House of Assembly: Vol9 - THURSDAY 15 MAY 1986
laid upon the Table:
Vote No 2—“Agriculture and Water Supply”:
Mr Chairman, of course it is not the practice for me to participate in a debate right from the outset. But hon members will understand this when I tell them that agricultural conditions in South Africa are not satisfactory. Therefore my purpose is to touch briefly upon most of the existing problems by way of an opening speech.
Before I proceed to do so, Mr Chairman, you will allow me to congratulate Dr Agenbach sincerely on his appointment as Chief Executive Director of this department, and wish him everything of the best in this office, although he already occupies this position. In the second place, Sir, I feel compelled to convey to every official of the department, from the chief directorate right down to the lowliest official in agriculture—wherever they are situated throughout the country— my sincerest thanks here today for every contribution that has been made towards getting agriculture through these troubled times. I want to give all of them assurance that I personally have great appreciation for the exceptional way in which they are serving agriculture in South Africa. Last year I paid quite a number of visits to a number of our organisations, institutes and regional offices dealing with agriculture.
I SHORT SURVEY OF PRESENT AGRICULTURAL CONDITIONS
The drought during the past four to five years, which afflicted the entire country, and which in certain agricultural regions continued for even longer, is still fresh in everyone’s mind. The paralysing effect it had on the national economy is still discernible, and we have felt the effects of it on our own pockets.
Although the rains, particularly in the high potential crop husbandry areas of our country, began to fall considerably later than normal, a good mealie harvest was envisaged until January. Subsequently, however, the harvest prospects gradually declined, and the ultimate harvest was only about 7,4 million tons, which represents 68,5% of a normal harvest. Once again, therefore, a below-average grain harvest is being expected this year. Perhaps I could just point out that the wheat harvest, too, was well below normal.
In the extensive stock grazing areas of the country conditions changed dramatically. Good rains fell over a wide area and dry spots are now the exception. Grazing conditions improved considerably, although there were unfortunately no follow-up rains during February and March. The result is that although good grazing is in fact available, the general situation is once again tending towards drought. The rains which fell in a large number of areas during April, however, will bring relief.
The extent to which our natural grazing has deteriorated in recent years as a result of droughts, aggravated by injudicious veld management over many decades, is something I made very clear to hon members in my introductory speech last year. A national grazing strategy—NGS—was announced on that occasion. The point I want to make at this stage, however, is that we should avail ourselves to the full of this opportunity which nature is now affording us to rectify what we mismanaged. That is why I am so determined to ensure that the NGS is implemented purposefully and effectively.
II SURVEY OF THE PRESENT FINANCIAL POSITION OF FARMERS
I am concerned, however, about the financial position of farmers in some regions. The total farming debt, for example, rose progressively from December 1970 to December 1985 from R1 384,2 million to R11,5 billion. Such a situation is understandable, too, if one takes into consideration that the total direct input costs per hectare for the cultivation of maize, for example, rose from R11,00 per hectare during the late ’sixties to approximately R200 per hectare during the early ’eighties. We must also give attention to the maldistribution of wealth. For example, only 6% of the farming units are today contributing today as much as 40% of the total gross farming income.
The economic or financial climate in farming today is unsound. The questions which automatically emerge are whether injudicious financing by creditors and injudicious financial or economic decision-making by debtors have not helped to create this unsound and unfavourable situation. In addition deficiencies in farming management must also be mentioned.
III SURVEY OF THE DEPARTMENT’S FINANCIAL AID MEASURES DURING THE PAST YEAR
Over many years financial institutions have invested large sums of money in agriculture which apparently did not always achieve the desired results. Consequently the time has arrived for us to reply to the question of whether financing is taking place in an effective way, in other words, according to sound economic principles.
Financial assistance by the Government during the past financial year can briefly be summarised as follows:
Total emergency aid
Normal aid schemes
Return flow of interest and capital to the revolving fund (Agricultural Credit Account)
Financing in agriculture is therefore an extremely important facet of agricultural administration. However, the entire matter will have to be given very serious consideration and ways and means will have to be found to ensure that it occurs effectively throughout.
The financing strategy which will come under discussion today is an attempt in this direction.
†IV WHITE PAPER OBJECTIVES
Arising from widespread problems in the agricultural sector the Government was compelled to table a White Paper on Agricultural Policy during the 1984 session. In this document 11 policy objectives were stipulated to meet all agricultural problems over a period of time.
For the effective execution and administration of these policy objectives, numerous action programmes or strategies, of which the National Grazing Strategy is but one example, will have to be launched over a period of time. The effective realisation of policy objectives, however, also implies that various action programmes or strategies will have to be administered or managed in a synchronised and harmonious way. This is absolutely important, not only for the effective realisation of White Paper objectives but also to prevent action programmes affecting each other counter-productively.
Seen against this background, it is obvious that realism and the determination of priorities will be the logical points of departure. This means that the basic problem areas or strategies must first receive attention while the logical development of further action programmes—either supporting or followup—must arise therefrom. It should all contribute to the realisation of the general ideal of optimal resource utilisation. With this in mind development initiatives, such as the National Grazing Strategy were tabled, and this is followed by the Financing Strategy which I wish to discuss with hon members later on. Time permitting, I will return to the NGS at a later stage.
To achieve the policy objectives contained in the White Paper, steps must be taken to address and where feasible to remove the obstacles that prevent agriculture from creating an economically sound farming community throughout the country. Most of these problems are of a financial nature which is why it is obvious that a suitable financing strategy requires urgent attention.
V FINANCING STRATEGY (POLICY GUIDELINES FOR FINANCING AND FINANCIAL ASSISTANCE TO AGRICULTURE)
The financing strategy makes certain instruments available which can be used directly and indirectly to implement the National Grazing Strategy effectively, thereby realising the production-oriented White Paper objectives.
It is of course, firstly, the responsibility of the State to contribute on the macro-level towards the creation of an infrastructure and a milieu in which the individual can act to ensure agricultural development in a proposed direction. Secondly, the State must, however, contribute on the micro-level to assist the farmer in the national interest insofar as he—due to circumstances—cannot act independently and on his own strength.
Within the abovementioned framework the aims and broad objectives of a National Financing Strategy can be formulated as follows: To create an economically sound agricultural industry in order to promote the welfare of the entire population.
This objective implies the following goals: Firstly, the promotion of effective agricultural production; secondly, the promotion of effective agricultural marketing; thirdly, self-sufficiency in respect of certain strategic agricultural industries which are considered necessary in the national interest; and fourthly, attainment of identified socio-economic and socio-political goals.
You will appreciate Sir, that this matter has a particularly wide scope which partly falls outside the jurisdiction of my ministry. I therefore wish to concentrate on the identification of specific bottlenecks which impede the furtherance of effective agricultural production according to the principles of optimal resource utilisation. It must be evident that with the elimination of bottlenecks which I will discuss later on, certain other goals can also be served indirectly.
*The following nine bottlenecks which have a detrimental effect on the financial position of our farmers and which are a source of great concern to me, have been identified:
- 1 The gap between the market value and productive value of agricultural land.
- 2 The effect of the price-cost squeeze.
- 3 Provision of credit in conflict with the basic principles of sound financing.
- 4 Farming systems and practices in conflict with the principles of optimum soil utilisation.
- 5 Unsatisfactory managerial level of agricultural entrepreneurs.
- 6 The uneven distribution of farm sizes and income.
- 7 Lack of timely and ongoing economic and financial information on the agricultural sector.
- 8 Unfavourable after-effects of monetary factors and policy on the agricultural sector.
- 9 Unfavourable after-effects of fiscal factors and policy on the agricultural sector.
I should now like to deal with a few aspects of the abovementioned bottlenecks.
1 THE GAP BETWEEN THE MARKET VALUE AND PRODUCTIVE VALUE OF AGRICULTURAL LAND
It is a well-known fact that for several years there has been a considerable gap between the market value and the productive value of agricultural land. Attendant upon the increase in inflation this gap has tended to increase considerably. Numerous examples could be mentioned, of which I wish to quote only two:
- (a) In the border area of the Transvaal bushveld the market value of land, on average, is three times more than the estimated productive value calculated at an average efficiency level and favourable interest rates.
- (b) In the Rhama irrigation area conservative calculations indicate that the market value of land is twice its productive value.
An important cause of this high land price problem is the popularity of land as an investment possibility to provide a hedge against inflation. In addition subsidised interest rates and other exceptionally favourable credit conditions on an ongoing basis have also contributed considerably to this tendency. Guaranteed prices for agricultural commodities provide greater certainty of income in normal and good years and are eventually capitalised in land prices.
The implications of this are innumerable, inter alia low earnings on the capital investment of entrepreneurs, serious liquidity problems, and also that entry into the sphere of agriculture by meritorious individuals of small means is seriously handicapped. In the past the tax system also gave rise to overcapitalisation and other related inefficient practices.
In order to deal effectively with the problem of the gap between the productive value and the market value of land, the following proposals are being made: The detrimental effects of inflation and the tax system are already well-known and are being felt throughout the entire national economy. The Government, on its part, is constantly giving consideration to measures to combat the inflation spiral while a commission of enquiry, the Margo Commission, is presently giving attention to the revision of the entire tax system, which will also affect the agricultural sector.
Owing to the undesirable side-effects resulting from the non-selective and undifferentiated application of the financing instrument in respect of land purchases, measures in this connection ought to be applied on an extremely selective and/or differentiated basis. Thus it may correctly be asked whether it is fair and justifiable that a farmer who, at a specific juncture, qualified for land purchase at a subsidised interest rate but has in the meantime grown into a farmer of substantial means, may lay claim to the subsidised interest rate for the full period of the loan. In view of this I am going to order an enquiry into all government measures pertaining to land purchases with a view to the phasing out of interest rates and/or other favourable credit conditions of a permanent nature.
Certain forms of leasing and part-time farming as an interim step to full-time owner-occupant status must not be disregarded, because they can make a major contribution to bridging the problem of establishing new entrants to the agricultural industry.
Existing financing legislation is adequate to accommodate these forms of entrepreneurship, but in addition to certain existing policy standpoints a lack of sufficient funds has forced these forms of entrepreneurship to be accorded a low priority by the specialised agricultural financing institutions. Consequently it is being proposed that in addition to a policy change, steps should be taken to strengthen the funds of specialised agricultural financing institutions so as also to enable the financing of the abovementioned forms of entrepreneurship as an interim step towards making full-time owner-occupant status possible.
Reserve funds could possibly be generated for this purpose from the agricultural sector by attracting tax-free investments from farmers in good years, which may subsequently be employed for land purchases under certain conditions.
Since the extent of the need in regard to new entrants to the agricultural industry is not known, it is also being proposed that before any extraordinary measures are considered, a comprehensive study of this aspect be undertaken by the Department of Agriculture and Water Supply and the SAAU.
If I have to judge from the number of applications we receive for land that is made available as a result of alienation by the State, I must say that the need in this respect is exceptionally great.
†Market-related marketing arrangements and price schemes are the responsibility of the Department of Agricultural Economics and Marketing. The National Marketing Board is at present also investigating all the existing schemes under the Marketing Act. It is proposed that the Department of Agriculture and Water Supply do research on a continuous basis on the side-effects of existing marketing arrangements and price schemes and their influence on the problem of the gap between the market value and the productive value of agricultural land. The results of the research should constantly be brought to the attention of interested bodies.
