. I do not blame him, Mr Chairman. [Interjections.]

*In his customary fashion the hon member referred to a few very important aspects. He said, amongst other things, that we should expand our extension services. Let me tell the hon member that that is one of the aims one of the aspects, we shall be coming back to at a later stage. At the moment I am still awaiting the findings of the Commission of Inquiry into Agricultural Services. I understand that the report is now ready, and we shall have to see what transpires and whether we cannot perhaps obtain a greater degree of rationalization in the field of agricultural services in general.

The hon member Dr Odendaal spoke of part-time and tenant farmers. Let me agree with the hon member that that is a field we shall have to exploit further in South African agriculture. I want to state that the 28% of the farmers about whom I spoke yesterday—the 7 000 farmers—largely comprise tenant farmers. They are not part-time farmers, but tenant farmers, in other words people who have a small piece of land, but actually rent twice as much land as they own. They are, however, good producers. I myself—and I also think many other hon members—have rented land, and the most profit I ever made in my life in agriculture was made out of rented land. It is therefore quite an attractive kind of proposition if one’s object is production. On the other hand we must also leave it to those who do the financing, the co-operatives, the Land Bank and Agricultural Credit, to be more prescriptive in regard to the leasing contracts they make available. I think that in certain respects the tenant farmers should be much more operationally effective because they do not have all that much security to back them up. I do, however, want to agree with the hon member that that is an aspect we shall have to look into. Part-time farming is also an aspect we shall have to consider, because it is something that is developing in South Africa, particularly in rural areas where there is also industrial development, as in the Eastern Highveld where one has the Sasol installations and the power stations. I know of a tremendous number of young farmers who farm on a part-time basis and do part-time work at the factories. I must say that the Land Bank treats these young farmers very sympathetically. When droughts and other problems occur, they give such individuals the necessary exemption to take up temporary employment. Hon members will realize that the conditions governing loans provide that the borrower must live on the farm and work it. We are very grateful for the relevant help the Land Bank furnishes.

The hon member for Bezuidenhout is not here at the moment, and I do not know whether he will be attending the debate at a later stage. Yesterday the hon member for Lichtenburg expressed very strong sentiments about the fact that not enough assistance was being granted to the farmers. I just want to confirm the fact, however, that the continuous drought-aid that we granted—holding a series of meetings in the process—and the additional assistance granted by the Government will cost R300 million. What is more: The State is guaranteeing the schemes, which the Land Bank is now making available, to the tune of R800 million. I can therefore say that what we are now speaking about is an amout of approximately R1 100 million, which is quite a tidy sum that is involved in the overall process. Apparently, however the hon member did not know that we had succeeded in getting this scheme off the ground, because otherwise he would not have made this statement.

The hon member for Soutpansburg apologized for the fact that he could not be present, but certain of the aspects he mentioned have already been replied to.

The hon member for Prieska spoke about our resources, and this is a matter that we should take a very serious look at. Then the hon member for Bryanston took the floor. He is not here either, but I shall nevertheless react to what he said, because he gave a very dramatic performance. It is, of course, a simple matter to wax lyrical or be dramatic about the Soil Conservation Act. The finest speeches I have ever heard in connection with agriculture have been about soil conservation, and specifically the Soil Conservation Act. My maiden speech in the House of Assembly in 1966 was specifically about soil conservation. It is a wonderful subject to speak about, but as the hon member for Mooi River has said, it is very easy to set a goal or have an ideal, but to reach the goal or realize one’s ideals is not that simple. And just talking about the physical aspects of soil conservation will not get one anywhere either. Hon members will recall that in the ’fifties there was a period in which we went through a soil conservation craze in South Africa. We built contours, erected fences and built camps, but when we had to relate the farming units to the extension of the new infrastructure we were developing, we saw that the camps were either too small or too large or that either something was wrong with the water supply or it did not run out at the contours. The point I want to make is this: Together with the physical aspects of conservation in farming, there is also the economic utilization of the soil. Let me refer to a further example: As a result of the drought we experienced—and this is another aspect from which we should learn a great deal—the question of carrying capacity has again become an issue. The hon member for Soutpansberg is not here at present, but in his area the average farming unit is between 1 800 ha and 1 900 ha in extent. If one were to determine the carrying capacity for this area, one would find it to be approximately 18 ha to 19 ha per large-stock unit. Let me assure hon members that it is neither humanly nor economically possible to make a living with only 100 head of cattle. Hon members must realize that the proper implementation of the Soil Conservation Act—and the hon the Deputy Minister stood here with the very means to do so in his hand—is a socio-economic issue, because one can disrupt people’s living conditions by obliging them to keep uneconomic herds. It is therefore not all that simple, but I am not saying that we should not do so. I am just saying that it is not all that simple.

The hon member for Schweizer-Reneke spoke about regional development, and the hon member for De Aar also referred to that. They spoke of regional development and the role that agriculture played in this. The hon member made the statement that agriculture was not being accorded any decentralization benefits. At present the Government is investigating a scheme in terms of which one can specifically accord agricultural cooperatives decentralization benefits. The argument is—and I think that for this argument the SAAU eventually succeeded in convincing the Decentralization Board—that one should ensure that the processing takes place at a point where the raw material is available and that the benefits should be granted there. Amongst other things one should also grant benefits in regard to the outgoing costs. Mining is a very location-bound industry, but in the case of agriculture it is possible for one’s processing installations to be situated far from the markets, and this means that the in-going costs would be low whilst the outgoing costs would be high. At present the Government is seeing to what extent—it will cost millions of rand—payments can be made, by way of rebates, to give a more positive complexion to outgoing costs to the markets so that processing installations can be established. That is another example of interference in the free market. The situation in South Africa is such, however, that there must be some or other form of interference in the free market, because otherwise we would have, not a free market but a chaotic one. We are therefore looking into this, and it is hoped that the hon the Minister of Industries, Commerce and Tourism, who is responsible for this matter, will shortly be making a statement about this.

The hon member for Beaufort West referred to the fact that maize had become so expensive. He claims that after the price increase the same amount of money buys him 78 fewer bags of maize. That is how farmers tot it up. There are problems relating to grain products, particularly maize, for which we have to pay the import price. This year more than 40% of all the maize is being imported, and we cannot therefore give this problem the necessary attention and subsidize maize any further. This year these subsidies will be costing the Government between R100 million and R170 million. Hon members know that the hon the Minister of Finance has problems.

My time is limited, and I now want to refer to the remarks made by the hon member for Pietermaritzburg South. He referred, amongst other things, to the question of a futures market. I am not in any position to give an adequate reply. We do, however, know what goes on in the futures markets. The Maize Board officials recently visited Chicago in the USA to study the futures market with a view to making advance purchases, to entrench their position, in the hope that the American crop, which comes in in September and October, could perhaps be bought up at a lower price. Yesterday, by way of interjection, I told the hon member that one of the problems was the problem of insufficient volume. One of the requirements for a futures market is that there should be enough buyers and sellers, and in addition one should also have a large number of speculators. The speculators actually carry the risk between the point of purchase and the point of sale. I do not know whether there is a product on the South African market in regard to which there are a sufficient number of these elements. In this connection one possibility is perhaps the Meat Market. We are, in any event, conversant with the operation of a futures market, and the situation will again be scrutinized at a later stage.

That is all I want to say for now.

Mr Chairman, I cannot recall if an hon Minister of Agriculture has ever had to perform his task under more difficult circumstances. Hon members, and particularly hon members on this side of the House, think that he is performing his task extremely well and we want to wish him everything of the best for the future.

I want to concentrate on goal 8 of the White Paper on the agricultural policy. This goal is specifically aimed at optimum participation in international trade in agricultural products. It points out that owing to its position here the southern point of Africa, and more specifically in the Southern African context, South Africa in the past played a very important role as a supplier of food to the subcontinent, and that in future this would have to be done to an increasing extent.

The White Paper then makes a very interesting point, namely that we shall only be able to do so and continue to do so if we can dispose of our products economically. I want to add something to this eighth goal, namely that I personally feel that we must make far greater use of our surplus food production to help us to gain access to Africa.

Yesterday the hon the Deputy Minister also referred to this, and I think it is a tremendously important point in our entire future strategy.

Around us there are several countries in which there is severe famine. Frequently South Africa exports surplus food to foreign countries at very low prices. I think serious consideration should be given, through membership of the World Food Assistance Organization, to taking our place as the supplier of food to Southern Africa. This not only has advantages for Africa, but also specifically for us.

If one considers the way in which the EEC countries subsidize their agriculture, I frequently wonder whether subsidized food to our neighbours in Africa would not greatly facilitate the task of our diplomats. Frequently we have surpluses of certain agricultural products in South Africa which owing to circumstances simply cannot be exported at that stage. At present, as a result of droughts, the Maize Board and the Wheat Board do not have surpluses, but in the past we frequently had to export our surplus production at very low prices. The Dairy Board has milk powder to the value of R30 million for example. The hon the Minister also referred to the surpluses of the Potato Board and the Meat Board—as far as red meat was concerned. I believe that we can win more friends by providing food for hungry people than in any other conceivable way.

Our agricultural exports are a very important earner of foreign exchange. One quarter of our total exports come from agricultural production. Arising out of the basic requirement that we sell and in particular export our agricultural products economically, I should like to refer to a few specific problems that are being experienced in the wheat industry. For many decades now—actually since the turn of the century—South Africa has been an importer of wheat. Since the world price of wheat at the time was in fact higher than its local price, there was sufficient motivation to encourage local wheat production by means of price adjustments. But the situation has now changed. South Africa is now self-sufficient as far as wheat is concerned, but the input costs of the producer have increased steadily owing to inflation, with the result that price adjustments have now priced South Africa out of the market completely as far as exports are concerned. Today the wheat industry is at the crossroads. On the one hand we would like to see South Africa remain self-sufficient as far as wheat production is concerned, while on the other hand we have no choice but to take cognizance of world production and prices.

Any price policy must be introduced in such a way that it will keep an industry permanently viable. If this tenet were to be applied to the wheat industry, there are three basic requirements that have to be met. In the first place there must be a market; in the second place the producer must be kept in production; and in the third place the price must be such that the market can afford it.

At present the world wheat market has a production of 486 million tons and a consumption of 470 million tons, which are very close to each other. The surplus is consequently very small, but there is a surplus reserve of approximately 120 million tons, which complicates the situation tremendously. This is causing world prices to drop. On the other hand the situation in South Africa is that input costs have soared to such an extent as a result of inflation that the price the wheat farmer receives today is R275 per ton. Whereas the difference between our price and the world price ten years ago was R10, it is R120 today. Our price is R275 as against the world price of R155.

A golden mean will have to be adopted to keep the producers’ prices as realistic as possible while at the same time not pricing the product out of the market. I am not a farmer myself, but I grew up in this industry. In future the successful farmer will have to seek his salvation in relatively high productivity, particularly in the wheat industry, because productivity or yield per hectare determines the price of wheat in the international trade. The American price is virtually half our price, but the Americans produce more than twice as much wheat on the same area The result is that their yield is as high if not higher than ours, although the price is far lower. Although our basis for determining prices therefore differs from those of other countries, because we place more emphasis on self-sufficiency, we cannot neglect to give attention to the factors determining the international price of wheat. One of these factors is yield per hectare, and for this reason we shall have to keep on striving to increase our productivity.

In conclusion I want to refer to the interdependence of the two basic staple food industries in our agricultural industry, namely wheat and maize. In the northern provinces in particular there are a great many farmers who produce both wheat and maize. Recently the idea has taken root that some of these farmers were told to concentrate on wheat production rather than on maize production. By the end of last year the Wheat Board had already decided that it did not want to apply quotas in respect of wheat production. If certain production measures are applied in the maize industry which will spill over to the wheat industry and aggravate the problems there, I foresee the problem that similar measures will of necessity also have to be considered. I want to issue a warning and say that developments in one industry could have a definite effect on other industries, at primary, secondary and tertiary level, and our decision-makers will have to consider all these factors with great circumspection.

In my opinion many of the problems in the wheat and maize industries, particularly in respect of overproduction in good years, can to a great extent be solved by the matters which may arise from the Southern African peace initiatives. This could lead to brand new markets becoming available to South Africa, provided the vital price problems can be accommodated. In my opinion there will have to be far closer liaison between the hon the Minister of Agriculture and the hon the Minister of Foreign Affairs in this connection.