2 THE EFFECT OF THE PRICE-COST SQUEEZE
It is an acknowledged fact that the prices of farming requisites have risen relatively faster than most producer prices over the past decade. The average annual percentage increase of farming requirements for the period 1975 to 1984 was, for example, 14,8% compared with the average annual percentage of 12,8% in producer prices over the same period. The causes of the critical price-cost squeeze are manifested, inter alia, in the fact that if the supply exceeds the demand, prices drop relatively more with a resultant drop in income levels. Excessive input price rises as a result of exchange rate fluctuations, imported inflation and monopolistic conditions, as well as the unfavourable competition between agricultural producers and input manufacturers, all contribute to this problem. The implications of this are declining profit margins, the intensification of agricultural enterprises with the attendant increased risk, further efforts towards horizontal growth and an undesirable over-exploitation of the vulnerable and limited agricultural resources.
The question of intensified competition in the agricultural input industry is a matter of national interest which is also widely discussed at present but which falls outside the scope of the Department of Agriculture and Water Supply. It is proposed that the Department of Agriculture and Watter Supply undertake purposeful research to quantify the impact of protective measures in terms of the farmers’ production costs and that the findings therefore be made available to interested State agencies.
As far as increased efficiency is concerned, it is a prerequisite that all future applied research—that is system research—as well as facets of extension in this sphere must be market-directed and economically founded. It is therefore recommended that this prerequisite be investigated and, where possible, be implemented henceforth in research and extension programmes of the department. Special attention will henceforth be paid to production techniques and production input research.
Farming units which are too small are at the root of many economic problems in agriculture impeding, inter alia, the realisation of the objectives of the National Grazing Strategy and of optimal resource utilisation. Knowledge about the extent of such units according to the region and farming industry is totally inadequate. It is therefore proposed that an extensive study be undertaken on a national basis to determine and quantify the present extent of farming units which are too small. Appropriate measures should subsequently be taken and funds made available specifically to initiate a purposeful agricultural consolidation process on a national basis.
*3 CREDIT PROVISION IN CONFLICT WITH THE BASIC PRINCIPLES OF SOUND FINANCING
During the past few years the debt ratio— that is debt as a percentage of the total investment—in agriculture has increased dramatically from 13,1% at the end of 1980 to 23,2% at the end of 1984. During this period the asset value increased by 40%, but debts increased by 147%. Moreover it is striking that the largest increase in debt occurred among credit-grantors of mainly short-term credit, such as commercial banks and cooperatives. The fact that the producers are experiencing ever-increasing problems in meeting their debt obligations, even over relatively favourable periods, is already an indication of injudicious financing as a possibly important contributory factor.
In this connection the following causes are applicable: The over-emphasis of security, defective norms in regard to agricultural financing, the unique characteristics of agricultural production, uncoordinated provision of credit within the same service area and excessive liquidity at credit institutions in times of prosperity. This inevitably leads to a deterioration in the financial position of farmers, inefficiency, increased production costs and eventually a sharp increase in the number of insolvencies. We are at present going through such a period.
Owing to the important role and share which the private sector plays in the financing of agricultural entrepreneurs, the solution in regard to more effective credit is mainly dependent, too, on the co-operation of private financing institutions. In order to achieve this goal, I have taken the intiative of activating dialogue between all financing institutions involved in agriculture, with a view to the joint formulation of a strategy for placing the provision of credit on a healthier basis and bringing about better coordination. May I just add that I was greately encouraged by my talks with our financing institutions, and these discussions are now being followed up by Dr Jacobs.
As regards specialised agricultural financing, institutions such as the Land Bank and the Agricultural Credit Board already exist, and their financing has to a great extent been adapted to the unique needs of agriculture. Concerning the principles on which the provision of credit occurs, it is a feature of these institutions that they provide credit mainly on the basis of ability to pay rather than on security value alone. In the case of agriculture this is an extremely sound approach which, after the establishment of the necessary norms, should merely be expanded further in practice.
As regards the Land Bank and the Agricultural Credit Board as specialised agricultural financing institutions, there are noticeable similarities between the nature and the kind of financing which is undertaken. As a result the question is frequently asked why these two important institutions cannot be amalgamated. It appears that there are material differences, too, particularly in respect of the categories of farmers who are being financed, the financing, interest rate levels and other conditions of repayment. On these grounds the amalgamation of these two institutions do not at this stage appear to be a meaningful step.
I consider this matter to be of such great public and agricultural importance that I wish to propose that an investigation be instituted into the merits of the possible amalgamation of the Land Bank and the Agricultural Credit Board.
4 FARMING SYSTEMS AND PRACTICES AT VARIANCE WITH THE PRINCIPLES OF OPTIMUM SOIL UTILISATION
In practice major deviations already exist in actual soil utilisation patterns and practices, compared with the patterns and practices laid down by the principles of optimum resource utilisation. Resource classifications by the regional organisations of the department confirm this statement that major percental deviations occur between the present land utilisation pattern and its recommended application.
The causes of these bottlenecks may be summarised as follows: A lack of knowledge of agricultural resources and agricultural practices among farmers; reliance upon nature in agricultural production; conflicts in short-term economic endeavours compared with long-term conservation objectives; and farming units that are too small. The implications of these factors are the drastic deterioration of natural agricultural resources, an increase in the risk of production and an undesirable low efficiency level.
As a measure to counteract this undesirable situation, serious consideration must be given to the consequences and deliberate implementation of the principle that farmers who are adopting obviously maladjusted farming systems, ramifications and practices, will not qualify for special emergency aid schemes.
Because this principle may possibly produce problems in respect of its practical implementation and even its acceptance, and may also be further complicated by the question of marketing, it is being suggested that the implementation of this principle be undertaken in consultation with organised agriculture and the financing institutions concerned. The policies of the Department of Agriculture and Water Supply and accompanying activities pertaining to the whole concept of soil utilisation, as well as the newly-spelt-out extension and grazing strategies, are already intercepting this problem to a great extent.
What is also necessary, however, is an intensification of existing programmes of action in this connection, as well as the accommodation and integration of financial and economic principles to their full consequences. The Department of Agriculture and Water Supply will in future take further cognisance of this matter.
†5 UNSATISFACTORY MANAGERIAL LEVEL OF AGRICULTURAL ENTREPRENEURS
The marked variations in physical and economic achievements between similar undertakings in fairly homogeneous farming areas point to vast differences in the managerial level of agricultural entrepreneurs. It was found in the Rûens area, for instance, that the top 33% of fanners realised a net farming income per R100 of capital investment which was five times higher than that of the worst 33% of farmers.
One of the causes of this problem is that the ineffectual provision of credit is countering the withdrawal of inefficient farmers from farming. These trends contribute to the high average age of agricultural entrepreneurs. For example, only 1% of the farmers are younger than 25 years, compared with 21% of the total economically active male population in the Republic of South Africa.
Other causes are the relatively low level of training of farmers and the inadequate management-oriented extension services. Under present circumstances the raising of the managerial standard of our agricultural entrepreneurs is a vital prerequisite for the practical execution of the entire concept of optimal utilisation of agricultural resources.
If we are serious about increasing efficiency in agriculture, we will not only have to upgrade the managerial standard of a large percentage of existing entrepreneurs, but we will also have to include measures to enable certain entrepreneurs to terminate farming. For success in such a process the co-operation of organised agriculture and various State departments is imperative. With regard to the improvement of the managerial standard of agricultural entrepreneurs, the department and the South African Agricultural Union are already giving constant attention to this matter. As far as the question of farmers leaving or retiring from agriculture is concerned, it is suggested that organised agriculture consider appropriate measures for creating a favourable climate for farmers to give up farming advantageously.
6 THE UNEVEN DISTRIBUTION OF FARM SIZES AND INCOMES
There is clearly discernible polarisation in terms of physical entrepreneural sizes in agriculture. The numerous small, nonviable farming units have been a major problem in South African agriculture for a long time. On the other hand one currently finds at the other extreme a small number of large farming units with the latter-day tendency to become progressively bigger units. This phenomenon is the basic cause of the uneven distribution of farming incomes among agricultural entrepreneurs. Recent findings by experts indicate that two thirds of production come from a quarter of the producers, or that only a third of the production comes from three quarters of the producers.
Certain policy measures such as tax and statutory measures, for instance administered prices, encourage the whole process of polarisation in entrepreneurial sizes. Other causes are the hereditary system as well as the fact that large healthy enterprises naturally have a better chance of survival. This results in the smaller farms being gradually bought out by the bigger enterprises. I have already stated my views on the problem of farming units which are too small.
Large farming units constitute a problem of relatively recent origin. Very few real facts are available about this matter and the department will launch an investigation with a view to quantifying all possible adverse effects of this situation, especially from the viewpoint of the objective in the White Paper on Agricultural Policy dealing with the pursuance of a maximum number of well-trained and financially sound occupant farmers.
7 LACK OF TIMELY AND ONGOING ECONOMIC AND FINANCIAL INFORMATION ON THE AGRICULTURAL SECTOR (DATA BANK INFORMATION)
There is undoubtedly a dearth of up-to-date and relevant economic and financial information and of research results to determine the economic and financial situation in the agricultural sector on an on-going basis for any point in time. Ex ante analyses cannot be made readily; consequently crisis situations are not foreseen in time and corrective measures are usually taken on an ad hoc or ex post basis.
This is a function of the Department of Agriculture and Water Supply which has a serious shortage of expert manpower. Information and expertise in this field are available at various institutions outside the department, but very little co-ordination exists with respect to the exchanging, pooling, interpretation and distribution of relevant databank information.
This situation makes it extremely difficult for policy makers timeously to identify crisis situations and undesirable trends with the aid of proven scientific data.
It results in the fact that in the long term harm can be done to the economy in general and the agricultural sector in particular.
I therefore wish to recommend that the co-operation of all institutions that can furnish relevant economic and financial information at farming level be obtained and a well-co-ordinated effort be made to solve the problem.
*8 UNFAVOURABLE AFTEREFFECTS OF MONETARY FACTORS AND POLICY ON THE AGRICULTURAL SECTOR
The unfavourable effects of monetary factors and policy are usually felt in all sectors of the economy. The low yield level and typical features of agricultural production to which reference has already been made entail, however, that this sector is frequently hit harder and sooner by the unfavourable monetary effects. Experience during the past few years has once again brought these facts into prominence.
The causative factors of these after-effects are the following: Constant fluctuation in interest rate levels and movement on high levels over longer periods; ineffectual provision of credit granting; and limited financing of certain forms of undertaking, as well as inflation and exchange rates.
The implications of these factors are a low survival ability on the part of agricultural undertakings, a disturbance of the asset-liability structure, as well as a misallocation of production factors. They also cause problems in regard to the replacement of capital goods. Certain aspects have already been addressed, such as unsound interest-rate subsidies and ineffectual credit. Cognisance must also be taken of the disruptive and destabilising effect of interest rates which move on exceptionally high levels or which evince substantial and rapid fluctuations. This is a matter which has a detrimental effect on all sectors of the economy. It is important, however, that the monetary authorities should take thorough cognisance of the fact that the agricultural sector, owing to its relatively low yield levels under normal circumstances, is exceptionally sensitive in this connection and that this factor should be borne in mind in the consideration of Government actions and policy in regard to interest rates.
As regards qualifying norms for the provision of credit in respect of all forms of undertaking, it is a fact that private financing institutions place a high premium on the security principle. Certain desirable forms of undertaking which may serve as an interim step to full-time owner-occupant status, such as part-time farming and leasing, experience problems in furnishing sufficient security and are therefore largely dependent on specialised providers of agricultural credit such as the Land Bank and the Agricultural Credit Board. In order to effect the corresponding policy adjustment it is being proposed that any discriminatory conditions based solely on the form of undertaking be eliminated and that the same means test for the provision of credit which apply to other forms of udertaking should also be applied to part-time farmers and lessees.