Mr Chairman, it is good to listen to an hon member like the hon member for Paarl because he is a man who knows his subject. He referred to food surpluses only, but the Bible says that man cannot live by bread alone. There is also a wine surplus and he must please remember that too.

Although there are so many prophets of doom nowadays, I do not think agriculture is doing all that badly, as long as we do not lose hope. I want to tell you a story about the couple who had been married for 12 years and then consulted a marriage counsellor. They said that they were not on speaking terms and wanted to separate. The counsellor then asked where their three children came from. They replied that they were not all that angry with each other. Consequently agriculture is not doing all that badly either, as long as we do not give up hope. Mr Chairman, I want to start with what is stated in the White Paper on agriculture. I am quoting:

to promote stability in the Republic of South Africa. What is most important is that in this way a contribution will be made to promote a sound farming community.

Mr Chairman, there are valleys and valleys. If one travels from the north and goes over the Hex River mountains, one then descends into the Breë River valley. Here from the south, where we are now, one goes over the Du Toitskloof mountains—one must not try to do so this evening though; it is rather wet there. Sometimes one is lucky enough not to encounter heavy traffic there. On other occasions one has to creep along at a snail’s pace behind a long row of trucks. Those trucks are crossing the mountain to collect food and drink in that Breë River valley. From 1988—the State has said 1988, but I say one should add a year to this—one will be able to use the Du Toitskloof tunnel to reach the Breë River valley. Then one is in the land of Canaan.

As far as this valley is concerned we are proud to be able to say that we are trying to make a contribution towards establishing a sound farming community there. The cream of South Africa’s population lives there. These are people rich in culture who have been establishing culture and agriculture there for more than 300 years. I am now referring to the region which begins at Ceres at the top and ends where the Breë River flows into the sea at Swellendam. There are three very important constituencies there, namely, Ceres, Worcester and Swellendam. That already says a great deal.

This valley is mainly an irrigation farming area and when people enter the valley and see this green oasis, they find it hard to believe that this beautiful valley has a serious water shortage. Nowadays, on arriving there one would never say so. Fortunately this valley has the right material—people with experience in irrigation and people who have owned and loved this land over the years. These are people who respect their wives who have stood by them over the years. I am able to state categorically that in our part of the world, the Breë River valley, we do not shoot or beat our wives; these are good farming folk.

Mr Chairman, the people living in that valley would like to make their contribution to the country’s economy and the establishment of a farming industry. We have good land in abundance and we have the right product. There is only one thing we long for and that is water. Water does not fall under the discussion of this Vote, but the shortage of water in that valley has become such a real problem that we cannot make progress and realize our potential if we do not get water now or in the near future. The hon the Minister can convey this message during the discussion of that Vote; then I need not discuss it again there. [Interjections.]

The Breë River valley is one of the oldest development areas in South Africa. We have a good climate; we have a great deal of agricultural potential which has played an important role over the generations. It has played a role in the establishment of culture and it has played an important role in the economy of the country as an earner of foreign exchange and as a tax contributor. We are entitled to endeavour to develop this area to its full potential and we are trying our best to do so with the stability and the expertise of our people. In future this valley will play an even more important role in the interests of South Africa and its people.

At the moment the Breë River valley is the biggest producer of wine; 75% of the export table grapes also come from this area. In addition there is no branch of agriculture in the Western Cape that is not being successfully pursued in the Breë River valley. It is indeed a wonderful place, and we owe this to a group of older farmers, and particularly to an excellent team of younger farmers who are not only active on the farms, but who also take an active part in oraganized agriculture. It is significant that where there is an active farmers’ association, farming is being practiced far more successfully than it is in the area of a neighbouring farmers’ association, for example, which is deteriorating. These people do not rely solely on their own knowledge when farming. Land is too expensive for this and every piece of land has to be utilized. This can only happen if knowledge is exchanged. Where is there a better opportunity for this than in a farmers’ association and on farmers’ days and the introduction and use of extension services provided by the Department of Agricultural Technical Services? And after the proceedings, once we have started on the meat and the good wine of the Breë River valley, there is nothing we do not solve!

Mr Chairman, I would be neglecting my duty if I did not thank the department for its excellent extension service and for the calibre of people at our disposal on behalf of the people of that beautiful valley. I do not know what the position is elsewhere, but if farmers are willing to use these people and to rely on them, there will be far better results. I say one should make use of them; their services are free.

I also want to tell you that it is not all moonlight and roses in the Breë River valley. A great many of our farmers are also battling. I want to appeal to the authorities to lend a sympathetic ear to the farmers of the Breë River valley. If one looks at the farmer of the Breë River valley, one will find that we never become fractious. At the moment we also have to contend with surpluses and high production costs in our farming. But the land from which we spring, with its balanced climate has also given us a balanced outlook on life. Surpluses and high production costs will compel us to approach the authorities one of these days. But together we shall weather the storm; we shall not give up. This is the message we are also trying to convey to the younger people. It is worth while to farm in the Breë River valley and in the rest of the Republic of South Africa too.

Mr Chairman, thank you for also giving me an opportunity to say a few words in this important debate. It is indeed an important debate because it is concerned with wonderful people, namely the farmers of South Africa. They are wonderful people because they have been richly blessed with three splendid qualities—faith, hope and trust.

Mr Chairman, the farmers in the north, in my constituency, are accustomed, after the north wind has been blowing incessantly for about three days, to the rains coming on the fourth day. That is when they do their sowing. It is then that their faith, hope and trust sustain them. I believe that these qualities, together with the aid they will receive—as announced last night—will see the farmers of South Africa through this critical year.

Mr Chairman, my short speech centres chiefly around three expressions of thanks. Firstly, I should like to address a word of thanks to the Land Bank. I was pleased to hear yesterday that the Land Bank will be instrumental in making what the hon Minister announced yesterday available to the farmers. It is always a pleasure to do business with the Land Bank and its people. When one has a request to make of them, regardless of the answer one still leaves in a good mood. As I still have a few requests which are being considered by the Land Bank it does not mean to say that I am now advocating a friendly refusal. Someone once said that you get two kinds of people: If the one gives you a rude and unfriendly positive answer it is more difficult to stomach than when the other gives a negative answer in a friendly manner.

Mr Chairman, to get back to the matter we are discussing I should like to quote from the Land Bank’s annual report. It deals with aspects of agricultural financing, and I quote:

Mr Chairman, I want to dwell for a moment on the concept of “employer”. Yesterday the hon Minister mentioned those 7 000 farmers whose disappearance from the agricultural scene would be catastrophic for South Africa. I made a further calculation and argued that even if each of them employed only 15 labourers, their disappearance from agriculture would result in the loss of 105 000 adult farm-workers.

One could make yet another calculation: If one accepts that each of these 105 000 labourers are householders and each has five dependents—wives and children—it would represent a loss of 525 000 people along with the 7 000 farmers. They are people who will have no livelihood. It is here that the South African farmer plays an important role in the labour market and the economy of South Africa.

Mr Chairman, I made one more calculation. Is the part the South African farmer plays with regard to housing members of the other population groups in South Africa not very important? Lets say for argument’s sake that there are 70 000 farmers in South Africa, each employing 15 labourers. A house is made available to each labourer. This 70 000 multiplied by 15 gives you a figure of more than 1 million houses which South African farmers have provided for their non-White employees. One can hardly comprehend what this means in monetary terms. However humble some of those dwellings may be, they still provide accommodation and a roof over the heads of those labourers. I would say this accommodation could be worth a few hundred million rands. The South African farmer provides accommodation here just as the State does for urban employees.

Mr Chairman, I also want to thank my colleague, the hon member for Barberton. He moved a motion in Parliament on Friday, 9 March 1984 and I quote (Hansard, col 2671):

Mr Chairman, my third word of thanks goes to the hon the Minister. In the same debate on the motion of the hon member for Barberton the hon Minister replied to him and, amongst other things, had this to say (Hansard, col 2710):

I should like to thank the hon the Minister in particular for the fact that the words he used on 9 March 1984 in reply to the motion, and which are recorded in column 2710 of Hansard, were given substance in the promise he made to the South African farmers yesterday, which we had the privilege of listening to here.

I should also like to associate myself with what the hon member for Lichtenburg said in that same debate. We hope that these relief measures will help to extricate the farmers from their oppressive situation. It is possible however, that all their problems cannot be solved and of course serious problems could crop up again in the future. With this in mind the hon member for Lichtenburg suggested during the debate that the commercial banks too be requested to act in a responsible way when their clients, the farmers, were in financial difficulties. Unfortunately I do not have enough time at my disposal to quote all of what he had to say in this connection at the time, but I have a newspaper report here with sketches, and the caption reads: “Elf grotes beskik oor 16% van Suid-Afrika se bates”. Two well-known banks, Barclays Bank and Volkskas, are amongst these 11 and in this regard I want to confirm what the hon member for Lichtenburg said, which in fact boils down to this: In times of crisis when farmers are in financial straits, banks should realize that it was the farmers who, in prosperous years, were their major clients and made them what they are today and that they should consider making operating capital available to them at 8%, this retaining them as clients, rather than losing them by providing capital at 18%, 20% or 22%.

Mr Chairman, I have complete confidence that the fine qualities of the farmers will see them through the crisis. I want to raise one more point, however. I predict that, as a result of the drought and the critical conditions, an enormous red meat shortage is going to develop in South Africa in the next few years, which of course be to the advantage of those farmers who have stock to sell. What I should like to know, however, is whether the Government has foreseen this problem and whether it knows what precautionary measures to take.

Mr Chairman, the hon member for Maitland said something with which I am sure every farmer has to agree, namely that the qualities of this good nation, the Boer nation, can be summarized in three words: faith, hope and trust. These are surely good qualities, but one would also like to add politics and agricultural politics, but not in the sense of party political differences. If there is one quality this Boer nation surely has, it is in my opinion their unanimity in furthering agriculture and recognizing the purpose and value of agriculture in South Africa. This is what I should like to call agricultural politics.

The hon member for Paarl concentrated on the grain industry in his speech, and spoke of its value as export product and as food for Africa. He spoke as an expert because, in earlier years before he came here, he was manager of SASKO, a big enterprise concerned in a big way with wheat and wheat products as well as the processing of wheat. Today he is still a member of the Wheat Board, and one could therefore expect him to have specialized experience, as was also clear from his speech. He made a very good speech and I am pleased to follow him because I also want to talk about the cereal industry, but more specifically in my capacity as a cereal farmer.

The most important agricultural function of any country in the world is to provide its people with the food they need. If we look at the White Paper on the agricultural policy that was recently tabled, we find that the following was said regarding this aspect:

This is the food need:

I should like to associate myself with this and, as a further example, point out that as the leading country in Africa South Africa has tremendous potential for helping Africa. In addition South Africa has surplus food as an ally in the struggle that is being waged against it, for if we in South Africa did not have surplus food and had to rely on food imported from other parts of the world, we would have been very vulnerable. However, I do not have to tell hon members this because they know it. What is in fact more important than food? I therefore want to agree with the hon member for Paarl that in order to keep Africa on South Africa’s side we have to do everything possible to feed Africa.

The approximately 70 000 farming units in South Africa succeed very well in ensuring that we are able to help feed Africa, and what is remarkable is that the food is often produced under very difficult circumstances and at high risks. The South African farmer’s efforts are often impeded by droughts, floods and unstable weather conditions. If we think of the terrible drought that our farmers experienced recently, nobody can doubt this. If we think of the severe floods that followed and partially broke the drought; if we think of last night’s storm we realize what problems farmers have to contend with. For example, I cannot make contact with the little town of Ladysmith because all the telephone poles were blown down. According to a message I received, chaos is prevailing there. The roofs of more than 40 houses were blown off and the streets are littered with tree branches, etc. One shudders to think what the effect of such a storm will have been on the tree plantations, orchards and vineyards. As soon as we are able to contact those afflicted districts again we shall ascertain what the situation is there.

The wheat industry was not hit to the same extent by the terrible drought of the past two years as certain other agricultural sectors; in fact record wheat crops were harvested during the preceding two seasons. The total wheat purchases of the Wheat Board for the 1983-84 season are estimated at 1 655 000 tons. During the previous season, the 1982-83 season, the board purchased a record amount of 2 285 000 tons of wheat. The Cape Province, which produced record crops during the past two seasons, again produced a good crop of 830 000 tons this year, compared with last year’s 888 000 tons. The drop of 630 000 tons in this year’s purchases compared with last year’s is mainly due to the poor crops in the Free State and the Transvaal as a result of drought conditions. Because of the stable production of the South Western Cape, in other words, the Swartland in the west and the Rûens area in the south, this region is of strategic importance to the country as a winter wheat production area. In favourable conditions the northern provinces produce more wheat than the Cape Province, but it is especially in unfavourable conditions such as those of the past year that the value of the Western Cape as a production area is realized.

At present the Republic’s average annual wheat production is more or less equal to the annual wheat consumption. The hon member for Paarl also pointed out that because of the high inputs and the low yield per hectare, the South African producer cannot produce wheat for the world market on a competitive basis. At approximately R170 per ton on the basis of current world prices therefore, surpluses can only be exported at great losses. So the logical deduction is that in future we shall have to look very carefully at the adjustments in the price of wheat on the basis of the estimation of production costs. If it should happen that maize producers were to change over to wheat production on an appreciable scale as a result of the possible marketing quota system and this were to lead to overproduction, it could do great harm to the wheat industry within the space of a single year. It is therefore of great importance to the cereal industry that an equilibrium should as far as possible be maintained between production and consumption. This is a mouthful because I really do not know how on earth one is supposed to do this without driving farmers into two opposing camps. In this connection one will, however, have to give serious consideration to the stabilizing of cereal production. A method will have to be found to prevent the occurrence of large-scale fluctuation in production, and I think that this is the biggest problem the grain farmer has. It is difficult to conceive how one will be able to eliminate this in practice, for one year a farmer will have a record crop and the next year a bad one. It is extremely difficult to maintain that equilibrium on a wheat farm under such circumstances, and now I am speaking as a practical farmer. It is difficult to budget; it is difficult to estimate. It is difficult to buy implements and, as the hon Deputy Minister said, one year you over-capitalize in order to avoid income-tax and the next year you are in real trouble because you do not have capital. I therefore do not know how we are going to do this, but we will have to put our heads together to find a solution to this problem with which the wheat farmer is struggling.

The fact that the higher input costs are taken into consideration in the determining cereal producer prices is justified by the more stable yields of the Cape cereal producers, and in future this principle will have to be maintained. It is, as the hon member for Paarl also told me, the outside funding, but it is also a fact that the input costs of the Cape wheat farmer are higher, considerably higher than those of farmers in the Transvaal and the Free State. If our input costs are not regarded as the basis in determining the wheat price, we are being forced out of the wheat industry because we can then no longer afford to farm with cereals such as wheat, barley and oats in the Cape. If, however, it were to happen that we have to pull out, and the price of wheat drops as a result of the fact that the price is determined on the basis of Free State and Transvaal input costs, we shall not be able to prevent more and more farmers from starting to farm with maize because their income per hectare is then likely to be higher. [Time expired.]

Business suspended at 18h30 and resumed at 20h00.

Mr Chairman, I should like to deviate a little from the usual topics, but I also want to associate what I have to say with the White Paper on the agricultural policy. I want to discuss the importance of and the problems in the wine industry. The wine industry covers approximately 100 000 ha. It is an industry in which the producers have invested approximately R1,55 billion. It has a production of approximately one million tons, which provides the producers on the farms with approximately R220 million.

The industry is responsible in particular for the economic viability of eight districts in the Western Cape. Inter alia it provides work for approximately 300 000 people. At the same time this industry has retail sales to the value of approximately R1,5 billion. Of this amount approximately R175 million flows back into the Treasury in the form of excise duty.

Over and above the purely financial side of the industry it is also a tourist attraction. It is interesting that approximately 250 000 people visit the various wine institutions every year, of whom approximately 40% are foreign visitors. The KWV entertains in the vicinity of 2 000 of these very important guests every year.

To crown it all, more than 90% of the total production is marketed locally. This means that this industry fully complies with the general aim of self-sufficiency stated in the White Paper. This industry, which we consider to be a wonderful self-sufficient industry, and which has kept itself healthy over the years by disciplining, regulating and organizing itself, is at present experiencing serious problems. Perhaps this could be attributed to the image of self-sufficiency, culture, affluence and so on, which have contributed to everyone believing that this is a wonderful industry, so much so that even the Treasury believes this.

If one looks at the White Paper on the agricultural policy and at the production goals set, one finds that the wine industry is pre-eminently successful in achieving them.

In respect of the optimum use of resources six steps are spelled out which the industry complies with very well indeed. A second goal is the preservation of agricultural land in which the wine farmer has been fruitfully engaged for decades now. In the third place it deals with the maximum number of well-trained and financially sound owner-occupant farmers. I should like to return to this later. Finally there is the optimum use of labour, which I think these farmers probably do as well as anyone in the country.

As far as marketing goals in the White Paper are concerned, there is the outstanding goal of the pursuit of orderly marketing, having due regard to the principles of the free-market system. I think the wine industry is also pre-eminently successful in accomplishing this.

Under the general aims there are two very important ones with which the industry undoubtedly complies. In the first place there is optimum participation in international trade and in the second place there is the industry’s contribution to regional development. If the industry is so well regulated and so well organized and complies with the ideals of the White Paper in so many respects, why have I said that the industry is not doing too well and why have I said that the wine industry is one of the few industries that has some of the best trained farmers, but does not comply with the goal of financially sound farmers in other respects? There are many problems which have led to this unhealthy position of annual deterioration. Let us look at a few of the most important problems and possible solutions to them. In the first place the excise duty on a bottle of brandy is R2,70, for example,—and we feel that this is more than the product can bear. I admit at once that this does not belong under this Vote, but I do feel that this should be mentioned as the most serious problem in the industry. The fact remains that the 1981 increase in excise duty dealt the industry a death blow and this is still the case, because even now, three years later, sales are stagnant.

The South African wine farmer is competing with the wine-producing world on more than 30 markets abroad, and they are even competing with wine producing countries in their own countries against their own products—and this without any State subsidy. Nevertheless it is permissible for foreign wines to be imported at prices which are definitely subsidized by their countries of origin. There is adequate proof of this. In addition whisky is in a privileged position to be imported here at prices which make one extremely suspicious about GATT agreements.

In addition it is also a fact that in the main export incentive measures amount to income tax concessions which this industry with its co-operative set-up, cannot really benefit from. It is true that none of these problems can appropriately be discussed in this debate. I admit this, But I want to make the important statement that the wine industry is an agricultural industry, and that is why I am mentioning them here. During the past eight years, up to 1983, this agricultural industry has allowed the producer price of distilling wine to rise on average by only 5,7% and the producer price of noble wine on average by only 10,2%, per year, whereas production costs rose by 14,5%, agricultural inputs by on average 15,6% and the consumer price index by 12,9% per year—indeed a wonderful achievement by this industry. Consequently one is justified in asking that the interests of an industry that does so well under all circumstances should be looked after, in spite of the problems it is experiencing. I should like to raise this point here. It is true that at the moment urgent attention is being given to the situation in connection with imported wines and these cheap whiskies I referred to. I also want to express thanks and appreciation on behalf of the industry for what is being done, but the cry of distress is that finality must be reached soon and that urgent action has now become essential.

I want to ask a question now. On page 9 of the White Paper the following is stated:

It is no use stating this in a White Paper if we do not implement it soon. In the same way it is no use our saying in the same White Paper that “suitable steps (shall be) taken to protect agriculture against unfair foreign competition” if we do not do so urgently and immediately.

What the wine industry is consequently asking for is that urgent attention be given to excise duty, the completely unfair competition from surplus products from abroad and more suitable export promotion measures for this specific industry. If I may, I want to ask that immediate steps be taken in this regard. Only then will this proud industry be able to hold its head high again.

I want to repeat that most of these measures are not relevant in this agriculture debate, but I do want to state that support and assistance from the Department would be greatly appreciated by this industry.

Mr Chairman, I want to resist the temptation of speaking about the KWV, but I do want to say that that hon member must realize that the people in the wine industry are so efficient that they actually have overproduction. He must also remember that he cannot ask the Government to stop people from importing goods at subsidized prices and, in the same breath ask them to help us to export our surplus, because I think one should be careful in that regard. However, we have sympathy with the wine farmers. They form a very efficient part of our agricultural community. I think their real problem is that they are so efficient that they put too much wine and too much alcohol on the market.

The hon member for Queenstown said that he was flinging a stone into the undergrowth. If one flings a stone into the undergrowth, one usually does so to flush out a snake, but it seems to me that a beautiful bird has been flushed out because the hon the Minister said he would look into the possibility of land tax. I just want to confirm what the hon member for Pietermaritzburg South said. We do not want to say that we will necessarily support the principle, but I think an investigation could be useful, especially if one looks at the problem that has emerged during this debate in respect of the financing of farming operations, and that is the fact that the farmer has the problem that he is dependent on nature. There are years of drought, years of plenty and years in which little success is achieved because of the climate. For this reason the hon the Deputy Minister did suggest that perhaps the farmer should invest his profits with the Land Bank in order to build up a capital reserve there. Perhaps this question should be looked at in conjunction with the question of land tax. Of course the White Paper says that horizontal extension has limited possibilities whilst vertical extension should be supported. Of course this is what land tax would be aiming at because it is a fact that in many cases a smaller farmer farms better than a very big farmer. However, this is also a generalization and I think one should consider this aspect as well.

The annual report of the department is a very good one. It has been set out very well and I must compliment the department on it. Incidentally, I also want to compliment the department on its bilingualism although I am perhaps not a member of the Afrikaner people the hon member for Swellendam mentioned just now. The department is always fully bilingual and virtually everything it produces is available in both official languages.

Are you satisfied with the White Paper?

Fortunately it has also been printed in black ink.

In the White Paper information is furnished in regard to the border areas where they want to augment the population.

†There were 22 applications approved for the purchase of land and implements. They also give a list of how many were paying their debts, but there is nothing about the money that was granted. There is just a blank, which seems somewhat curious. What has of course happened, however, is that because of a subsidy to people who want to buy land in the border areas the price of land has rocketed. That simply indicates what happens when one distorts the financial structure of any industry, because the farmer who is selling land on the border and who is sitting in the city knows that that man can get land at 4% and he will therefore make him pay a higher price.

Mr Chairman, I want to refer very briefly to the White Paper. I believe there is an aspect in the White Paper which ought to be stressed. I am pleased to see that the department is starting to use the terminology “natural resources”. Surely the White Paper relates to the terminology “natural resources” in the context of commercial farming as opposed to subsistence farming. I think that it is unfortunate that the White Paper does not at least refer, in strong terms, even if it cannot deal in length with it, with the need to assist commercial farming, in what I would like to call the communal areas of South Africa—where we have peasant farmers in most cases, farming at subsistence level, under a poor form of land tenure. As the White Paper points out we have very limited high potential agriculture land in this country. Certainly very limited land of that quality under high rainfall. Much of that is at present under communal ownership. I believe that it is important, if we are going to develop our agriculture to deal with the feeding of our population, to concentrate on introducing commercial agriculture into our communal areas and Black areas. That means that we have to concentrate on land reform; we have to concentrate on extension services, on the kind of financing to motivate these people to farm, and also a decent marketing structure. In Natal, in the last century, a very substantial number of Black farmers, who had freehold land, made a large contribution to the agriculture of Natal, but later with the 1913 Land Act and also because of the lack of access to agricultural finance they could not make the grade and slowly disappeared.