As far as emergency aid schemes are concerned, the question is frequently asked whether it is justifiable that the State should make financial inputs because the basis of any private undertaking is inter alia on the taking of risks attached to the business sector in which one is operating. However, two basic principles are involved when the merits of State aid are being considered. Firstly, is the emergency situation attributable to purely normal risk factors, or can it be classified as abnormal uncertainty? Secondly, does the emergency situation affect entire communities or only individuals within the community?
On the grounds of these two basic points of departure I am of the opinion that State aid should only be instituted if the emergency situation is of such a nature that the individual cannot absorb its effects into his normal costs; if he cannot adapt his farming system to it; and if it is in addition not insurable in the normal course of events at fair tariffs with commercial insurance companies, and also if an entire community is effected and a socioeconomic infrastructure is seriously threatened or detrimentally affected by it.
It goes without saying that the type of emergency aid granted should be adjusted to the nature of the disaster and it should not be counter-productive to the pursuit of other policy objectives.
On these grounds, as well as with consideration of the general striving for a freer and more competitive economy, the basic approach that is endorsed is that the nature and duration of all emergency aid measures by the Government should be applied on a selective and/or differentiated basis. This implies that they should be purposeful and flexible in respect of interest rates and terms when long-term assistance is involved, as in the case of debt consolidations.
On-going research must be undertaken by the Department of Agriculture and Water Supply to identify and quantify the impact in regard to the after-effects of emergency measures in order to make rational decision-making possible when it comes to future emergency aid measures.
Since the stated basic approach should also apply to other Government involvement in agricultural financing, I am of the opinion that all existing long-term credit provision in which the Agricultural Credit Board is involved should be scrutinised with the view to adjustments in the conditions of repayment in order to comply with the above-mentioned principle.
9. UNFAVOURABLE AFTER-EFFECTS OF FISCAL FACTORS AND POLICY ON THE AGRICULTURAL SECTOR
The secondary effects of fiscal measures also contribute in large measure to inefficiency in agriculture. Inefficiency in terms of overcapitalisation, with particular reference to mechanisation, is an example in point.
The fiscal instrument is an aspect which falls completely outside the jurisdiction of this department and only the implications and side-effects of fiscal measures on agriculture can be pointed out to the organisations responsible.
The entire tax issue is at present under consideration by the Margo Commission and attention will be given to various aspects such as income tax, estate duty and the possible introduction of capital gains tax. In regard to tax-free reserve funds, I have already made proposals concerning land purchases and the strengthening of Land Bank funds.
In view of the major impact which the fiscal instrument has on the farming structure and agricultural resource utilisation in agriculture it is clear that, as in the case of emergency aid schemes, ongoing research will have to be carried out by the department into the implications this will have on the agricultural sector with a view to making information on and to the community available, and to bringing its side-effects to the attention of the fiscal authorities.
The important role which agriculture has to play in the overall national economy must be evaluated in terms of its role as provider of food and fibre, as provider of employment, as earner of foreign exchange and as provider of primary inputs to the non-agricultural sector. The stabilising role of agriculture in the socioeconomic and strategic sphere must not be underestimated either.
In view of this it is therefore extremely important to strive for the establishment and maintenance of an economically sound agricultural industry, and all objectives within the agricultural context ought to be aimed at achieving this.
At present all is not well with certain sectors in agriculture and one need only take cognisance of the tremendous increase in debt, the general deteriorating financial position of some farmers, the increase in State aid to the agricultural sector and the increasing number of insolvencies.
In the foregoing section of my speech I have tried to identify the general aspects which contribute to a greater or lesser degree to the undesirable weak financial position of the farming community. Cognisance must also be taken of the fact that the solutions I have suggested in this connection to resolve or to ameliorate the problems concerned, cover a wide field and interface with the activities and responsibilities of a large number of Government departments and other organisations outside the government sector.
The solutions to the problems and the accompanying inputs that will have to be made in this connection, are not the responsibility of this department alone, and will require a co-ordinated effort from all interested parties. The standpoints I have expressed on these matters today are therefore an attempt at the development and sustained, ongoing maintenance of the agricultural sector.
In conclusion I therefore want to make an appeal to all those who have the interests of the agriculture sector at heart to co-operate with the department to re-establish the agricultural sector on a sound basis, which will be beneficial to the national economy as a whole.
Mr Chairman, I request the privilege of the half-hour.
I should like to follow the hon the Minister in congratulating Dr Agenbach on his appointment. As far as the staff of the department is concerned, I should also like to mention that I once worked in the department, and I have great sympathy for the department. They have an extremely important task ahead of them, if they are going to implement and carry out the guidelines which the hon the Minister gave us in his speech today. I am sure that they have the ability and the capability to do it, and we wish them well in their task.
Mr Chairman, I must tell you that I never expected to hear from the hon the Minister the speech which I heard today. I do not want to embarrass the hon the Minister with too much praise from the opposition benches, but I think in one speech he has moved agriculture right up into the twentieth century and perhaps beyond.
I certainly believe that if his policy guidelines are carried out enthusiastically and with some energy, we shall build a viable, strong and vigorous agriculture in our country.
The hon the Minister has also presented me with another problem today in that many of the questions I wanted to ask—and some which my colleague the hon member for Wynberg will be speaking later on; I do not think he has a speech left anymore!—and many of the questions which my colleague the hon member for Albany wanted to raise as well, have in fact already been answered by the hon the Minister.
However, I think that his speech is such an important one that we shall—here I think of myself and also the hon member for Albany—take the opportunity to respond later in some detail to what the hon the Minister has said.
Fortunately what I have decided to discuss today falls outside the scope of the speech of the hon the Minister. He may regard my topic as politicising the agricultural debate but I must tell the hon the Minister right at the start that it is not my intention to politicise it. It is my intention to try to exchange in a rational way a few views on some issues which we see arising in the near future. This is going to be a nettle we shall have to grasp some time in the future. I hope that the hon the Minister will consider my comments in that spirit. Perhaps other hon members who are to participate in this debate will also view my comments in that spirit.
The first aspect with which I should like to deal is the question of land tenure. When I talk about land tenure, I want to say that we in the PFP believe that land tenure or the ability or permission to buy farms should be open to all groups in our country. All of us in the Committee know of course that race discrimination was statutorily brought into South Africa right back in 1910. We also had the Black Land Act of 1913 in terms of which many hundreds of thousands of people were forced from farms which they owned or perhaps in many cases squatted on. It is therefore not a new phenomenon; it goes right back to the days of Union and it is something which we still have.
There are numerous reasons why we in the PFP believe that we should address the problem of allowing other groups to purchase farms as well.
The first reason is that we have to look at how other groups regard the land issue. As they see it at the moment, there is no way in which they can acquire agricultural land in the so-called White farming sector because one has to be White to get it. They are therefore effectively excluded from acquiring land no matter what they do. This being the case, it causes the issue to be a highly contentious one politically because they are effectively excluded as there is absolutely nothing which they can do to acquire land.
The second reason—I think the hon the Minister emphasised this in his speech today—is that farming is a business like any other. In many parts of the country there are no further restrictions on business because CBDs have been opened. What has happened in the past is that many people of colour have been doing business in CBD areas using a White front because they had to do so. I know of instances where this has already happened in agriculture where there are Black, Coloured and Indian people who actually own farms but operate behind White fronts. Therefore it is happening already and, if it is there, let us accept it as a de facto situation.
The third reason is that the de facto situation is that already in many White areas many farms are not occupied by White land-owners. The White owners have Black managers on those farms. I know personally of numerous farms where this is the case. The de facto situation is that we have Black managers on farms managing them on behalf of White owners.
Order! I have allowed the hon member a certain amount of latitude to develop his argument, but I must point out to him that the policy decision in respect of the acquisition of land by people of colour does not fall under the jurisdiction of this hon Minister but under the jurisdiction of another hon Minister. The hon member is therefore largely out of order. He may, however, persuade me by the way in which he presents his argument that it does fall within the ambit of the Vote of this hon Minister, but I have my doubts. The hon member may proceed.
Mr Chairman, could I address you very briefly on that issue? What does fall under this hon the Minister’s jurisdiction is the so-called White farming area in South Africa and I am trying to point out that in future we are going to experience problems regarding land tenure in this so-called White farming area. I am also trying to advance a few reasons as to why we should consider a change in this regard. I fully appreciate that this hon Minister is not the man who will make the decision but he could possibly be the man who will be saddled with some of the problems that are going to arise. Mr Chairman, I have about two more minutes to go on this subject and then I shall move on to something else which, I think, also falls under the hon the Minister’s jurisdiction.
The hon member may continue.
One other facet which possibly has not escaped the hon the Minister’s attention—I am not saying that we have to be led or guided entirely by this—is that there are many groups on the far left in this country who are talking about the nationalisation of land and various industries. The surest way to pull the rug out from under these people would be to make land available to all groups.
I believe there is adequate legislation— and this is something which is very close to the hon the Minister’s heart—to conserve our agricultural resources and obviously, anyone who farms on what has been identified as agricultural land must farm in keeping with the natural environment. The farming system must be correctly adapted and I believe that should be enforced. It is nobody’s right—whoever he is—to take a short-term view of this and to farm land as he wishes. It is something he holds in trust for future generations and I believe that, come what may, we have to ensure that that is done. I hope the hon the Minister will give this some thought.
The second issue I wish to raise, which I think is also going to affect the White farming community in the near future, is the question of Black farm workers. The hon the Minister will know that there have been changes and that there are other changes in the pipeline at present in view of the Government’s policy on urbanisation, which are going to change the status of Black farm workers considerably. For the first time, they are going to be allowed to move freely from farms to towns. What is going to happen, therefore, is that Black workers in some areas may perceive opportunities in White towns—or any town for that matter— to be better than on farms, and the incentive is going to be very strong for them to move from the farming sector to the industrial sector in the cities.
If farmers wish to maintain a stable, well-trained labour force, I think they are going to have to look seriously at the conditions on their farms and creating improved conditions in order to keep labourers there.
That brings me to the next point I wish to mention, and that is the question of setting up rural villages. This is very much in keeping with the principle in the White Paper on urbanisation of allowing people to urbanise. In rural areas—I know it has happened in one or two areas in the Western Cape already—land must be set aside, where possible, so that workers can actually buy their own land freehold and, in doing so, enjoy many of the benefits and the fruits of urbanisation. This is the pattern throughout the farming areas in America and Europe. There are many small rural villages where farm labourers tend to live, rather than on farms. I know that the size of many South African farms does not make this practicable, but in some areas it does. I believe that this is entirely within the terms of the White Paper and so, from an ideological point of view, that is no longer a problem.
Why do I say rural villages? Firstly, workers could enjoy freehold tenure there, and it is one of the basic tenets of a free enterprise system for a man to own his own home. It creates a far more stable and contented labour force. In a bigger community it is also easier to provide other facilities, such as schooling. It is easier to enjoy a better community life in terms of the availability of sports fields, churches and that type of tiling. This is something else on which I would be interested to hear what the hon the Minister’s views are. I believe it is, for the moment, in keeping with policy. It is just a question of identifying suitable land for this purpose.
The other remarks I wanted to make have largely been covered by the hon the Minister already. I refer to the question of the conservation of agricultural resources. I know this is something which is very close to the hon the Minister’s heart. We in this country have all lived through the most serious drought in living memory. We know that the effects of this drought have largely been aggravated by poorly adapted farming systems. I want to put the suggestion to the hon the Minister— it seems that, in principle, he is agreeable— that, in order to qualify for drought aid in future, farmers should in fact be farming according to regulations under the National Grazing Strategy or in terms of some land use potential plan. We very strongly believe that this should be the case in future.