Finally, Mr Chairman, I want to deal briefly with the extension service of the department. That is now called, I am pleased to see, entrepreneur development. I must say, the department really does get with it in certain respects. That is of course a good description. It seems to me that those of us who know anything about extension, will know that we are desperately short of good extension officers. In many cases they are young men with very little experience. They are asked questions to do with maize, to do with extensive beef, to do with feed-lotting of beef and one cannot expect even an experienced man, let alone a youngster who is out of university, maybe for a year or two, or just out of his army service, to be able to give sensible advice. We are also, secondly, dealing with a much more sophisticated group of farmers. I find that farmers are more and more informed, they are more and more concerned and they are better educated. What is happening is that you are getting an extension service developing because of the vacuum that is created by lack of staff and the limited facilities of the department, in your co-operative movement—so that you have many of your co operatives developing extension services. Furthermore, the sugar industry has developed its very own extension service and private enterprise is also running extension services. What is the trend—and this is what I believe the department should support and extend—is to go for extension services on a specialized conference, or day conference basis. In Natal we recently had a day conference on pastures. There were top speakers organized by Cedara and over 600 farmers turned up for that day conference. I believe that one day spent at a well-organized, well-prepared conference of that type is worth infinitely more to the farming community than anything else.

The other aspect which I think the department should consider is the question of computer services. Many farmers today are wanting to use computers. I believe that the department should, for example, offer a service giving advice on the type of software, in other words the programmes that can be used, as well as the kind of hardware that can be used for that purpose. I really want to encourage the department to go for a more specialized and a more effective form of extension services in that way.

I would also like to urge that the department looks at supporting a decent agricultural magazine. We have the commercial magazines such as the Farmers’ Weekly and the Landbouweekblad. But who wants to hear that tant Sannie grows the biggest strawberries in the Eastern Transvaal? We want to know what kind they are, we want to know how they are grown, we want to know what sort of fertilizer is applied, what variety she uses, etc.

Mr Chairman, I should like to associate myself with the hon member for Pietermaritzburg North. He discussed the extension programmes of the department and also referred specifically to the specialized extension services which must be rendered in future. I should like to support him in this regard and I should also like to say a few words about our extension programme.

Because horizontal expansion in agricultural production has become extremely limited, the demands made on the farmer as entrepreneur, have become greater and future increased production is totally dependent on the optimum use of the soil. In order to achieve optimum use of the soil, the modern-day farmer is expected to take certain decisions—decisions in connection with adapted branches of farming, production techniques and the use of available production resources. The risk inherent in this decision-making on these factors can be reduced if it is backed up by the guidance and advice of the extension services of the Department of Agriculture. Owing to the fact that there is tremendous capital investment in farming units, the farmer cannot afford to undertake research himself and he is totally dependent for his success on the objective extension programme for results already obtained through research. If there is no proper co-ordination between these extension programmes and the research results of various institutions involved in agriculture, it could lead to confusion. That is why it is preferable for the responsibility for research and guidance to be entrusted to the Department of Agriculture.

Like all government departments the Department of Agriculture is also experiencing problems with a staff shortage, a shortage of professional officers. The present position in the Republic of South Africa is that only 50% of the extension posts are filled. In the Free State region where I live this position is even worse—only 39% of these posts are filled. As far as extension technicians are concerned, the position is even worse and here only 26% of the posts are filled. Present farming conditions necessitated a change in the approach to extension programmes and they are now more economically orientated. A national extension strategy has been accepted and the basic point of departure is to achieve optimum resource utilization. The basic method of this strategy is that the extension officer liaises on a group basis with a permanent group of farmers, a sample group of approximately 200 farmers. The liaison takes place by means of the establishment of study groups in specific homogeneous areas. They can also use farmers’ associations for this purpose. The function of these study groups is to form a wider front with the extension officer, and by means of self study, in order to disseminate farming knowledge. In order to eliminate parallel extension services and occasional inconsistencies the Department of Agriculture has taken the initiative, in this connection as well, in coordinating extension programmes and research results by means of area liaison committees. Further co-ordination is achieved by pooling the knowledge of all interested parties in regional development programmes. The idea behind these programmes is to ascertain production problems, to determine priorities in respect of extension and research programmes, to persuade farmers to apply the latest technology and to provide the farmers with economic guidance. We must move away from the days when the main purpose of the extension officer was to combat soil erosion. Extension programmes are now preventative as far as this problem is concerned, and the emphasis is now on improved cultivation practices and on more scientific grazing systems. Where are the days when one of the main tasks of the extension officer was to inspect bulls under the Livestock Improvement Act? We have experience of this—when one has inspected a bull and has been invited for a cup of tea at the farm house, one is introduced to the farmer’s wife as “the bull man”. The next day one is introduced to the farmers’ wife as “the chicken mechanic”. The story is told of a young extension officer who had a solution to all the problems the farmer had and when they got back to the farm house the farmer introduced him to his wife as the man who was there when the world was created.

The extension officer’s knowledge is tested to the utmost, particularly when he sometimes has to judge things at a show that he has never seen before in his life. At one stage one of my colleagues had to judge dogs at a show and at the outset he disqualified two imported French poodles because he did not know which end of the dog was the front end. There was also an occasion when a young extension officer had to judge babies at a women’s meeting that was being held on a farm. They needed an outsider. The same thing happened to this extension officer that happened to the couple who had ten daughters one after the other and the eleventh child was a son. In reply to the question: “Who does the child look like?” the father said: “You know, I have no idea, because we have not looked at his face yet.”

Mr Chairman, I should like to summarize the essential ideas in what I want to say now, namely: Number one, your extension programmes must be entrusted to the Department of Agriculture; number two, there must be proper co-ordination of these extension programmes; and, number three, our extension programmes must be more economically orientated. In the application of our extension programmes we shall have to keep on trying to adjust to the demands of the times, not only to promote the farming industry, but also to put the image of the farmer in the right perspective, this farmer who is described as the greatest optimist in the world—he believes that if he has come this far, he will go all the way. He buries last year’s disappointments when he lets the land lie fallow in the winter to prepare it for next year’s crop and he lives in the future. He does not trust only in himself.

Mr Chairman, it is always a pleasure to follow the hon member for Gordonia and I also want to tell him that it is a pleasure to speak so soon after his other hon colleague, the hon member for Wellington. We backbenches refer to the two of them as the wine colleagues. I want to tell them that I shall not tempt them to make irresponsible interjections by discussing the beer industry, but shall content myself with saying that the greatest correlation between the wine industry and the beer industry is the degree of responsibility with which these two industries, the barley industry and the wine industry, have managed their industrial policy in the past. The hon member can now go and take care of the pretty girls he invited to lunch.

Mr Chairman, over and above the comprehensive side effects of the present drought conditions and the involvement of the Minister and the Government in this, it is nevertheless with a feeling of gratitude that one takes cognisance of the agricultural industries in this country in which there is normality and in which there is still a great degree of stability. Now I want to tell you that one undoubtedly observes these things with a feeling of gratitude to the Supreme Being and the Giver of all good things. This is undoubtedly a source of encouragement in the midst of otherwise depressing agricultural conditions.

Mr Chairman, one thinks, for example, of the deciduous fruit industry. We think specifically of the apple industry which probably had one of its best crops ever during the past season. We think of the wheat and barley producers of the Western and South Western Cape who also had one of their best crops last year. We think of the wool producers of this southern area who have just closed a wool season with what is probably the highest average price in history. When one gratefully takes cognisance of these things, one does not do so with pride in one’s own achievements, but, I want to repeat, one observes these things with a feeling of humility towards the Creator who has made all these things possible.

But it is a fact that even when nature cooperates with agriculture, the farmer is not necessarily free of other man-made problems.

When one considers the economic position of producers in these climatically stable regions, they, along with the rest of the agricultural industry, have been afflicted by particularly sharp increases in production costs during the past decade. It would seem as if increasing production costs, the rising cost of agricultural inputs, is threatening to become the greatest problem in future. Several hon members, inter alia the hon member for Swellendam and the hon member for Parys, referred to this.

Until about two years ago the question of the cost increases in industries that enjoyed the protection of the cost-plus basis of price determination was not that crucial. Last year in the discussion of his Vote and this year in the discussion of the Marketing Act the hon the Minister stated repeatedly that the cost-plus basis was a thing of the past and we could no longer do business in this way. The position has definitely changed. Unfortunately there are still producers in these industries who do not quite realize this. This year we in the wheat and the barley industries had to take cognisance of the fact that significant price increases for our products were out of the question. The cereal producers of the Western and South Western Cape accept this position with great understanding. What is, however, causing particular concern is that input costs are still rising alarmingly and that the impression exists that even the Government is finding it difficult to keep this position under control. Consequently it is logical that producers in these industries will have to change their approach and their strategy with a view to their commodity policy. This approach will have to come in the sense that the dedication and the study and the enthusiasm and the trouble devoted in the past to negotiating and motivating an increase in the producer price, will now have to shift to attempts to limiting input costs, on the one hand, and to increasing efficiency on the other.

It is undeniably a part of the proud record of the cereal producers of the Western and South Western Cape that in the past they acted extremely responsibly in matters concerning their industrial policy. As far as possible they bore their responsibilities themselves. The industry never allowed itself to develop an opposing attitude towards the Government of the day. It never allowed itself to develop into an aggressive pressure group which sought to impose its own ideas on other agricultural industries without due regard to the side-effects. I want to tell the hon the Minister that he can expect the same responsible behaviour from this industry in-future. As far as the past and the matter of increased efficiency are concerned—which is surely the producer’s own responsibility—I want to tell the hon the Minister that in their endeavour to achieve increased efficiency the 700 cereal farmers who are members of the Cape Cereal Development Association have held 33 symposia during this past nine years and have issued 15 publications. The purpose was, in the first place, to make information available to producers and to expose them to the latest knowledge and technology on management practices in cereal production. In the second place the purpose was to expose researchers and extension officers of the department and of the universities to the needs of the industry. This effort took place in close co-operation with the Department of Agriculture. As a matter of fact officials of the Department of Agriculture served as members of the executive of this association. This example of responsible cooperation between producer and university and department has led to several members of this speciality organization achieving dry land yields of 3½ and 4 tons per ha. Consequently they have succeeded and they have tried to make their contribution as far as their own responsibility was concerned.

But input costs are another matter. Owing to the rising costs that we have to contend with, which have resulted mainly from local inflation and from the specific protection of local industries that make input contributions to agriculture, producers cannot cope with this task of limiting input costs on their own. In this connection I should like to bring something to the attention of the Minister. I am not doing so with the object that he must specifically do something about it, but I just want to bring it to the attention of the hon the Minister and those hon members in the industry that in the present structure certain practices come to light which do not point to responsible behaviour on the part of certain companies that make important agricultural inputs. This is not only a matter for the Government. Nor is it only a matter for the producers. It is also a matter for the bodies responsible for providing agricultural inputs. I should like to mention two examples. Cartel formation is a well-known practice which has been part of the so-called free market system since the eighteenth century. At the same time it was also the practice... [Time expired.]

Mr Chairman, it is indeed a pleasure to follow on the hon member for Caledon. He has raised a couple of very important issues. I endorse the point that he made and his emphasis in regard to containing input costs. It is going to be impossible for farmers to recover from the financial burden which they are carrying at the present time unless some form of reduction can be achieved in input costs. Immediately it comes to mind that an area where we might ask the hon the Minister to give attention is in relation to the fuel price; the price the farmer has to pay for diesel. In this country farmers are required to pay a higher price for diesel than they are in many of the other Western countries of the world. This in itself would go a long way towards alleviating a financial problem that is being experienced by the agricultural community. I would make a special appeal to the hon the Minister that this is one aspect to which very serious consideration should be given. The hon the Minister has dealt with the question of marketing strategy. I was delighted to hear that the Marketing Council is investigating many of the schemes of control boards. This, I think, is highly necessary, particularly if I may single out the Meat Board. I would like to ask the hon the Minister to ensure that a full-scale inquiry be undertaken in regard to the Meat Board. We know that there was an inquiry a few years ago, but it was significant that a number of those involved in the inquiry were very much involved as well in the meat industry at that time. What worries us in these benches is the fact that there are, as it were conglomerates operating within the meat scheme which, I think, require very close scrutiny to ensure that in the long term the meat scheme itself is not being undermined by monopolistic tendencies. Comment has also been made in regard to co-operatives. I would like to briefly refer to this because I think one aspect in the co-operative movement that does need possible consideration is that a number of co-operatives over the years have developed into what I would call colossal giants. The original concept in the co-operative movement was that a band of farmers would get together and form their co-operative for the purpose of marketing their products. All right, we do not say that it should have stayed like that, but immediately the co-operative movement comprises large organizations personal member relationships, which are so necessary to preserve the co-operative spirit, are completely lost.

What about your bargaining power?

I agree. I should like to see that co-ordinated on a sort of federal basis. We have already seen signs of this. There was NEGWAG which initially comprised a number of co-operatives and it had considerable bargaining power.

I see that the time is catching me, so I must now move onto another aspect of the marketing of agricultural products which has been referred to in the White Paper. This gives issue to a number of salient points. It is coincidental and also perhaps relevant that a Bill containing amendments to the Marketing Act is now before the House. Much comment, obviously, that would have emanated in this debate has already been expounded in the Second Reading debate of the Bill. Therefore I myself do not intend to rehash much of what has already been expressed there. I would like to make a few further observations. The first being that marketing strategies of the control boards need to be overhauled. They have not kept pace in many cases with the production trends of the products they represent. The focal point in obtaining an improved system of marketing lies in the methods of distribution. There is no doubt that these must be improved and updated. This is a matter of extreme urgency. Any suggestion that surplus products be dumped must be strongly opposed. We have the population in this country to absorb most of our products, surplus and otherwise, provided a more realistic approach is adopted regarding their distribution. One does appreciate that there are limiting factors to this. The one being the storage capacity and the cost of storage this would involved. Consumer organizations, as has rightly been indicated, must be brought into closer contact with control boards with regard to the marketing of their products. I see little merit in exporting surplus produce at a loss when consumers in this country could benefit from lower prices commensurate with the export losses incurred. I agree with the previous remarks made by the hon the Minister that a greater co-ordination of ideas should be effected between the control boards and consumer organizations. Again, this reverts back to the question of distribution.

Another aspect of extreme importance, and one to which I referred earlier, is the need for a better trained and more highly skilled labour force in agriculture. It is essential that this matter be given priority. Farming is becoming increasingly specialized which in turn is the opening way to more sophisticated operators, just as the hon member for Pietermaritzburg North has indicated. This applies not only to those involved in the mechanical side of farming but there is also an ongoing demand for staff to fill positions such as clerks, recorders and computer operators. A background knowledge of agriculture is essential if the desired efficiency level is to be obtained. Facilities in this form of training are pitifully inadequate and I was pleased to hear the hon the Minister say that this is something to which he and his department would be giving attention. I would appeal to the hon the Minister to investigate means whereby the department can assist in the expansion of this form of training and I realize that this would have to be done in conjunction with the hon the Minister of Education and Training.

Mr Chairman, I should like to deal with a subject that various speakers before me have already dealt with. I should like to tell the hon the Minister that the mere fact that I am the umpteenth speaker to deal with the subject of farming debt, should be an indication to the hon Minister of how members on both sides of the House feel about this problem. We feel that at this stage it may perhaps be the most compelling problem in agriculture. I should like to start with the assertion that the farmers of South Africa, in accordance with Government policy, would like to conduct their farming operations in a marketing system that is as free as possible, for that allows them, to a large extent, to make their own unforced production decisions. All over the world the free market system, with the essential control measures in respect of agriculture, has been proved to be the most effective. However, the free market system, which gives real meaning to the concept of being “master on one’s own farm”, presupposes subjection to certain financial disciplines of the free market system.

I should like to deal with only one of these disciplines, which is that in a high risk industry such as agriculture a high liquidity position should be seen as a very essential insurance against setbacks. It is no use attaining freedom in terms of policy and the laws of the State and the Government only to lose this freedom after a setback through the actions of creditors. It is a fact that an overwhelming burden of debt is often the main reason why farmers feel forced to take harmful and wrong production decisions, such as the overgrazing of livestock regions, the cultivation of sub-marginal soils, over-fertilization or the planting of a crop in an area with insufficient available soil moisture in an effort to meet the financial requirements in respect of an excessively heavy burden of debt. For this reason I should like to state that the various production goals, as set out in the White Paper on agricultural policy, can only be achieved if the White Paper objective includes striving for the maximum number of well-trained and financially sound owner-occupant farmers. State assistance to the farming industry should also, in my view, be directed at incentive measures to ensure more careful and sounder financial planning and not only at rendering assistance after a financial crisis situation has already occurred. Special State assistance during disastrous droughts and floods will always remain a necessity; no one denies this. Yet this essential State assistance may never contribute to farmers not receiving sufficient encouragement to make provision themselves in normal years—by means of special financial measures if necessary—for unfavourable periods. This is a very simple business principle that should be adhered to in any high risk industry. The most important question is how this provision ought to be made. The building up and keeping in reserve of sufficient liquid assets or savings which should be in accordance with the degree of risk inherent in that specific farming enterprise, should be done in times of plenty. If it is not done, it can, in times of drought, lead to the destruction of even good and enterprising farmers merely as result of a liquidity problem. This danger is very real for if there are no reserves to fall back on and more and more money is constantly borrowed at 20% interest for example, and it is then used on the farm with an expected yield of between 3% and 9% on capital investment, it can only lead to financial deterioration. The question is why the necessary financial planning is not there to make provision for even normal droughts. I am referring here to that group of farmers which, in spite of high input costs and product prices that did not quite keep up with them, still made reasonable net profits in normal years, but who then did not use a sufficient part of it to pay old debts or to build up a cash reserve to serve as working capital after a subsequent crop failure was experienced and they then had to plant a new crop.

The answer to this is very simple and obvious, namely that in recent years it was merely “bad business” to save. I repeat: It was “bad business” to save. I maintain that it was bad business to save because, if a farmer had made, say, R100 000 net profit in a favourable year and had kept it in reserve to make provision for the lean years, he would have had to pay about R40 000 of it in income tax. The real value in the agricultural industry of the R60 000 that he would have kept, would have dropped even faster than the inflation rate would have risen because the cost of agricultural inputs rose more rapidly than the general inflation rate. Furthermore the interest earned on this R60 000 also taxable. In my opinion the solution to this problem lies in the recognition of savings as an ordinary means of production comparable, for example, to a tractor or to fertilizer in agriculture. As long as it is more profitable according to normal, sound and accepted business principles to buy a new tractor or an implement or even land, even if it is not immediately necessary, rather than to build up cash reserves, quite a large number of farmers will continue to be saddled with liquidity problems in non-normal years and State assistance will, even in normal times of drought, have to assume even greater proportions.

What happened in practice in this regard? During the years 1979 to 1981 approximately the same area maize and wheat was cultivated. During 1970 6 290 tractors were imported and R343 million spent in the agriculture on tractors and implements. In 1980 an average wheat crop and a record maize crop were produced. In 1980 the number of tractors imported had increased from 6 290, the number in 1970, to 23 250, and R892 million was spent on new tractors and implements compared with R343 million in 1979. That means that after the good crop years of 1979 and 1980 expenditure on new tractors and implements increased by R549 million, while approximately the same area was cultivated.

Urgent incentive measures in agriculture to further the building up of liquid reserves in favourable years instead of investment in implements and even expensive land for the sake of inflation and lawful tax evasion is now of the utmost importance. The institution of at least a limited postponed tax reserve fund of which the interest earned is also not taxable, may now be an essential incentive measure. I should like to tell the Minister that there may be many other and even better solutions, but we shall have to find an incentive measure to induce farmers to save. There is no doubt about that. If farmers could be encouraged in this way to do more careful financial planning, it will in the long term benefit the Exchequer as well. The fact that existing tax measures give rise to investors from outside agriculture investing to an increasing extent in land for tax evasion purposes contributes land prices rising to unrealistic levels.

Mr Chairman, to raise any new aspects at this late stage in the agriculture debate would be beyond me. If I were now to repeat any of the arguments you, being the fourth Chairman to take the Chair tonight, would not be any the wiser and would not call me to order. I do, however, want to apologize to the members of the Committee for perhaps repeating some of the arguments now.

As a representative of a constituency that has probably been the hardest hit in by this drought, I feel it very necessary to thank our Government very sincerely indeed. Thank you very much for the generous emergency aid announced so promptly. There are those who expected more and those who are disappointed. The responsible ones, however, who know what it is all about, are very grateful to the Government. I do not want to stop there, because in the same breath I also want to thank our hon Minister. This evening I want to tell him quite frankly that he created a very lofty and distinctive image of agriculture. Let me tell him that he and his department are held in high esteem by our farmers. I thank him very sincerely for what he has managed to do so quickly, and in difficult circumstances; for our farmers. The farmers appreciate it. Speaking of that, I also want to extend a word of thanks to the South African Agricultural Union. We do not always appreciate what the Agricultural Union does for our farmers. This evening I want to record our gratitude to the Agricultural Union, because in the prevailing drought conditions the Agricultural Union played a tremendous role. It conducted surveys and submitted a motivated report to the hon Minister and to the Jacobs Committee. With the necessary sympathy and earnestness the Agricultural Union thoroughly investigated all the conditions and submitted a well-motivated report. For that we have the utmost appreciation. If the Agricultural Union had not stepped in, I do not know whether all the particulars would have been available to the Government. I feel the need to thank the South African Agricultural Union, on behalf of this Committee, for what it has done. I think I speak for all the farmers in the country. I also want to call on all farmers in the country to become members of organized agriculture. Those that are members should also become more active.

One of our biggest problems in agriculture today lies in increasing input costs and inflation. So I am glad of the White Paper also giving attention to this matter. I should like to quote from page 12 of this White Paper where reference is made to agricultural financing. They say:

In the light of rising input costs and the spiralling inflation, I think there is only a very small number of farmers who can, on the strength of their own capital, afford these high inputs. Most of our farmers will have to make use of credit. If one now looks at a survey conducted by the South African Agricultural union, one finds the following distribution pattern for the farmers’ burden of debt: Land Bank—16,3%; the Financial Aid Division, Department of Agricultural Credit—4,2%; co-operatives—23,4%; the commercial banks—30,2%; other financial institutions—13,1%; private individuals—10%; and other debt—2%. It is therefore apparent that only about 20,5% of the farmers’ total debt burden lies with Government institutions and that the commercial banks remain the biggest single supplier of credit to agriculture. The crisis situation resulting from the drought and various disasters is not only the Government’s responsibility. Surely it affects every citizen of the country. If a day of prayer for rain is organized, surely it is not only the farmers who pray. On a day such as that the whole country is brought to a standstill, with everybody gathering and praying for help. If we are in financial difficulties as a result of this drought, it is something that affects everybody, including our commercial banks. I therefore want to make the following request today: If the producers turn to the commercial banks, in their hour of need let those commercial banks realize that they are also affected by these conditions. We want to tell the commercial banks: Come and help the farmers. Drop your prime lending rate in the case of the farmers. I do not want to mention any specific interest rate, as the hon member for Meyerton has done. He spoke of 8%. When I was preparing for this speech, I made a note that to the effect that it could be reduced to 16%. Today it is 21%—22%, and I think it could be reduced. The banks are financially very sound and would not go under if they dropped their lending rates. By doing so, they would be contributing in a tangible way towards relieving the situation of the farmers who are in need.

I also want to refer very briefly to two matters that cause me a great deal of concern. Firstly, as a result of the crisis situation in which a large number of farmers find themselves today owing to various natural disasters, the image of our farmers has been tarnished. The city-dweller and the consumer see the farmer as a mendicant, continually begging for alms. Just have a look at the letters appearing in the letter columns of agricultural magazines and the newspapers. It is clear that those people do not have the foggiest idea of the true position of the farmer. I would like to say, on behalf of the farmers, that we shall be doing our best to restore that image. Let us just first get over the drought.

The farming industry is such a risky... [Time expired.]

Mr Chairman, I have no fault to find with the last part of the speech made by the hon member for Winburg. I am very grateful that the hon member and the hon member for Meyerton were able to reach consensus in respect of their representations that the commercial banks that do big business with the farmers of South Africa should lower their interest rates. I would like to say to the hon member that we agree with him concerning this matter.