With these remarks I should like to close for now. I shall perhaps respond in more detail to the hon the Minister’s speech tomorrow when I will have another opportunity to take part in the debate.
Mr Chairman, it is a pleasure to speak after the hon member for Pietermaritzburg South. At the beginning of his speech the hon member addressed a few friendly remarks to the hon the Minister, and I want to thank him for doing so. Then he spoke about right of ownership with reference to people of colour in the country, as well as the question of future planning in respect of Black workers. I think the hon the Minister will reply to him in due course.
I want to deal in broad outline with the basic theme of the reconstruction of the agricultural sector. The hon the Minister introduced this debate with a speech in which in a striking but also stimulating way, he underlined certain problem areas which stand in the way of the promotion of effective agricultural production according to the principles of the optimal utilisation of resources. It is appropriate, therefore, at the beginning of this debate, to dwell for a moment on the part played by agriculture in the overall utilisation of resources in the RSA.
The strategic importance of the agricultural sector emerges exceptionally clearly in the following four basic truths. In the first place, agriculture utilises approximately 86 million hectares of the total surface area in the RSA, of which 10,6 million hectares is arable, and only 4 million hectares is regarded as high potential land. This emphasises the necessity for optimal physical and economic utilisation of this important, but extremely limited resource, if we want to feed a growing population, and want to retain the leading role in Southern Africa.
Secondly, the primary agricultural sector supplied work to 15,4% of the economically active members of the population of the RSA during 1980, viz to approximately 1,16 million people. It is illuminating that in 1980 the agricultural sector provided more employment opportunities to Blacks than were provided by the mining or manufacturing industries respectively. It supplied 1,05 million people or 18,7% of the economically active members of the Black population with work.
With reference to this, a large section of the agricultural sector’s products are supplied to industries as raw materials. During 1976 approximately 27,3% of industry’s gross value of production was derived from the further processing of agricultural products. What is of particular importance, however, is that this sector provides 28% of industrial workers with employment opportunities. Since unemployment is one of South Africa’s greatest problems at present, the strategic role the agricultural sector has to play in solving these problems cannot be over-emphasised.
Thirdly, one of the most decisive challenges our country has to contend with at present, is the deconcentration of economic activities. If we take into account, however, that 47,3% of the total population is living in the rural areas in 1986—that is 11,58 million people—it goes without saying that any successful decentralisation policy and any dynamic regional development will have to ensue from a vigorous agricultural development.
In this connection, the agricultural sector has a decisive part to play in the compelling demands to increase general standards of living through housing, family planning and education. Through the years—but particularly in recent years—agriculture has made an enormous contribution in this regard through the Rural Foundation. It is clear, however, that these programmes of action will have to be far more purposefully geared to in-service training and an increase in productivity. There are definite indications, however, that the agricultural sector has accepted this challenge, by building group training centres as well as private training centres and by building 5 477 primary farm schools, which were run by the Department of Education and Training in 1984, and which involve approximately 460 000 pupils and 10 000 teachers.
In the fourth place it is clear that agriculture will have to play a strategic role in any economic upswing. On the one hand any upswing in the economy will have to rest on increased exports. The agricultural sector can make an important contribution to this. The Republic of South Africa is one of six countries in the world which is a net exporter of food, and which, under normal conditions, exports between 25% and 30% of its total production value annually. Agricultural exports make up approximately 20% of the Republic’s annual goods exports, excluding gold. The agricultural sector therefore fulfils an essential role in the Republic’s foreign trade. On the other hand, agriculture serves as an important market for certain local industrial products. It is calculated that the gross value of production of the local industries which are dependent upon agriculture, was approximately 10,3% of the total value of industrial production during 1976. In addition, the industries involved supplied work to 7,13% of the total number of workers in industry. It is clear, therefore, that the agricultural sector fulfils a crucial role in the overall utilisation of our country’s natural resources.
Against this background and in my modest opinion, agricultural development deserves to be a higher priority in our country. That is why the State President’s announcement that the agricultural sector would be enquired by the Economic Advisory Committee in accordance with certain guidelines is the best news the farmers have had in a very long time. [Interjections.] Strategies for the optimal utilisation of these resources have been seriously disrupted by the paralysing influence of various factors, for example an absolute low in our economy, the results of a ravaging drought, a persistently high inflation rate and soaring input costs. All this has resulted in the agricultural sector’s basic problems, such as diminishing profitability, a growing debt burden and a flagging economic preparedness. The result is a lack of stability and general confidence in the agricultural sector. The question is how to restore stability and confidence in agriculture.
There are no clear-cut answers and solutions to the problem. What is clear, however, is that the reconstruction of the agricultural sector has a high priority in the interests of the country. The hon the Minister indicated in his speech that we had to develop certain strategies—for example the national grazing strategy—to fulfil the policy objectives as contained in the White paper on Agriculture, and in this way to place the reconstruction of agriculture on a firmer basis. A realistic determination of priorities is a basic premise in developing these strategies.
In his speech the hon the Minister came to the conclusion that most of the problem areas had a financial overtones, and that it was therefore evident that an appropriate financing strategy should be given urgent attention.
In developing such a financing strategy, with the objective of promoting effective agricultural production and marketing, the hon the Minister identified nine problem areas which have a detrimental effect on the farmer’s financial position. In the time that is left I want to mention a few ideas with regard to three of these problem areas.
In the first place there is the gap between the market value and the productive value of agricultural land.
The price of land is determined by two basic factors, each of which is in turn influenced by various factors. The first of the two basic price determining factors is the potential of the land as a production factor. That is its rental value—the price that has to be paid to obtain usufruct of the land; viz the productive value of the agricultural land. The second of these factors is the potential of the land to serve as a secure form of investment.
Order! I am afraid I have to interrupt the hon member; his time has expired.
Mr Chairman, I rise merely to give the hon member for Ceres the opportunity to complete his speech.
Mr Chairman, I thank the hon Whip for his thoughtfulness.
As I have said, the second factor is the potential of the agricultural land to serve as a secure form of investment. This comprises the capital appreciation value because of the right of ownership viz the market value of the land. Every farmer who wants to obtain the usufruct on land by wanting to buy that land, must necessarily enter the investment market. Every responsible agricultural financing institution should only grant credit to a prospective buyer on land with the productive value of the particular piece of agricultural land. The buyer himself must then accept responsibility for the investment possibilities inherent in the proposed transaction. Unfortunately this approach is seldom used in practice, and more often than not this results in unrealistically high land prices.
The result of unrealistically high land prices is that the present compensation on capital which is invested in the farm, usually lower—often much lower—than the prevailing interest and redemption rates on bonds. If this upward tendency in land prices cannot be controlled, the inevitable result will be that only those who already have a great deal of land will be able to purchase more land. Secondly, it can lead to farming becoming a more and more closed profession, which can be practised only by those who inherit sufficient land, or by those who have made their fortune in spheres other than agriculture. In the third place, the gap separating those who want to use land as a field of investment and those who want to utilise the present agricultural potential will grow wider and wider. This means that leasing a form of land usufruct will increase in importance. All three of these possible consequences of unrealistically high land prices can result in far-reaching structural changes in the agricultural sector. The hon the Minister referred again and again in his speech today to the leasing of land as a bridging phase for new entrants to the agricultural sector. I share the hon the Minister’s view, and I have great understanding for the problems experienced by new entrants to the agricultural sector.
On the other hand, it remains my firm conviction that the basic axis around which a financially sound agricultural sector has developed in our country, was the family farm of the family farmer. That is why all tendencies that threaten the continued existence of the family farm must be enquired into. There is no doubt that in agriculture high land prices on the one hand and low capital returns on the other, are a serious threat to the continued existence of the family farmer and the family farm. We often hear the statement that if our sons were to sell family farms and invest the money, they would earn a higher return on their capital. That is why I personally am extremely pleased about the State President’s announcement that the Economic Advisory Committee will inquire into this whole matter.
Secondly I want to exchange a few ideas about the distorted division of farm sizes and incomes. The problem of uneconomic farming units has become part of our agricultural system over a long period, but the tendency for farming units to increase in size is a recent phenomenon. The hon the Minister gave a number of fundamental reasons for this distortion in the division of agricultural revenue, and then announced an inquiry to determine the detrimental effects of the situation.
I get the feeling, however, that the hon the Minister did not place sufficient emphasis on the survival possibilities inherent in expanding farming units. Even the producer who could use his net farming income to fulfil his obligations in respect of his management, capital and land a few years ago is in trouble now. This is not necessarily the result of poor management or injudicious purchasing of capital goods or land. In the first place the enormous increase in input costs has increased the farmer’s production costs with a resulting decrease in his net farming income.
In the second place a larger part of the diminishing net farming income had to be spent on interest because of increasing interest rates.
In the third place, because of inflation, the smaller remainder of the net farming income is worth less on a rand-for-rand basis than it was a few years ago. The direct result of this is that what was an economic agricultural unit five years ago, for example, is no longer an economic unit today. The continued existence of the small to medium farmer, who has a stabilising influence on the rural population, and therefore makes an important contribution to work creation, is now being threatened by the preceding chain reaction.
This state of affairs was outside the farmer’s control to a great extent. That is why the growing frustration and the uncertainty in the farming community is understandable. That is why, in an effort to survive, the farmers bought land at prices even above agricultural value. No one can justify excessive land-ownership, however, particularly when it comes to the general productive utilisation of a scarce resource, or from the point of view of the general development or security of this country. This is also diametrically opposed to one of the most strongly motivated objectives in the White Paper on Agriculture, viz the pursuit of a maximum number of well-trained and financially sound owner-occupant farmers. That is why the inquiry into this matter is a timely one which will be welcomed by everyone who has the development of agriculture at heart.
Yet it remains a complicated situation, and control measures will have to be formulated very circumspectly to be able to prevent detrimental side-effects.
Thirdly, the provision of credit is in conflict with basic principles of sound financing. The hon the Minister put penetrating questions in this connection today, for example whether injudicious financing by creditors as well as injudicious financial decision-making by debtors had not helped to create this unhealthy situation.
If we analyse the farmer’s financial position, we have to concede that injudicious financing was a possible contributory factor.
The following two analyses underline agriculture’s serious problem concerning sufficient cash flow and the resultant growing demand for short-term credit.
In the first place there is the drastic weakening of the debt burden ratio from 14,1% in 1981 to 25,3% in 1985. Although a debt burden ratio of 25,3% is still favourable according to ordinary standards, one must keep in mind that the non-liquid assets in agriculture represent approximately 89% of the total assets. This high investment in fixed property and other assets is an extremely restrictive factor when unfavourable agricultural conditions are experienced, particularly as it can lead to serious cash flow problems.
The growing demand for short-term credit is underlined clearly by the following comparison. In 1975 agriculture’s short-term obligations were equal to approximately 53 cents for each R1 net income, as against R3,04 for each R1 net income in 1985. This great increase in short-term credit underlines the serious cash flow problems which are being experienced in agriculture to an increasing extent. Naturally this in itself increases the risky nature and vulnerability of the agricultural sector. Since the short-term credit in the agricultural sector is provided mainly by commercial banks and co-operatives, a sound and co-ordinated basis of credit provision is imperative. We have the greatest appreciation for the steps the hon the Minister has taken in this connection. We want to ask the hon the Minister to continue his negotiations, mainly to convince these institutions of the seriousness of intensive extension services to our farmers.
In conclusion I merely want to say that this whole problem situation underlines one basic deficiency in agriculture very clearly and time after time. This is the lack of capital formation. I spoke about this matter in detail during the debate on the Agricultural Economics and Water Affairs Votes. That is why I am only asking the hon the Minister to use his persuasive powers and influence to make the creation of capital reserves in agriculture possible. [Time expired.]
Mr Chairman, it is a pleasure to speak after the hon member for Ceres, a leader in his own right among farmers and an agricultural expert. I agree with much of what he said. He gave a comprehensive review of the agricultural conditions which to my mind was relatively correct. For that reason I do not want to react to it any further.
At this stage I prefer not to react to the speech and certain assertions and pleas made by the hon member for Pietermaritzburg South, since I am of the opinion that that belongs in another debate—a debate of a sociopolitical nature.
Mr Chairman, I should be very grateful if the privilege of the second half-hour could be granted to me.
Order! Is there any objection to the hon member for Barberton’s being granted the privilege of the second half-hour? There is no objection. The hon member may proceed.
When one looks at the hon the Minister’s speech—and to a great extent a declaration of policy—one is grateful that the speech was not made by the hon the Minister of Constitutional Development and Planning, since I find the greater part of the speech of the hon the Minister of Agriculture and Water Supply quite digestible and understandable. I want to thank him for that.
It is not possible to react at such short notice to everything the hon the Minister said and the policy announcements he made, since one has not had the opportunity to study his speech in detail. I do want to make a few remarks, however.
As far as the Minister’s policy in respect of the financing of tenant farmers, as well as part-time farmers on their way to becoming full-time farmers, is concerned, we should like to give the hon the Minister our wholehearted support. Hon members must permit me to state my own interest in this matter. As someone who grew up during the Depression I also had to begin as a tenant farmer and a part-time farmer before I could become a full-time farmer. Unfortunately there was no question of assistance from the authorities to part-time farmers of that time. I think the changed policy is adapting to the circumstances in South Africa, and indeed to the circumstances found in the whole world at present. The hon the Minister’s announcement about a possible enquiry into closer liaison between the Land Bank and the Department: Agricultural Credit, concerning agricultural financing is a reaction to a request which has existed for many years, as long as I have known organised agriculture. A movement to one or the other can only do good.
One important deficiency pointed out by the hon the Minister—for which I do not blame the officials—is the lack in his department of information and data needed to make a correct evaluation of the real position and particularly the financial position of the agricultural industry in South Africa. Correct decisions cannot be taken unless that information is available so that a proper evaluation can be made. We shall be pleased when an in-depth enquiry into this matter, as announced by the hon the Minister, takes place. The time is more than ripe for this.
I expected this debate to reflect the shortterm crisis which agriculture in South Africa is experiencing to a greater extent. In my view, the hon the Minister only long-term planning in his speech this afternoon. He announced no real short-term measures.
I am referring in particular to the fact that the hon the Minister said it was imperative to look at the problems of people who take up farming and that his department had received a number of applications which could not be accommodated.
During the last agricultural debate we had in this House—in March this year—the hon the Minister said the following, and I quote from Hansard, 26 March 1986, col 2559:
The end of April came and went and that is why—I am not trying to score a political point—we expected the hon the Minister to give a better indication of the short-term measures the State intends.
When we pointed out in the previous debate that we were worried about whether agriculture is still really the concern of the government of the day, in light of the decreased amount in the budget for agriculture, those on the side of the Government differed vehemently from us and asserted that we wanted to drag politics into agriculture. One must look at the true figures, however, and compare them with the department’s annual report. I quote from it on page 45:
These are important schemes for which the Agricultural Credit Board rendered financial assistance in the past when the hon the Minister of Finance made money available for this purpose.
During the previous debate, speakers on the NP side and the hon the Minister himself said the decrease in the budget could be attributed to the greater return flow of money to the revolving fund.
Among other things!
Yes, among other things. That is exactly what I want to say.
If one looks at the true figures before the return flow amount of the revolving fund is taken into account, the amount for the Agricultural Credit Account which has been budgeted for and can therefore be spent during the present financial year, has been decreased from R174 million to R142 million. Since the hon the Minister told us this afternoon that there is a serious need to assist young beginner farmers in obtaining farms, I find it strange that there is no, but no provision for this in the present Budget—nothing whatsoever! An argument as to why the budget has been decreased, is that more money has flowed back into the revolving fund. Would the obvious thing not have been to utilise that unexpected return flow of money from the revolving fund to get beginner farmers back into agriculture?
What do we find today? A number of young prospective farmers are qualified in agriculture and would like to take up farming. They are dependent on long-term credit at financial institutions today which, as the hon the Minister himself said, do not consider the viability of a farming unit, but simply determine whether or not the security is sufficient.
Although the Land Bank and the Agricultural Credit Board consider the viability of the applicant’s enterprise and his potential ability to fulfil his obligations, the general financial institutions, as we know, are interested only in security.
That is why I think it is a pity that, according to this Budget, no further loans are going to be granted for the purchase of land. This situation applies as from August of the previous financial year.
The hon the Minister made his long-term policy declaration here this afternoon, but we should like to know from the hon the Minister whether or not the measures that have been suspended as practical instruments for agriculture, are going to disappear from the scene. Is this suspension going to become a permanent part of the agricultural policy or not?
I want to make a serious appeal to both hon Ministers who are involved in agriculture, to address representations to the hon the Minister of Finance once again. I am not being derogatory regarding the hon the Minister of Finance in saying this. I think he has a little less knowledge of agriculture than the hon the Ministers involved in agriculture do. Perhaps they can inform him on the particular problems of agricultural financing so that he can open the taxpayer’s purse a little wider where agriculture is concerned.
More than two years ago we on this side of the Committee pleaded for an urgent enquiry to be made on a farm-to-farm level to determine which farmers could be kept on the farms by means of intervention by the authorities. More than two years have passed and we are in the middle of a financial crisis in agriculture as has never been experienced in South Africa.
I have already said this year that longterm enquiries have their uses, but what agriculture in the summer crop husbandry areas needs today, is crisis measures for the present. Are we rather going to allow a number of good farmers to be forced to leave the farms, never to return again?
Reports about increasing numbers of insolvencies and selling out of previously moneyed and successful farmers, appear daily. Judicial sales are taking place to an increasing extent, and we on this side have asked in the past whether the time has not come for the authorities at least to enquire into or to intervene at such judicial sales in the market place to ensure that the prices of those farms do not drop as in the case at present.
This drop in prices drags the security of the rest of the agricultural industry downwards. I would have expected people to have gone to the hon the Minister of Finance for the necessary assistance to the agricultural industry in this respect.
There is a shortage of agricultural land for prospective young farmers. The old problem in agriculture of a too small division of agricultural land is true. The problem of farming units which are uneconomic because they are too big, was not identified yesterday or the day before. It has been with us for a long time. When are we going to get truely effective measures in this connection, particularly in view of the fact today that the surface area of an economic agricultural unit is increasing from day to day as a result of factors know to all of us? That is why we expect short-term crisis measures from the Government in the situation we are experiencing. If the hon the Minister of Finance could impose a 10% surcharge on imports as a crisis measure to find R600 million for provision of work—we referred to this in a previous debate—could he not have taken crisis measures for the sake of agriculture which, as the hon member for Ceres indicated, is the largest provider of employment in South Africa, to hasten to the assistance of agriculture so that it can remain the great provider of employment it was in the past?
That is why I want to conclude by saying I am sorry that we only got announcements of a long-term nature from the hon the Minister today, although, after the previous debate, we had looked forward to the shortterm measures he was to have announced. We shall comment on them after studying them properly. The measures he has announced are important, but in the short term we have in reality not received anything today.
Mr Chairman, I shall not be able to react to all the statements made by the hon member for Barberton, except to say that as far as shortterm assistance is concerned, the enquiries resulting from the State President’s initiatives are partly centred round short-term as well as long-term solutions in agriculture. As a result, I do not think the hon the Minister will be able to make many announcements at this stage.
The question of finance which the hon member spoke about, is a long debate which I do not want to elaborate on. As regards the entry of young farmers to the industry, I also want to express a few thoughts. We must be careful, however, not to talk our young farmers right out of agriculture, since we are painting such a gloomy picture of agriculture that no young farmer, even if given the money, would want to take up farming. There are rays of light in agriculture too, however.
Not under this Government.
I wish the hon member for Sasolburg would enter the debate, because he talks about so many things he knows nothing about that, sure enough, he would talk about agriculture too. [Interjections.]
Give me time, Japie, don’t rush things.
I want to make the statement that interest and drought are not the only factors that have led to the financial dilemma our agriculture is experiencing. There are other factors which are diminishing the ability of our farmers to survive these drought conditions. I would say one should regard interest as a secondary problem, since there are other primary factors which have caused interest to become a real factor. Why is interest a factor? This happened because our short-term debt in agriculture has taken on a long-term character. Our farmers are no longer capable of paying off their shortterm debts. One of the main reasons for this is that they took excessive credit. A high interest rate is not only a disadvantage, because if one invests money, a high interest rate is an advantage. That is why we must not regard interest as being the sole cause of our farmers’ dilemma, because there are other contributory factors as well. If we want to look at a few of them, there are factors which have been pointed out in the course of the debate, such as the purchase of land at prices higher than their agricultural value.
Many of us and I myself have reprimanded the Department of Agricultural Credit and the Land Bank and differed from them in the past, because in our opinion their valuations of our land were too low, but now, since crises have arisen, they have been proved correct in their standpoints, because why are our farmers experiencing financial problems despite the loans they received from the Department of Agricultural Credit and the Land Bank at low interest rates and relatively low capital repayment? We must be careful, therefore, not to criticise those two bodies too much, because our argument was always that they were weakening our security value. I shall return to the question of security value in a moment.
Another important point is the present arrangement in respect of any writing-off of implements for income tax purposes during the first year of purchase. This concession encourages the unnecessary purchase of implements. What also happens is that when a farmer makes a good profit one year, he purchases an implement which he does not really need at that stage. That implement is purchased on hire-purchase so that he has to pay it off over a period of three or four years. During the course of the three or four years, he experiences crop failures, and this purchase then costs him dearly. I hope the Margo Commission report will contain an appropriate finding in this regard, because we must return to a system of writing-off over a period of three, four or even five years.
With reference to this question of the purchase of implements, I also want to draw attention to the purchase of sophisticated irrigation systems in our country at this stage. There are farmers along the Orange River and elsewhere in South Africa who have been financially ruined as a result of purchasing such sophisticated irrigation systems, and I am referring in particular to the central pivot systems.
The problem with these systems is that one cannot start using them on a small scale. One has to buy large units. Although the farmers get a very high yield with these systems, the difference between a yield by means of the traditional irrigation systems, such as the ordinary irrigation furrows and flood irrigation, and a yield by means of these sophisticated systems, is not significant enough to make up for the larger capital investment these sophisticated systems require.
These sophisticated systems are masterpieces of engineering. In this connection I also blame the people who sell the things, because they are masterpieces of engineering, enabling a farmer to sit and press buttons on a computer control panel. We must really display greater caution in purchasing these systems.
I come to the question of over-mechanisation and labour. We know the costs associated with labour make up 30% of our production costs on the farm today. The law of diminishing returns is also applicable to the utilisation of mechanisation as well as labour. One reaches the point at which more mechanisation and more labour cause a diminishing return in one’s farming. That is why it is imperative that one proceed cautiously in this respect too.