During the past year the Northern Cape went through a very bad drought. Although financial assistance was offered—not that I want to join the hon member in thanking the hon the Minister, and say that it was sufficient—I should like to touch on another matter that is of great importance for us in the cattle farming regions. I am referring to the question of fodder. During the drought situation we have been experiencing we had a hard time getting roughage in particular. The Vaalharts irrigation area plays a very important role in the provision of fodder and especially roughage to the cattle farmers of the Northern Cape. If the drought conditions in the Northern Cape were to last for the rest of the year and if the Vaalharts irrigation scheme does not have water for production purposes, the stock farmers of the Northern Cape would be staring a great disaster in the face. The information that I have is that the Vaaldam at present has more water than it had during the corresponding period last years. Yet the present water allocation to the Vaalharts irrigation farmers is less than it was during the corresponding period last year. These farmers at Vaalharts that produce fodder, fodder that is important for us, do not know whether they should plant because they do not know whether they are going to get enough water. I know that the farmers of Vaalharts addressed representations to get a higher percentage water allocation. It is in the interest of the cattle farmers in the Northern Cape that these farmers at Vaalharts will soon get a decisive answer as to whether or not they will get a larger water allocation.

Order! Is the hon member now dealing with the correct Vote?

Yes, Mr Chairman, surely I said that these people were producing fodder. These people must get a larger water allotment. I should like to ask the hon the Minister to ask the hon the Minister of Water Affairs to get a move on with this matter, because the planting season at Vaalharts is passing and the farms and the co-operatives want to know what is going to happen so that they can plan. I can tell this hon Minister that by the end of this year he can go out of his way to make money available, but if there is no fodder available, what do we do with the money? The hon the Minister of Transport Affairs as well is also sitting here. He increased the cost of transport to such an extent that one has almost reached the stage where it is impossible to transport roughage here from the Western Cape to the Northern Cape. For that reason I want to ask the hon the Minister of Agriculture to make water available to the Vaalharts scheme so that we can produce fodder in the Northern Cape.

The hon member for Prieska said that the stock farmers in the extensive agricultural areas were in an ominously bad position. I agree with the hon member. Things are difficult there as a result of the drought. Next I should like to quote from the report of the Department of Agriculture, as follows:

The report goes on to state that:

The income of farmers is decreasing while the burden of debt is increasing. Interest rates soared. The hon member for Winburg spoke about this aspect and he was right when he said that it was breaking the farmers’ backs.

I agree with the White Paper when it states that the farmers of South Africa should be kept in the rural areas, especially in the extensive agricultural areas in the Northern Cape and Gordonia areas, where we border on our neighbouring states and where these people have to drive long distances to towns and where the amenities are not available. We must try to keep these farmers on their farms.

There is one specific category of farmer for whom I want to make a plea tonight. In 1980 a young farmer bought a farm. He applied for a loan from the Land Bank. The carrying capacity of the farm, the interest he had to pay, his running costs and his salary were taken into account and after the Land Bank had considered this man’s application carefully, they decided to help him. Six per cent interest was charged on a loan that he had to pay back over a certain period. I pay tribute to the Land Bank for this assistance which they render, but in 1980 he paid 6% interest and after his salary was included, the Land Bank said he could manage. At his bank he paid 10% interest. In 1983, however, the Land Bank interest is 12,5% and the bank interest is 22%, while there has been no increase in the price of his product. Transportation costs have gone up, so have the prices of stock remedies, licks and fodder. This young farmer whose interest obligation doubled and whose costs rose, would like to meet his obligations. The hon member for Prieska referred to our part of the world becoming a desert because the ground cover on our farms was being destroyed through overgrazing. In order to meet his obligations, this young farmer now puts more animals on his farm than he should keep. He does this in an effort to meet his obligations, because he is a proud farmer and does not want to be a beggar, but wants to meet his obligations. In this process he ruins his farm through overgrazing and the drought is still a long way off when this man is already beginning to suffer. That is why I say tonight that the high interest rates contribute to desert encroachment in certain areas and also to young farmers leaving their farms. The Land Bank did plan well when this man bought his farm, but now he has problems with the increase in the interest rates. That is why my request is that if the Land Bank and the Agricultural Credit have to increase the interest rates, as I accept they have to do from time to time, the Government will help out in cases like these with a contribution so that the interest of farmers to whom loans were granted, will not increase within the first ten years after the granting of the loan. Then this young farmer who bought a farm will have ten years in which to establish himself on that farm. This man of whom I am speaking tonight—there are many like him—is being forced to leave his farm as result of these interest rates. For this reason I am asking the hon the Minister to give very strong consideration to the Government helping the Land Bank so that it is in a position to keep this young farmer on his farm.

I should have liked very much to have referred to the speech made by the hon member for Schweizer-Reneke, but he told me that he would not be here tonight.

This evening the hon member for Paarl advocated here that subsidized food should be exported to neighbouring countries in order to make friends for South Africa. It seems to me that the hon member has been so befaddled by the Government’s peace initiatives that he was able to put forward a proposition like this. [Interjections.] I should like to put this question to the hon member for Swellendam, who is now making such a noise: What is more important to South Africa, to export this subsidized food to neighbouring countries or to make this food available internally to people who cannot afford to buy a piece of meat today?

I am talking about surpluses.

I am also talking about surpluses. The Conservative Party says that it is better that these surpluses are eaten in South Africa rather than being exported abroad.

Mr Chairman, I should like to quote from the White Paper with reference to financing as an aid in reaching our production and marketing goals for farmer’s products. Before I do that, I just want to tell the hon member for Kuruman that he must remember that the maximum assistance the Government is paying a farmer in the North West—he can get the calculations from me—is R87 500 per annum per farmer. I do not want to argue the matter any further with him. I should like to refer to a certain remark made yesterday by the hon member for Barberton, namely that it was impossible that the interest subsidies for the Highveld grain farmers, and more specifically the maize farmers, could have amounted to R200 million in one year.

According to Union Grain, the co-ordinating grain co-operative, the total amount of outstanding debt at the High Veld grain co-operatives in September last year was R860 million. In the same year new production debts of R1 100 million were incurred at the co-operatives. If we assume that 2,8 million tons of maize will be delivered to the cooperatives this year at R215 per ton and that there will be an amortization of production debts at the co-operatives of 30% of the monetary value of this crop, it means that R180 million will be drawn on the old account. On 1 September of each year the debt will then be R1 780 million. The Government only subsidizes 11% of the interest on that amount, which amounts to R196 million. I have the figures here. This is not all the Government is subsidizing this year. It is also subsidizing new production costs at a rate of 35% of the Land Bank interest rate of 18%. If one assumes that there was an inflation rate of 10%, but that the farmers will buy 20% less production implements as a result of the drought, it is clear that the new production costs will amount to R970 million. For the farmer the savings on interest through the interest subsidy amounts to R61 million. The interest subsidy for one year which this Government is going to pay to the High Veld grain farmers therefore amounts to R257 million. In order to make it clear I should like to add...

You should help Horwood.

I only want to make it clear to the hon member how far the Government has “leant over backwards” for our farmers. I should like to tell him that over and above these subsidies the subsidy of R196 million on the old debt was guaranteed for another year. Over and above this subsidy there was an interest subsidy of 30% on the new production debts and the old production debts of the 1983-84 crop that amounted to R95 million. It means that the Government subsidized the farmers’ interest at the rate of R545 million for the guarantee the Government gave for these services. I have the figures here. The hon member for Barberton can whistle if he wants to. I know why he is whistling. He does not do his homework. If he did his homework he would have had the figures available himself. I want to go further by asking a question. If those who insist so emphatically that one should not bring politics into an agriculture debate make groundless statements about the assistance the Government is giving to the farming community, is it politics or not? That is the question the hon member for Barberton and also the member for Kuruman should answer. The hon member for Barberton is whistling again. I think he should go and whistle (fluit) somewhere else. [Interjections.]

I should like to come to the subject I actually want to deal with. It is the problems that have arisen around the aid measures for the grain farmers in connection with the drought situation. Generally speaking, when the Land Bank consolidated the farmers’ debt on their 22-year scheme they went about it in the following way: One third of the co-operative debt of the farmers was subsidized and approximately one third of his bank account that was in arrears as well as all his arrear hire-purchase payments. Now the following happens. In my area there is a big farmer and his application for R790 000 from the Land Bank is successful. The Land Bank recommends that R490 000 of that R790 000 should be allocated to the co-operative and R280 000 to the farmer’s bankers. However, the bank has a first bond of R600 000 on the land. They are not satisfied with their R280 000 allocation. Hon members must remember that I said that the application is such that one third of the co-operative debt—which in this case is considerably more than R1 million—should be consolidated. Now the bank says: We accept nothing less than the R600 000. If we accept it, we require in any case that the man’s limit should now be reduced to R300 000. That means that in order to allow the farmer’s application to succeed, the cooperative should take R320 000 of his R490 000 and pay it over to the bank so that the bank can get his R600 000. The co-operative gets R170 000. The co-operative cannot even get the debt the man has with it down to R1 million. The co-operatives security is reduced, and in the meantime the bank is laughing its head off.

I should like to come back to my speech. Over and above this situation, another situation has arisen during the past four years, which is that co-operative statements are increasingly being dominated by members’ debts. This has placed the solvability and the cash flow as well as the acid test ratio of the co-operatives under tremendous pressure. It is not far-fetched to say that if something is not done, certain co-operatives will in the near future be unable to disharge their obligations if matters do not improve. The hon member for Albany said that the high production inputs and the high product prices caused the risk to be transferred from the farmer to the Government. If one considers the facts I have just mentioned it is clear that this statement is untrue. The farmer’s risk has been transferred to the co-operatives. I spelt it out clearly. We as the co-operatives—who are the extension of the farmer, now accept the risk to which the hon member for Albany referred. I heard that the two problems I mentioned, namely the problem of the credit standing of the farmer and the problem with consolidation being experienced in certain circumstances by the co-operatives, have created grave problems for agriculture. I am therefore grateful that the Minister announced yesterday that the Government has guaranteed the debts at co-operatives with R800 000. I hope I have the figures right. I should like to tell the hon Minister that I am very grateful to the Government; the farmers and the co-operatives in my constituency are truly thankful for this major concession. I should like to tell the hon Minister that I am very grateful that I am dealing with a Minister who not only knows agriculture but co-operatives as well.

I should like to conclude by referring to one problem, namely the subsidizing of interest on the production debt of farmers. Problems arose because there were farmers who for some reason or other did not finance their production costs through the co-operatives but through other financial institutions. Under the present scheme these producers are not sharing in the tremendous relief brought about by the subsidizing of interest by the Government. Mr Chairman, just before you silence me, I should just like to say that in future producers could, as a result of this, be afraid to raise their production facilities at the banks. It will mean that those producers, too, will have to finance their production costs through the co-operatives. It will place tremendous pressure on the cash flow of the co-operations and will also distort their balance-sheets completely. [Time expired.]

Mr Chairman, I should like to begin by quoting two examples of undesirable practices that are coming to light in the present economic context. The first is the formation of cartels, a practice which was part of the so-called free enterprize system as far back as the 18th century. And it was also common for the parties subject to the effects of cartel formation to oppose it. That is why fertilizer companies, which are at the moment in the process of forming cartels, should take note that should they maintain the high fertilizer price levels by unscrupulous means, they should expect retaliatory measures or behaviour, whose negative effects on their profit margins would far outweigh any of the advantages accruing from the cartel formation on which they are engaged at the moment. Against the background of the recently noted accusation that the summer grain areas had been overfertilized, on the recommendation of the fertilizer companies, the image of a greedy striving for unwarranted profits would moreover be reinforced by this cartel formation; and it would spur producers on to drastic action that would not benefit anyone in the long run.

A second example is the issue of distributors of agricultural chemicals who victimize aerial spraying companies by paying them a commission per hectare whenever the contractor uses the relevant company’s chemicals for spraying. Apart from the unfairness of this practice, it also leads to cost increases that can in no way contribute to greater productivity. As a matter of fact, it is indicative of total insensitivity to the producers’ problems and companies such as these should rather take stock of the long-term effects and consequences of such conduct.

I have no intention of causing a rift between the suppliers of agricultural input and producers, but I do want to say that these industries and agriculture are interdependent. It would be beneficial for the whole economy if a good understanding existed between farmers and the suppliers of their inputs. That is why it is disquieting that certain suppliers, from an organized vantage point, champion statutory free-enterprize principles whilst themselves secretly resorting to informal control and manipulation that actually seriously restrict the implementation of the free-enterprize philosophy.