Ineffective fanning methods are also important. We cannot give enough emphasis to the necessity of optimal production in agriculture as a counter to scale down the input costs in the country. I want to speak about this using an example of what was achieved in our area along the Orange River through the managerial skill of the co-operative. They found that a realistic yield of maize under irrigation was six tons per hectare. One’s average production as delivered to the co-operative is 3,5 tons per hectare. On 6 000 ha this gives one a loss of R3 million. Wheat’s realistic yield is 5 tons per hectare while the average is 3 tons per hectare. On 8 000 ha which is planted there on average, the loss is R5,2 million. Cotton’s realistic production is 3 500 kg per ha. Its average production is 1 900 kg on 3 200 ha, with a loss of R4,6 million. As far as these few products are concerned, there is a loss, therefore, of R13 million between the average production and the realistic production. The realistic production would have been R30 million in this case, as against R17 million which was produced in reality. On the basis of an example, this illustrates that we are really not yet producing the maximum under the favourable conditions we have in certain farming regions.
We are very grateful for the enquiry instituted into production costs in agriculture, but I want to say if it does not produce positive results, we shall have to adopt a totally new approach in our agriculture. We shall have to take the increase in the prices of production aids in agriculture into account thoroughly when we want to invest in agriculture.
In speaking about investments, I want to say just one word about beginner farmers. People say a beginner farmer should have R400 000 to R500 000 in his possession when he wants to begin, but hon members know that is not possible. The son—if it is a son who is taking up farming — depends upon the father to sell the land to him at a concessionary price. This also creates problems, however, since the father usually has other children who have to inherit from his estate as well. As far as the parents themselves are concerned, they are put in an unenviable position if they have to sell at a concessionary price. We must make it possible for sons to take over farms while their fathers are still alive, and to make that possible, we shall have to consider the tax structures we have in South Africa.
No money is available at present, but when that money becomes available again, we shall have to pay special attention to the entrance of young beginner farmers to this industry.
There are other possibilities, and we must also consider the possibility, for example, that a farmer need not repay capital for a period of five years when he is granted a loan. He can repay only the interest on it for the first five years, for example, so that he can become financially sound.
To summarise, I want to say we should accept the problems in agriculture as a challenge, with the idea that we shall continue with intensive research and extension services and that those results will reach our farmers. [Time expired.]
Mr Chairman, the hon member for Gordonia made some good points. I do not wish to reply directly to them because I shall be dealing with certain aspects that he raised during the course of my own speech.
I just want to deal briefly with the introductory speech which the hon the Minister delivered at the beginning of the debate. I want to congratulate the hon the Minister on having come forward with what is indeed a forceful document, if I may call it that. He is definitely conveying the impression that he is out to implement certain aspects of the White Paper in addition to looking at the overall problems affecting the agricultural industry at the present time. However, I view his speech in the same light as that of the hon member for Barberton, in that his approach is of a long-term nature and, in my opinion we cannot look for long-term results, before we have found short-term solutions to existing problems. That is one of my criticisms of the hon the Minister’s speech.
I also want to deal with another aspect that he mentioned, and that is the emphasis that he placed on the question of land values in relation to the economic value and the market value. It is correct that generally speaking there is a disparity between the market value of land and its productive value.
This must be looked at though in two different ways. Firstly, some people have used the acquisition of land as a hedge against inflation. Secondly, and this is the other important factor, many farmers have found that they cannot make a proper living on their present properties as a result of inflation. Consequently they have had to expand their enterprises at inflated values. Consequently this reveals two significant aspects of the vexed inflation problem, relating to values.
I am pleased to note the comment of the hon the Minister that consideration is being given and that an investigation is going to take place in regard to amalgamating the functions of the Land Bank and the Agricultural Credit Board. I hope this will be successful in that it could obviate a great deal of duplication. It could also result in a far more efficient means of dealing with applications for financial assistance.
I was interested too in the points made by the hon the Minister regarding efforts to increase production. I think he has a very good point here but I want to refer to another aspect. If the food requirements of this country are to be met adequately in future, the production of food will have to come from the more intensive areas. These are the areas where cost factors are high. At the same time I think it is quite clear to us that the extensive farming areas are already saturated and they have their limits when it comes to production.
I just want to touch briefly on a point raised by the hon member for Pietermaritzburg South. I shall be dealing with the aspect of the acquisition and utilisation of property by the other race groups later on so I shall not reply to that part of his speech now. However, I do want to associate myself with the comments he made in regard to improving the living conditions of farm workers in the rural areas. It is quite clear that the agricultural sector is going to have to face a very much more competitive market when it comes to retaining the services of labour on the farms. I go along with the hon member’s viewpoint that the whole standard of living of the farm workers is something which will have to be given very serious attention if farmers are going to be in a position to compete freely with industry on the labour market.
In returning to the theme of my own speech, I would point out that the main thrust of the debate on this Vote will inevitably revolve around the critical financial position in which the agricultural sector finds itself today. One accepts, from an agricultural point of view, that this is a crucial debate, and that a particular responsibility rests on the shoulders of hon members of this House who participate in this debate to address themselves positively to the present crisis. It is for that reason that, in the course of my own speech, I intend to examine various possibilities as to how the Government can best deal with the problems which beset the farming community at the present time.
It is also not my intention to become embroiled in an argument as to why it is that agriculture finds itself with its back to the wall at the present time. However, I must mention in passing that I consider that criticism can be levelled justifiably against the Government for being dilatory in its efforts to tackle certain problems that have been brought to its attention repeatedly over recent years. [Interjections.] I think not only of my own speeches on agriculture during my five years here in Parliament, but I think of those of my predecessor as well. When one looks back on the speeches that he made some ten years ago, regarding escalating input costs one finds that this was a factor that he raised regularly in debates on agricultural matters.
It is here that I feel that Government does deserve criticism in that it has neglected to pay heed to this much debated question. I am aware that this is a subject that was dealt with recently by the hon the Minister of Agricultural Economics and of Water Affairs, in that an attempt has at last been made to examine whether the perpetual spiral in production cost can in any way be justified. Meanwhile, this factor, linked with an ever-increasing inflation rate, has been responsible for the present economic predicament in which many farmers find themselves today. To a certain degree I see this, as a typical example of closing that stable door after the horse has bolted. I hope …
Order! I regret to inform the hon member that his time has expired.
Mr Chairman, I rise merely to afford the hon member an opportunity to complete his speech.
The hon member for Mooi River may proceed.
Mr Chairman, I would like to thank the hon Whip for his courtesy.
We are faced with a situation from which we cannot escape. Therefore it is incumbent on us to examine every possible avenue to restore the respectability of this vital industry and bring it back to a level of normality. It is logical, therefore, that the return to viability in agriculture is an issue of absolute priority, and is dependent on two basic factors, namely the various degrees of assistance that can be obtained from the State, and the dedication and determination on the part of farming community to extricate itself from its present financial mess.
When it comes to State involvement, there are certain aspects on which I would like to comment, because there is no doubt that demands for financial assistance will continue to pour in to an ever-increasing degree. Unless these receive sympathetic consideration, the economic plight of farmers will spread to established rural communities whose very existence will also become seriously jeopardised. It is essential, therefore, that the present drift from the platteland be contained at all costs.
I submit, therefore, that the time has come for the hon the Minister to review present procedures relative to the rendering of financial assistance against the present economic background that exists today. The first step that I see in this direction should be a departmental assessment or survey of the types of assistance that should be rendered on a regional or a district basis, bearing in mind the country’s variable topography. Certain parameters should be set on the basis of meeting the financial assistance requirements which are peculiar to a specific area. Therefore, broad-based norms will not necessarily get to the root causes of present financial problems. I see, therefore, a need for greater flexibility in the assessment of applications. The hon the Minister has the power to regulate these procedures, and I would appeal to him to use this power more imaginatively in order to ensure that any assistance rendered finds its way to destinations where it can be most effective.
Before moving away from this subject, I would like to deal specifically with problems that have been experienced in a number of areas that fall under State irrigation schemes. It has been brought to my attention that the lack of water over recent years has been responsible for virtually neutralising production in certain areas, with the result that many farmers are facing ruin, and the continued occupation of their properties will depend on further financial assistance being made available to them,
One of the areas that has been particularly had hit is the Koedoeskop area in the Transvaal. I was invited to this area some weeks ago, and I would appeal to the hon the Minister to investigate the plight of the farmers in this area with the object of assessing ways and means whereby it will be possible for them to stay on their farms.
At this stage, Sir, I would like to express my appreciation to the Agricultural Credit Board for their efforts in dealing with the many applications that have come their way, particularly during the past year. At the same time, however, I would like to make a request. One receives complaints that the processing of applications takes considerable time, and if there is any way in which this processing can be expedited, it will be very much appreciated.
Moreover, in the light of other requests I have received, I firmly believe that more information should be made available in cases where applications for assistance have not been approved, particularly if the reasons for this decision are of a technical nature.
Finally, while still on the subject of the rendering of financial assistance, I must point out that the Government’s decision to move people against their will, carries with it certain obligations which are applicable to Black-owned properties in White areas; in other words, Black spots. The way I see it, the time has come for the Government to encourage the development of the agricultural potential of these properties, and this can only be achieved if the owners concerned have the same access to financial assistance as their White neighbours. I thus call upon the Government to investigate immediately the basis on which this financial assistance can be made available to them in order that the settlement aspects of these Black spots can be changed to bring them more into line with the agricultural potential of these properties.
Mr Chairman, I take pleasure in following the hon member for Mooi River. I can say with justification that the hon member is an agricultural leader in Natal in his own right and I have little fault to find with many of the standpoints he adopted here. I believe he addressed himself directly to the hon the Minister and that our hon Minister will reply to him.
I should like to associate myself with the chairman of our study group, the hon member for Ceres, in his expressions of thanks to our State President for the announcement made today concerning the inquiry to be carried out by the State President’s Economic Advisory Council. I believe this investigation will benefit agriculture greatly in the long run especially as regards future planning. We once again express the thanks of this side for it.
While we have the Chairman of the Agricultural Credit Board in our midst as well as the General Manager of the Land Bank, I wish to take the opportunity of thanking them very heartily as well. We greatly appreciate the work done by the Agricultural Credit Board and have very great appreciation for the work of the Land Bank and the Land Bank Board. On behalf of the farmers of South Africa we want to thank them very much. We thank them as board members but at the same time our thanks go to all the officials attached to those two institutions. We greatly appreciate the friendly reception they always accord us as members of Parliament and their attempts to assist us as speedily as possible when we put our voters’ problems to them.
In the course of my speech, Mr Chairman, I should like to refer to the rebuilding of agriculture with specific reference to the role to be played by agricultural training and financing in this process. I do not think it necessary for me to repeat today what the current financial position of the farmers of our country is; I mentioned this in a previous debate. I may add that the total burden of agricultural debt amounts to approximately R11,4 billion at present on which interest of R2,28 billion is being paid. Various factors gave rise to the situation in which our farmers currently find themselves—as previous speakers have already indicated.
Among the chief contributory causes were droughts which lasted for five years in certain areas, high input costs, high interest rates and inflation. The problem and contributory causes have therefore been identified so I wish to attempt making a few proposals today which may possibly be able to lead to a solution of the problem in which agriculture is caught up.
The solution to the problem will have to be tackled on a short-and long-term basis. In the short-term, as many farmers as possible who are currently experiencing problems but deserve to remain in agriculture should be assisted to remain on their farms. The SA Agricultural Union has already drawn up certain proposals in this respect— and is currently still occupied with further proposals—to be submitted to the Government. I understand the Jacobs Committee will make recommendations in this respect to the Cabinet later in conjunction with representations already made and still to be made. I should therefore like to ask the hon the Minister whether he cannot already announce in his reply to this debate that the extension of current assistance measures is being considered. Obviously we also hope that, after the Jacobs Committee has made its recommendations, present measures could possibly be extended.