Mr Chairman, towards the end of this debate we have been going through a very peaceful spell, except for the occasional flare-up. I have the task of replying to quite a number of questions that were put to me.

To start with I should like to come back to what the hon member for Pietermaritzburg South said. He proposed that we should consider the erection of a grain silo at Richards Bay. More than R800 million has already been invested in the grain silo industry in South Africa. We have a whole network of grain silos. The industry organization, Nampo, at one stage agitated strongly that we should consider building a macro-silo at Richards Bay. The argument, inter alia, was that if there were surpluses and the market was right, one must have adequate storage facilities at the coast to be able to load large ships so that one could take quick advantage of good market prices. However, the matter is far more complicated than one thinks. At the time, on the instructions of my predecessor, a grain silo investigating committee under the chairmanship of Prof Reinecke from Stellenbosch was appointed. This committee found that building a hyper-silo at Richards Bay was not economically justified. Nevertheless we have been agitating for years for a grain silo to be constructed at Richards Bay, and it has now been decided in any case to see whether we cannot construct a suitable silo at Richards Bay. The Earle Committee of Nampo has now received permission to investigate the engineering aspects of such a silo so that one can have a blueprint of the costs of such a silo. It must, however, be a suitable silo.

The hon member for King William’s spoke about economic extension services, something which I think is going to be extremely important for agriculture in future. We have 34 subregions in South Africa, and a post has been created for an economic extension officer, a production economist, in each of those 34 regions. The posts have been created, but as someone has already said, we cannot find the economists to fill them. I do not know where the solution lies in this connection. In any case, we are working on salary improvements and occupational differentiation has also been introduced. We trust that when this has been accomplished and the effects begin to be felt, our salaries will be competitive, and that we will be able to fill these posts systematically. I agree with the hon member, however, that this is an extremely important endeavour.

The hon member for Parys expressed certain ideas in connection with the ADE factory. I want to say at once that there was a time when the hon member, and all of us, strongly agitated that not only should engines be manufactured in South Africa, but tractors as well. We can sometimes become very enthusiastic about certain things. Many of us realized that a tractor factory would not work. Ultimately it was then decided, for strategic reasons, that we would erect our own engine factory. In the first place it was essential for South Africa to be self-sufficient in regard to our motive power resources and in the second place it was essential to create employment opportunities in the Western Cape to help prevent a tremendous concentration of people in the PWV area, which was giving rise to certain social problems. Hon members alleged that it caused the price of tractors to rise because tractor companies were obliged to use the ADE engine in their units. The hon member referred to certain tractor companies that were offering discounts of up to 20%. What happened in practice was that when some of these companies heard that they would have to equip their tractors with ADE engines as from a certain date, they built up stocks on a tremendous scale, to such an extent that I hear that there are literally hundreds of imported tractors standing on certain premises, deteriorating in the sun. I have been told that it costs R1 000 to get such a tractor in running order again.

Particularly a John Deere.

It so happens that that is one of the companies to which this does not apply. At one stage we all thought that we were going to have a field day with tractor sales. An hon member said that we sold 26 000 tractors in one year. Normal sales in South Africa are approximately 14 000 to 15 000 tractors per year. There was a year when we only sold 6 000 tractors. Perhaps this is one of the reasons why a discount is being offered. The point I really want to make is that I do not think that ADE engines have up to now had a major influence on tractor prices. But we are going to experience problems in future, and we realize this.

We in agriculture proceed from the standpoint that it is essential for the economy in general that we should have a protectionistic policy. I want to make it clear that agriculture itself derives a great deal of benefit from this policy of protection, and we cannot get away from that. We have quantitative import control in regard to agriculture. Today we are able to import many food products more cheaply. The policy therefore cuts both ways. I want to tell the hon member for Caledon that some of these protected companies, apart from the protection which they enjoy, are also forming cartels. We have had experience of cartels. At the time when cooperative societies amalgamated with certain large companies, an inquiry was instituted. Cartel formation is illegal, and if it can be proved that a cartel has been formed, such a cartel is subject to investigation by the Competition Board. This kind of thing must be brought to our attention. My colleague, the hon the Minister of Industries, Commerce and Tourism, caused certain inquiries to be instituted last year and the recommendations made by the Board of Trade and Industry was that in the present economic situation in which South Africa found itself, we should rather move in the direction of tariff protection. Many of these companies will have to compete. This does not mean, however, that there will be a total abolition of imports of certain products and that we hope that matters will then improve in this connection. I shall refer again in a moment to what the hon member for Caledon said.

I should now like to discuss the question of young farmers a subject to which the hon member for Parys and the hon member for Meyerton referred. During the lunch-break I came across a very interesting figure. The allegation has been made that the average age of farmers is increasing. However, I received figures in this connection from the Land Bank. I think these can be regarded as reliable figures, because owing to the tremendous scope of its financing and the fact that it operates the South African Mortgage Insurance Company, the Land Bank is able to make a sound evaluation of age tendencies among the farmers of South Africa. During 1983 the Land Bank granted longterm financial assistance to 2 045 young farmers under the age of 35 years. This assistance amounted to R200,6 million, including R97,4 million for the purchase of farm properties. Incidentally, I want to tell the hon member for Kuruman that he was not quite correct in regard to the interest rate he mentioned. Between 1961 and 1975 the interest rate was 6%, and between 1976 and 1983 it was 7%. From 1983 it rose to 11%. I am referring of course to long-term interest rates. An amount of R231 million was allocated to farmers under the age of 35 years. What is interesting in this respect is the analysis of the South African Mortgage Insurance Company, or SAMICO, for short. It was established that the average age of Land Bank debtors during the past 15 years dropped from 51,05 years to 43,83 years. This is a very encouraging figure, and I was personally astonished to see it. One is pleased to see that younger farmers are still interested in the agricultural industry. A younger farmer is frequently inclined to accept challenges more readily than older farmers. Sometimes they take a chance, and perhaps that is one reason why their debt increases so rapidly.

The hon member for De Aar felt unhappy about competition with products from the Black states. As far as I know, a system of subsistence farming is still being practised in the Black states. With the exception of one or two of them, their farming practice is still at that stage. Some of them are only now making a start with a more market-orientated kind of farming system. I want to postulate that the surrounding Black states which I enumerated yesterday will continue to be dependent upon South Africa for food for many years to come. It is true that products are coming from the Customs Union countries and the TBVC countries, but many of these products are being illegally imported. In particular these are products that are being imported from the EEC countries to those countries, and then transported in trucks and dumped on the South African market. This is one of our problems and that it is why we are formulating a special section in the Marketing Act which we hope to pilot through Parliament soon so that that problem can be solved.

The hon member for Nelspruit spoke about housing, and he said that he saw labour as one of the production resources, which I think is very important. This is one of the challenges we are facing, as we have also stated in the White Paper. The hon member for Brits is not here at the moment, and he spoke about the problems they had and the complaints they had received about the levies that have to be paid to the Meat Board in respect of butchers outside the controlled area. The request was also made here that we should re-examine the Meat Board, but we adopt the standpoint that levies which are paid by butchers in outside areas affect the butcheries and the farmers to an equal extent, and sometimes farmers are also dependent on the slaughtering and marketing of their livestock within the controlled areas. Consequently I think that the control system works across the boundaries, and not necessarily within the boundaries of the control system only. In one specific year we also created certain benefits for the outside butchers when we wanted to get rid of surplus meat. For example we allowed them, if they wanted to sell a certain quantity of meat, to claim from the Stabilization Fund for a percentage refund, precisely because these people complained that they should not be involved in the building up of a stabilization fund with the Meat Board.

The hon member for De Aar also discussed the commercial banks and said that farmers were being exploited. In my statement yesterday I said that we were going to hold talks with our commercial banks soon. But I am not going to tell them that they are exploiting the farmers, because I think that would be a bad strategy.

That is not what I said.

Very well then, if the hon member did not say that, I am sorry that I thought he did. I think that the commercial banks in South Africa are doing a very good job of financing. I think there is one fact we must accept, however, and that is that the Land Bank itself is also to a very large extent dependent on commercial bank financing. The commercial banks play a major role in the creation of money in the market, for the Land Bank as well.

The hon member for Meyerton told me that he was worried about the future of the red meat industry in South Africa. I do not entirely share this fear of his. At present we are engaged in research activities in connection with the improvement of breeding material. We have amended the legislation dealing with livestock improvement to include provision for ovum transplants. We also see that the feed-lot industry is expanding, and this means that the size of the herds is going to increase. These days we wean a calf at seven months, and then it weighs more than 240 kg, and they are even talking about 250 kg. If one weans calves early at a good weight it means that one can have a faster turn-over of one’s herds. I think that have a faster turn-over of one’s herds. I think that with feed-lot techniques and the additional weight which they put on with good breeding material, it will mean that our meat production per ton per hectare ought to increase as a result of the new research we are doing. This afternoon the hon the Deputy Minister referred to the fact that with the drought assistance measures, which were tremendously comprehensive in regard to our stock grazing areas, our herds have basically not declined in numbers because there were still more than 8 million head of large stock in South Africa. Our nuclear herds were therefore retained in the process.

Mr Chairman, I am pleasantly surprised, and I think the hon the Minister is correct when he says that, but I was under the impression that many breeding cows and heifers were sold because of the drought.

That is correct, for at one stage—although only for short periods—we were slaughtering our livestock and between 18 and 20% of those animals were breeding animals. It was only for a short period however, and I do not think the effect of that slaughtering was all that damaging. If the drought should continue, however, it is inevitable that one will subsequently begin to slaughter into one’s capital resources, and that is what is beginning to happen. If matters begin to return to normal, however, I think we have enough nuclear herds to keep our overall stock of animals as sound as we would like it to be.

The hon member for Swellendam and the hon member for Paarl discussed the wheat industry. To me the wheat industry is a classical example of a one channel, fixed price scheme which developed over the years so that it has now become a self-supporting industry. It was in fact for this reason—and the hon member for Caledon referred to it—that one had the cost-plus element of price formation. And the hon member for Swellendam said it was the Rûens and the Swart-land areas that were used as the cost survey area, because the costs were higher there. I therefore accept that the problem which is now developing because one is self-supporting is that one should look for other markets beyond one’s borders and then production costs are no longer going to be decisive and that this is probably going to hit the producers hard, particularly in this area. But I also want to say that the industry itself has had a hand in this, I do not want to attribute it mainly to the fact that it is a one channel, fixed price system, but to the fact that farmers were encouraged to produce wheat. This also resulted in a great deal of research being done in this sphere, and hon members referred to that. Better cultivars were developed and resistance to blight, particularly in the Rûens and Swartland areas was developed, and root-rot problems were solved with improved cultivars with better resistance to that disease. Then of course the enterprising farmers in the industry developed the product to the extent that we are self-sufficient today.

Wheat has consequently reached the stage where it will have to begin to participate in the export market. New marketing forces are now beginning to become active, and it is no longer necessary to regard wheat simply as a basic food product. It has now become a commercial commodity as well, and the moment it becomes a commercial commodity new price determination factors begin to come into operation. In other words, wheat is now in the same position that maize was in after the Second World War, for then one also had the policy of cost-plus in order to stimulate production and to cause the industry to grow. It is interesting to see what finding the commission which investigated the maize industry arrived at, and I think that the same marketing factors are now beginning to become applicable to the wheat industry as well.

Firstly there is the relationship between internal demand and overall supply. When the supply exceeds the internal demand, the surlplus has to be exported, for which purpose prices other than the internal prices apply. Hon members probably know that in the maize industry they talk about two prices, but whether they are still going to materialize, one does not know. They are still being investigated.

The second factor has to do with the production costs of maize and reaction of the supply to those costs. The relationship of the producer price relative to the production costs of maize will inevitably exert an influence on the production and supply of maize.

Thirdly there is the reaction of demand to rising prices. Although the demand is not sensitive to prices in the short term, it is materially affected by price movements in the long term. When one is dealing with a price-cost-plus system, it is alleged that that particular board will of course adopt a subjective attitude to these various market forces and the factors that have to formulate the price, and that is where the function of the National Marketing Council comes into the picture very strongly. One must also take into consideration the relationship between the prices relative to other prices. Price movements in the other sectors of the economy are also taken into consideration. In addition the interrelationship between the prices of agricultural products as well as the prices of substitutes should on the one hand be in equilibrium in respect of the production of competitive agricultural products. On the other hand, on the demand side, an equilibrium must be maintained between both complementary as well as competitive products. Then the matter begins to become a little complicated, because there are eight factors involved.