In future there will have to be greater concentration on furnishing assistance to individuals against the backdrop of the shortage of finance. The powers of the “jockey” will also have to receive more attention and play a more important role in the granting of loans especially in the light of the fact that the ability of most farmers to furnish security now poses an exceptional risk. I also believe, however, that certain long-term measures will have to be arranged to support agriculture as well, measures which will have to contribute to rebuilding agriculture. I want to express the opinion that agricultural training and financing will be the most important factors to be considered in the rebuilding process in agriculture. Agricultural training is a matter which should receive continuous attention especially in the rapidly developing technological century in which we find ourselves. I wish to state immediately that I am not one of those people who believe that only formal and academic training guarantee success in farming. Experience remains one of the best teachers.
In addition, I also wish to appeal to every young farmer as well as young men who are interested in entering agriculture to take a course in agricultural training if possible at one of the four universities offering such a course or at one of the five agricultural colleges falling under this department. The agricultural colleges also offer short, specialised courses which I believe should be used more by our farmers. I believe that open days for farmers arranged by co-operatives and other organisations can also contribute to equipping our farmers better.
Mr Chairman, I wish to take the opportunity today of putting a serious argument to the hon the Minister in favour of the extension of the number of students at the five existing agricultural colleges in our country. From information I have received, there were places for the following numbers of agricultural students at our five agricultural colleges during 1985: Potchefstroom, 144; Elsenburg, 183; Grootfontein, 102; Glen, 133; Cedara, 148. That is a total of 710 students. I do not consider the number of students we train annually to be adequate. I therefore wish to appeal that we launch a process to investigate whether we may make certain extensions to our existing facilities in an attempt to double the number within the next 10 years.
I am aware of and very grateful for the extensions planned for Potchefstroom and Glen. I have also heard that the new Lowveld Agricultural College at Nelspruit will have been completed by 1989 so I am grateful for the extensions but I do not think they are altogether adequate. I know of various young men who would have liked to enrol at our colleges but were turned away because facilities were limited there. From a reply to a question in Parliament, more than 200 men were turned away in 1985.
As I have already mentioned, agricultural financing will have to receive attention, particularly in the rebuilding of agriculture. In the past the State made a huge contribution in this sphere with the aid of the Land Bank and the Directorate of Financial Assistance. I believe they will continue doing so. The co-operative industry has also done pioneering work in this field. Nevertheless I do not think the private sector has altogether provided its pound of flesh in this connection. We are grateful for contributions which some private organisations and banks have actually made in his field. I wish to hazard the statement that, if commercial banks and financing institutions had made more use of the norms applied by the State as regards agricultural financing, the total burden of debt in the agricultural sector would probably have been smaller. I am not saying this in a condemnatory vein but in a friendly spirit and in the conviction that commercial banks and private financing institutions will have to play an even more important part in agricultural financing in future. I wish to request them, however, to let the emphasis in agricultural financing fall more on the production capacity of a farmer’s property than on its market value.
After co-operative advisers, bank managers ought to be farmers’ best advisers on projects which the farmer wishes to tackle and which have to be financed. A fraternal relationship should exist between them.
Our farmers are heavily burdened with debt today and I therefore wish to conclude by requesting commercial banks to correct the mistakes they made as well as those made by farmers over a longer period and not to attempt doing so within a single year by selling a farmer’s land over his head. I wish to plead that this should not be done because such action will not be to the advantage of agriculture or the benefit of the bank or financial institutions concerned. The time has now come for us to take one another’s hands—the State, the private sector and our farmers—to see how many of our farmers may be saved and in this way assist in saving agriculture from having farms without farmers.
Mr Chairman, the hon member for Schweizer-Reneke told us how useful agricultural education is and recommended that young men should attend one of the four universities that teach agriculture. I want to tell the hon member that I did what he advised because I went to Pretoria University. I took the advice of the youngest hon member in this Committee and studied agriculture at the University of Pretoria. I am one of those who proved his point.
You have never farmed!
I also want to congratulate the hon the Minister and everybody in his department on the forward-looking speech he made today. He made a very good speech but I want to tell him that it will be a matter of “vasbyt en voorspoed.”
I want to deal with a practical matter. In the latest annual report of the Department of Agriculture and Water Supply for 1984-85 we read, and I quote:
The hon the Minister was most enthusiastic about this legislation but unfortunately the farmers are not heeding this law—he mentioned that in his speech—and nobody has yet been brought to the courts of justice for their continued and continuous alarming abuse of the country’s grazing. This practice has been prevalent for many decades. With the drought broken, farmers have failed to implement the strategy of sustained commitment and strict discipline. The hon the Minister expressed his disappointment in the attitude of farmers to this malpractice as well. The whole question of the balance of nature and the utilisation of natural resources is our problem. I want to use the Karoo as an example where this is going wrong so that the desert is advancing northwards. I do this because I know that the hon the Minister comes from that part of South Africa and he wants that part of the country to be more productive and prosperous in the future than it has been in the past.
The hon the Minister attended a meeting in Graaff-Reinet a few weeks ago and one of the major requests made by the Karoo farmers was for more research to be done in order to destroy the Karoo caterpillar successfully. Because we have an own affairs and a general affairs Department of Agriculture the hon the Minister will have to ask his counterpart in general affairs now to do this research.
Why did the hon the Minister not tell the farmers that by using inadequate grazing practices they, the farmers, were now in direct competition with the Karoo caterpillar for fodder and that the Karoo caterpillar was likely to win easily? The Karoo farmers were not protecting their grazing against the locusts in the first instance which is a plague that is far easier to control.
For years we have seen inadequate grazing practice by overstocking and overgrazing. Farmers, sheep, locusts and caterpillars compete with each other for survival. What are their chances for survival if the desert is allowed to encroach further and further into the cultivated areas of South Africa and if our farmers will not carry our the prescribed conditions of the Conservation of Agricultural Resources Act, 1983 and the Agricultural Pests Act, 1983? They lay down some of the basic regulations that farmers must follow. It is for instance compulsory for farmers to inform the department if locusts have appeared or are laying eggs. This is contained in section 5 of the Agricultural Pests Act. So far we seem to have wasted our time introducing these Acts into this Parliament.
Let me start off with the locusts. As a small boy I watched a seemingly never-ending swarm of locusts descend upon a rugby field and eat it clean up within a few hours. It was a frightening but awe-inspiring experience. Some years later as a student at the University of Pretoria—this is for the benefit of the hon member for Schweizer-Reneke!— I helped a fellow student over weekends to feed locusts—they were brown locusts from the Karoo—in that fine experimental work of the late Dr J C Faure who proved that the same locust could exist in forms as the solitary grasshopper like the Solitaria, form vast swarms and become Gregaria or something in-between called Transiens. It is time that some monument or other was erected to this great entomologist so that he can be recognised for the great work that he did in this country.
In the Karoo where the land is flat the solitary grasshopper lives year after year on the sparse grass left over by the sheep. It lives and breeds and lays eggs by the millions. These eggs can remain fertile for up to three and a half or four years and year after year the locust population tends to increase. Then came the rains which we had in November and December 1985 and they seemed excessive for the Karoo. The grass grew again, the food became plentiful and out came millions and millions of grasshoppers.
The Karoo is the ideal breeding ground for the locust as there are no trees and forests to impede swarming. It is believed that, seeing locusts wishing to swarm, a physiological change takes place in other locusts which allow them to grow larger and stronger so that they can fly long distances. It is here that the Karoo farmer and the locusts come into conflict. In order to survive the locusts eat the grass and large quantities of pasturage are devoured before the swarms take off for pastures new.
It is true that there are locust organisations established at De Aar and Middelburg which are supposed to be manned by entomologists and locust officers responsible for the extensive survey of locust outbreaks. There are supposed to be monitoring and control programmes and they are supposed to be supported by storemen and technicians. Honorary locust officers are also supposed to be appointed.
What this Committee wants to know is what went wrong in 1986. How much veld has been destroyed? To what extent was use made of chemicals which contain prohibited poisons like BHC which can remain in the fat tissues of sheep for many months, and can cause the death of mutton eaters without the cause of death being detected by a medical practitioner? Why do the farmers in the Karoo have the attitude that they have to bear the burden of preventing locusts from reaching the cultivated fields of other South African farmers?
Surely something went wrong this year. Spraying apparatus was supposed to have been supplied by the department but was not available. Supplies of poison were exhausted, and locusts swarmed and went their merry way. On the way the females matured, mating took place and eggs were laid in their millions all over the country.
The swarms have been widespread this summer, and eggs have been laid in the Cradock and Queenstown districts. The locusts have reached the maize areas of the Western Transvaal as far as Lichtenburg, Schweizer-Reneke, Mafikeng, Botswana, Cookhouse and Cradock. If good rains come this spring, we can expect large swarms which may eventually reach the maize lands of the Maize Triangle.
Unless steps are taken during this winter to control the locust swarms in the coming spring, disaster may hit the maize farmers of South Africa.
Why did this situation ever arise? That is the question I ask. As early as 10 December 1985, the following report appeared in The Citizen:
On 21 February 1986 The Citizen reported that a full-scale war was being waged against millions of locusts in one of the worst plagues to hit South Africa in 20 years. It was stated that more than 300 teams with specially equipped bakkies, helicopters and planes, and even members of the Defence Force, were engaged in combating the plague.
However, an even worse aspect of the situation was reported in this short paragraph from The Star:
Unfortunately, it was already too late. Two months had gone by, and poor equipment, insufficient poison, bad control and lack of support had allowed the largest swarming of locusts for 20 years to develop. The Star of 28 February 1986 reported that the cost of combating the locust plague from Upington to the Western Orange Free State was already costing R125 000 per day.
Mr Chairman, on a point of order: Are locusts an own affair or are they a general affair?
Yes, they are an own affair.
You are a locust!
Order! The hon member for Bezuidenhout may proceed. [Interjections.] Order!
The report in The Star quoted Mr Vermeulen, Chief Soil Protection Inspector for the area, as saying: “It is only since the beginning of February that we have been combating the plague on such a large scale.”
Order! I regret to inform the hon member that his time has expired.
Mr Chairman, I merely rise to give the hon member an opportunity to complete his speech.
The hon member for Bezuidenhout may proceed.
The following report appeared in Die Burger of 6 March 1986:
Finally, I would like to mention that Ken Vernon reported seeing both Black and White workers in the Graaff-Reinet district smothered in noxious BCH powder without any protection.
Now I wish to mention the worst aspect of this crisis. The Argus of 3 March 1986 reported the following:
Dr Furstenburg, a zoologist at the University of Port Elizabeth, said the following:
Fortunately, with the coming of winter the swarms have stopped, but the billions of eggs lie dormant waiting for the spring rains.
What everybody wants to know is what the hon the Minister of Agriculture and Water Supply has done and what he intends to do to save South Africa from another disaster.
At the beginning of my speech I said that, by allowing the locusts to swarm in the Karoo, we had created a big problem because of the consumption of the grazing. Before the advent of man and his sheep the Karoo was predominantly grassveld with only a component of woody plants and other herbs. As the number of sheep and other stock increased, the desert veld types have increased. “The desert has advanced,” says the famous Karoo botanist J P H Acocks, “and the ridiculous grazing methods destroyed the grass, the favourite food of the sheep and replaced it with the favourite food of the Karoo caterpillar. ”
This so-called “rusperkos” is the natural habitat of the Karoo caterpillar. The over-grazing has destroyed the grass and now the sheep and the Karoo caterpillar are in open competition for the same source of food. I mentioned at the beginning of my speech that the hon the Minister had attended a farmers’ meeting at Graaff-Reinet, where the farmers called for research to be instituted so that the Karoo caterpillar could be eradicated. The balance of nature is being destroyed by the farmers themselves. The National Grazing Strategy is in great trouble. What has happned in the Karoo this year is a witness to it.