I do not want to refer to all eight factors, but eight factors have been identified. Over and above the standpoint which the hon member stated, ie that the farmer on the farm will have to accept the challenge and that he will have to produce in a more market-orientated way, the farmer will also have to set himself certain goals. I think that this is one of the problems, because these people simply produced and then we determined the price cost or the production cost on a kind of macro-basis. We said for example, that the production costs of maize was approximately R450 per ha, depending on how many tons the yield was. This is a kind of macro-survey, however, because those of some producers will be lower while those of others will be higher. It depends on what one’s production target is. I think that in good times we also made the error of sometimes wanting to produce five tons per hectare or three tons of wheat per hectare, while the potential was less. One should therefore adjust one’s production target to the capacity of one’s land, so that one does not make too high an input. We have interesting figures in this connection, also now during the drought. People have begun to make attempts to see how effectively they can make their inputs, and it was found at one of the co-operative farms for example that one could save up to R100 per hectare if only one’s production targets were correctly adjusted. These are all facets one will have to examine.

The fact of the matter, however, is that we in South Africa—even under drought conditions—still have surpluses of certain food products. I now want to make the statement that marketing boards or control boards—we should now like to call of them marketing boards—are not welfare organizations. They are not competent to be welfare organizations because they are investigating the market place. They must exploit the market, and that is their task.

In South Africa we have the position that there are major differences in the levels of people’s incomes. We are now using the control boards to deal with food subsidies and in effect this means that in one year we are spending R275 million on a bread subsidy. However, it is not only the poor man who eats bread; the rich man also eats bread. Brown bread is very heavily subsidized, and I have now been told that some of the most highly paid people are changing over to the consumption of brown bread for health reasons. I therefore repeat that there should not be an inherent social function in the control boards and that is why I have instructed my department that we will have to consider some kind of food strategy in South Africa.

Today a question was put to me in the House of Assembly—and I do not take it amiss of the hon member who asked me the question—about the grapefruit that were thrown away in Durban. Hon members will recall that at one stage we were throwing milk away in Pietermaritzburg. Very frequently we have to export some of our surplus products at a loss against the accounts of stabilization funds while within South Africa there are certain communities that do not have enough food.

We shall have to consider some kind of food strategy so that there can be a distribution of food at subeconomic prices, but not at subeconomic prices at the expense of the stabilization funds built up by the control boards. This is a social function, and we are in the process of ascertaining whether we can work out such a food strategy. We hope to be able to come forward with something in this connection next year. The Government is investigating the matter, and I have already discussed it with the hon the Minister of Health and Welfare.

The hon member for Wellington, as an authority on wine, associated the wine industry with the White Paper. I think this will do the White Paper a lot of good. I hope that the excellent noble wines of the Western Cape will have an ennobling effect on the White Paper. I want to thank the hon member for his contribution.

The hon member also requested that consideration be given to export promotion. The Departments of Agriculture and of Industries and Commerce are at present giving attention to this matter. The present export incentive measures are unfortunately not applicable to agriculture. They are geared to tax concessions which cannot work for agriculture. Many agricultural products are exported by control boards, and the system of tax concessions is therefore not applicable here. The idea is that this should be done by way of cash payments. If consideration is given to export promotion measures one is immediately dealing with international rules, namely the GATT. This organization established a division for agriculture which is still in session at present in Geneva. They have to lay down certain provisions and regulations which member countries have to comply with, and we are a member of GATT. If a country wants to become an exporting country, it is fortunately or unfortunately the case that international disciplinary rules have to be complied with. My department is represented there, and we receive regular feedback from GATT and then try to adjust these export incentive measures within the regulations.

The hon member for Pietermaritzburg North is the one who set the cat among the pigeons. [Interjections.] He said his party was in favour of land tax.

We are in favour of an investigation into land tax.

Oh, I thought the PFP was already in favour of it.

The hon member also referred to farming systems which occur in other states. The multilateral strategy that has been launched, consists of a diversity of multilateral technical committees. In this way there is a multilateral technical committee for agriculture, of which the Director-General of Agriculture, Dr Immelman, is chairman. The committee has eight different working groups that liaise with the Departments of Agriculture of the Black States in the sphere of marketing, technical services, etc. We are making good progress with the development of the multilateral bank. With financing which can subsequently be established we shall be able to cause a great deal of the agriculture of the TBVC countries to develop in the direction of a market-orientated agriculture. There is also a working committee on marketing, and we shall therefore not cut one another’s throats in this connection. It is essential, though, that these people should not be allowed to lapse further into a situation of famine and poverty, for that means that these hungry people stream across our borders, which then causes problems. We should like to ensure that the TBVC countries are independent. When all is said and done, agriculture forms the basis of any economic development in any country.

In his speech the hon member for Gordonia referred to extension and research. Apparently he had a very interesting time when he was an extension officer. I wish that I could have occupied such a pleasant position. He is however the type of person who will make things pleasant for himself.

The hon member for Caledon referred to input costs.

The hon member for Mooi River referred to the price of diesel. There is already a rebate on diesel for the agricultural sector, and I do not know whether a further rebate can be introduced. To a large extent we are dependent on imported fuel. The hon member also said that he was very pleased that the Meat Board would be investigated again.

The Marketing Council.

I do not want to investigate the Marketing Council, because the objectives of this council are set out very clearly in the Marketing Act. The problem with the Marketing Council at the moment is that it has to investigate all the schemes. There are 21 control boards and more than 40 agricultural products that are marketed and administered through some scheme or other. This is an enormous task, and I fear that the composition of this council is not adequate for this purpose. It is true that there are knowledgeable people on this council, but there are not enough of them. These days the Marketing Council is negotiating daily with control boards on certain schemes. Every scheme in South Africa is scrutinized at some stage or another, which demonstrates how dynamic the marketing policy has become in South Africa. Consequently I should just like to strengthen the numbers of the Marketing Council so that this task can be carried out more rapidly and in a more flexible way.

The hon member for Fauresmith referred to the farmer’s burden of interest, and said that savings should be seen as a means of production and that the private farmer should also move towards a situation of greater liquidity. I agree with him.

If I have still not reacted to all the speeches made by hon members, I apologize. At a later stage I shall look at the speeches of all the hon members again. I think the speeches were of a high calibre, and the entire country should take note of the calibre and the content of the speeches. It is possible that the White Paper evoked these good speeches.

The Ministry, the department, the Government and I are committed to the White Paper that has been tabled. It is a White Paper which not only deserves the necessary recognition, or ought to do so, but one which should in practice be implemented in a specific way.

As regards certain of the goals mentioned in the White Paper, a programme of action has already, to a greater or lesser extent, been drawn up. I want to refer to an example, namely goal number one which is also the most important. This goal provides that there shall be optimum soil use, as well as optimum use of agricultural resources. Constant attention is being given to the classification of agricultural resources and the establishment of deduction techniques and yield norms, which is an enormous task. Soil classification is probably one of the most important aspects for evaluating resources. I am not referring now to soil classification on a district basis only, but on a farm basis and even on a country-wide basis. If soil classification were implemented to the maximum extent possible in South Africa with all the statistics we have at our disposal, such as rainfall and climatic conditions for example, and if these were fed into a computer with all the necessary programming, one would be able to sit in an office and determine precisely, by means of the computer, what the production potential in respect of a diversity of agricultural products is. But we have a long way to go before we have reached that stage.

Certain Western countries have made a great deal of progress in this connection. We, too, have already made a great deal of progress, but it will still take many years, because many people are needed to accomplish this. It is a tremendous challenge, but we are working on the problem. Consideration is also being given to the establishment of guidelines for finding the best combination of the various branches of agriculture.

As has already been mentioned, the value of extension has once again been demonstrated during the past few months. When reference is made to the overall agricultural community, it is the structure in agriculture that is being referred to. This consists of the Department of Agriculture, the South African Agricultural Union, the tractor companies, the chemical companies and the agricultural co-operatives. This is a vast community. When the emergency situation began to develop in South Africa the agricultural community got together and developed certain extension strategies. All the above-mentioned organizations are participating in providing the farmers with guidance on production under drought conditions. The feedback we are now receiving is such that it appears that this guidance has been valuable and the farmers have been incorporated into the scheme. This has demonstrated once again that with the extension strategy, together with all the research information which the department has at its disposal, there must be good extension machinery to convey the information to the farmers on the farms. We are waiting for the recommendations of the Kolb Committee so that consideration can be given to the extension strategy in future.

Many problem areas in agriculture have been identified. One of the problem areas that was also identified during this debate was financing. The Jacobs Committee appointed a subcommittee under the chairmanship of Dr Scholtz, which brought out a report. It dealt, inter alia, with the standard of exchange for agriculture, the position of agriculture in comparison with other sectors, the position of the agricultural sector in the inflation situation, interests rates, etc. The committee made certain recommendations which were approved by the hon the Minister of Finance and myself because this is a joint committee of both departments. Serious consideration will also be given to tax concessions, which were also referred to in this debate.

As far as this debate is concerned, certain priorities emerged during the discussions, for example the protection of agricultural resources with special reference to grazing areas that were seriously damaged as a result of the drought. The hon the Deputy Minister dealt with that aspect thoroughly. We have launched a programme of action, and we shall report on the progress made next year.

Another aspect which was raised during the debate was the investigation of the various schemes in terms of the Marketing Act in order to give thorough consideration to the principles of the free market system, in addition to striving to achieve an orderly marketing system. As a result of the White Paper, the Ministry and the department are required to report on this matter.

The third essential programme of action, on which we must report soon, is the question of financing, a matter to which I have already referred. Owing to the increasing intensity of the capital needs in agriculture, cognizance must also be taken of this matter. Consideration must also be given to the question of novice farmers, structural adjustments, major seasonal fluctuations and incomes. Mr Chairman, the hon member for Soutpansberg, who apologized for not being able to be here, spoke about contingency planning, as he called it, in agriculture. If there was ever a time when we learnt something about contingency planning in agriculture, it was during the drought. We were able to initiate schemes immediately. We do not always receive all the money we should like to receive, but our affairs are well planned. We have long-term drought assistance schemes. When we had the floods in Natal, that scheme was functioning within two or three weeks. We have sound contingency planning in South Africa, but bearing in mind the recent drought period, we could perhaps make certain adjustments. We have learnt a great deal in this connection.

Mr Chairman, I want to conclude by saying that this White Paper is not only the responsibility of this Government. It is the responsibility of the entire agricultural community. I think it is the first time in the history of South Africa that a White Paper specifically states that it recognizes the South African Agricultural Union as the mouthpiece of the farmers. If we therefore want this White Paper to succeed, it is also the task of the farmers themselves, via the South African Agricultural Union, to make inputs in this connection. They must also debate matters at the congresses and they must, if necessary, call the hon the Minister to account in respect of programmes of actions and priorities affecting the White Paper. I have the fullest confidence that, as the South African Agricultural Union is constituted and functions at present, it has the means to be able to do this. The union even has the necessary funds to be able to do this. We have done one good thing, if I may be permitted to praise myself a little: In the past we made recommendations to the Marketing Commission in connection with section 46(c) and (d). Mention is made in these sections to the ministerial fund which pays out a certain amount to control boards. A question was asked about this in the House of Assembly—I think it was by the hon member for Pietermaritzburg South. The South African Agricultural Union has funds at its disposal for the organization of its organizational services. That union is well organized; it is able to undertake investigations. It fits in very well indeed with the department and the Ministry. This White Paper is a challenge, not only to the department and the Government, but also to the entire agricultural community of South Africa.

Hear, hear!

Mr Chairman, in conclusion I want to say thank you very much for the assistance and the fine support I have received from my department. This has not only been the case in respect of the above-mentioned matters; they are constantly gathered around me like a group of good men to protect me. Sometimes the hon the Deputy Minister and I are perhaps a little too zealous, and then they hold us back a little.

Mr Chairman, thank you very much for the debate; I have appreciated it.

Vote agreed to.