There are two other factors which I wish the hon the Minister to take into account before it is too late. The market for Karoo mutton is being seriously affected as a result of this. In the Durban area there are a large number of people who are afraid to eat mutton because of the BHC problem. It appears that consumer resistance has been building up at the Cato Ridge abattoir to the buying of Karoo mutton. One farmer reported that he sent a couple of trucks to Cato Ridge. Despite the fact that the mutton was of high quality, there were few buyers and the mutton was sold at an extremely low price.
The second consequence deals with the health of the people working with the spraying of poisons. The use of BHC can have long-term effects on human beings working with it. I ask the hon the Minister to appoint a small medical team of doctors and others necessary to examine all people who worked with poisons this year, and for this team to be available during the forthcoming spring and summer. Perhaps he could borrow the necessary personnel from the hon the Minister of Defence. He owes it to the people who have done this very dangerous work.
Mr Chairman, I take pleasure in following the hon member for Bezuidenhout and want to make only a few comments on general aspects he mentioned. The matter of locusts which has now been introduced into the debate is actually a subject which belongs under agriculture— general affairs—but I wish to say that the 1974 outbreak, with which I was personally involved, was handled very much worse than the one that has just occurred and to my mind was dealt with very well. The 1974-76 outbreak enabled the State and the department to prepare itself; it did this well. If one examines statistics on how, where and at what tempo the department acted, one sees this represented a 100% improvement on any previous actions launched.
Ask the farmers; they do not say so.
As regards the farmers, I continually monitored what was occurring in my constituency and what actually happened was that circumstances were different this year. In the past swarms swarmed immediately—in other words, they hatched and gathered in vast numbers—and could then be reached and exterminated with sprays and poison. This did not happen this year. The locusts remained widely scattered and one could follow one of two courses. One could attempt controlling them over large areas by making lavish use of insecticide which actually brings the problem to the fore which the hon member later addressed. Consequently the department held back and did not immediately use insecticide on huge areas. BHC and other insecticides were used on small, concentrated areas in preference. Surely that is a sensitive approach because conventional action could not be taken as circumstances had changed. After the swarms had concentrated, they were dealt with significantly.
I now get to the matter of insecticides and their influence on people. If one looks at the total surface area of the Karoo as well as the amount of insecticide applied and one assumes that it was applied on the ground and that it has to be absorbed by plants before it can penetrate the flesh of sheep, it ultimately comes down to the fact that, in calculating how much grass such a sheep has to graze to absorb enough poison in its body to have an effect on humans, that sheep would have to eat as much as an elephant does daily.
It is at this point that we get to the matter of knowledge and circumstances which may be misleading if they are presented in the wrong way. That is why I have difficulties with what the hon member said. I think we should retain some perspective on this very difficult matter.
To take the insecticide story further, it is true that the department is now pursuing a totally new strategy and using new insecticides in low concentrations which are sprayed as fine droplets and are more effective. I shall leave it at that as I should like to speak about grazing strategy.
Will that help for mosquitoes too?
It is part of farming and we have acquired more knowledge each time …
As long as this Government is in power, plagues will assail you.
Order! It is not the hon member of Langlaagte’s turn to speak now.
Mr Chairman, can the hon member tell me whether he has any idea who worked out the hon member for Bezuidenhout’s speech for him?
Order! The hon member for Prieska may proceed.
Sir, I shall leave that question to the conscience of the hon member for Bezuidenhout.
Mr Chairman, on a point of order: The hon member must realise that I took agriculture at Tukkies.
Order! That is not a point of order. The hon member for Prieska may proceed.
Sir, I request injury time, please. [Interjections.]
As regards grazing in this country, I pointed out in a previous speech that grazing areas had experienced problems over a long period, problems of overutilisation, problems giving rise to a lower carrying capacity and problems contributing to the fact that farmers could no longer farm their land successfully. There is a variety of reports on this subject and I do not wish to go into that aspect again but it is a fact which has frequently been recorded that our natural pasturage is deteriorating systematically.
Over the years something very interesting has happened. The first point of interest is that, when grazing was still good—people would certainly not have gone farming in an area if grazing an other natural resources were such that one could not farm there— there was initially enough food whereas the limiting factor was that water was not available in adequate supplies. The result was that grazing round the available water sources was used in particular.
As technology progressed and more knowledge was acquired, water was used away from its sources by means of pipelines and the division of land into paddocks. Consequently the limiting factor which initially controlled the utilisation of grazing was removed in that water was later supplied in adequate quantities. The result of this was that sections which could initially be rested because sufficient water was not available now received enough water and therefore enabled farmers to keep more stock.
If one draws a retrospective comparison with the 1933 drought, one reaches a very interesting phenomenon that at the time there were inadequate water sources available in the outside veld with the result that stock simply died although there was still food on the veld. This does not happen today because action instituted by the State after 1933 and which first enabled farmers under the old A scheme to build silos and accumulate food caused the number of animals to increase systematically on the veld because partial provision had been made for drought conditions.
In 1946 soil conservation legislation was inscribed in the Statue Book which caused inter alia pipelines and paddocks to be introduced. Oh, an entire variety of advantages arose from that legislation but it also caused the utilisation of grazing by stock to be increased appreciably up to a point in the sixties when a veld resting scheme had to be started on the basis of available knowledge.
Farmers were encouraged to rest sections of their farms and they were compensated for this. In a certain sense fanners did not play the game as they should have done but became clever and this scheme had to be changed to the scheme for the withdrawal of stock under which farmers did not altogether play the game either.
Of importance, however, is that the withdrawal of stock scheme of the late seventies was the first positive scheme which encouraged a farmer to restore his land and his natural resources and at the same time to benefit from this. The new grazing strategy which is now to be implemented is a continuation of this because we learned lessons from it. We thought that in consequence of the stock withdrawal scheme farmers would automatically convert to the application of conservation farming. Economic pressure prevented this from happening automatically, however, and the grazing strategy is therefore aid from the State to assist farmers in this conservation action which they have to continue themselves.
One of the previous speakers mentioned that the knowledge at our disposal was not always adequate to take decisions in agriculture. That is true and it is perhaps a price that we as farmers are paying for completing the old “pumpkin” form, or the old agricultural census form, carelessly and simply casting it aside to dispose of it as quickly as possible. In consequence we were later working on “pumpkin” figures. People guessed and some entered anything to be rid of the form and the price we are paying for that today is that we cannot plan if we do not have the correct statistics, facts and information. That is the reason why I encourage the people in my area to furnish correct statistics because one can only plan on the basis of true facts.
A second very important point is the question of extension officers because if people are farming and not permitted under today’s difficult circumstances to undertake any work whatsoever outside of farming, is it not possible for them to assist the State with this pasture action on a part-time basis in disseminating knowledge and bringing security to the community in such a way? [Time expired.]
Mr Chairman, I do not wish to enlarge on the hon member for Prieska’s theme. The hon member made a good speech; he is an expert in the sphere of grazing and it was interesting to listen to him. I do not wish to follow the hon member for Bezuidenhout in his locust story either as I had my say about locusts on another occasion.
It is pleasing to hear that the State President’s Economic Advisory Council is to undertake a comprehensive investigation into the rebuilding of agriculture in South Africa. The SA Agricultural Union has also requested that in conjunction with this inquiry there should be investigation of certain other matters. I am specifically mentioning this request of the SA Agricultural Union because this union is the mouthpiece of all organised agriculture in South Africa so it is important that it has directed this request to the advisory council.
It requested inter alia that the role and importance of agriculture as a primary industry be investigated. It further asked that a decision be taken in principle on the necessity for extraordinary measures for rebuilding the primary agricultural industry. In addition, it requested an inquiry into the contributions the Central Government and other sectors could make to this rebuilding of the agriculture industry. The last request was for an investigation into the preferential position agriculture should occupy in Government expenditure.
The problem attached to such an inquiry is that it can take months and meanwhile farmers become poorer by the day. The situation is already of such a nature that numbers of them have been liquidated and this process has only just started. That is why I say there is no more time for red tape; time is running out for the farmer in the Republic of South Africa. I believe this inquiry by the Economic Advisory Council could be concluded within weeks; it is unnecessary that it should drag on for months again—as usually happens.
The information which the Economic Advisory Council will require can be furnished within days by inter alia the SA Agricultural Union, the agricultural marketing boards, the Land Bank, the hon the Minister himself and his department as well as the hon the Minister of Agricultural Economics and his Department of Water Affairs which has an important contribution to make in this respect. I think the Department of Trade and Industry should also be involved in this.
My argument is that bottlenecks in agriculture and facts relating to agriculture are more than well known to the organisations and to the departments I have just mentioned. Year after year information is supplied to the Government by the SA Agricultural Union, marketing boards, the Land Bank and obviously by the departments themselves. There are capable people in these organisations who identified the problems in agriculture long ago. There are also people who have solutions to these problems to an advanced degree.
But what do we find? Every year the hon Ministers dealing with agricultural matters are faced with the same problems. I am very sympathetic towards them because I believe that, in consequence of the current composition of the Cabinet, time and again during debates in this House they have to say they will look into problems. They will supposedly look into this or that problem. To “look into” a problem has become customary terminology in the agricultural sector in South Africa. I think the time for looking has long passed; the matter is too urgent now. [Interjections.] Action is called for now, not merely looking, otherwise we shall have a situation in which thousands of farmers will have to leave their farms.
Apart from good human material that will then be lost to agriculture, a shortage of food will also arise in South Africa. If the situation were to deteriorate so much that farmers had to leave their farms, we should have the situation of not being able to keep pace with food requirements of a continually growing population in South Africa.
Up to the present farmers have attempted to keep their workers on the farms as far as possible, but, if this situation does not change soon, I believe we shall find more unemployed in this sphere in the near future as well because labourers will have to leave the farms as farmers will simply not be able to afford to keep them there any longer.
I have said bottlenecks are known. A few of the reasons for the poor position of the farmers are connected with rapid increases in input costs, the domestic inflation rate, the sudden abnormal increase in interest rates, low incomes, drought, frost damage— with consequent failed harvests—and production prices which are too low compared with high production costs. Numerous farmers have found that their collateral for loans has already run out.
The interest on the enormous burden of debt of R11 400 billion amounts to almost R2 280 billion and that works out at approximately R38 000 per farmer—and that is the interest burden alone. I do not believe it is possible for agriculture to extricate itself from its problems by higher production. The majority of farmers already produce on an optimum level of profitability in the light of the circumstances under which they are farming. Consequently it is no longer possible nowadays for a farmer to say in colloquial farming language that he can farm himself out of trouble (“los kan boer”). The agricultural industry will simply have to be treated in a different way when priorities are examined. A decision will have to be reached on the extension of a system of carry-over debts over a longer term and co-operatives not previously incorporated in the system will have to be forced to do this. In conjunction with this, a system of real subsidisation of the producer will have to be applied. The inflation spiral simply has to be broken and this cannot be done by an increase in interest rates; that is impossible. There will have to be price-fixing and freezing as regards production costs and at the same time we shall have to exercise control over all producer prices.
In the past so-called strategic industries arose, which were not actually strategic, and such industries were assisted whereas agriculture—which is strategic—did not receive the necessary attention. For economic as well as strategic reasons our country will have to see that adequate amounts of food can be provided to the population at a reasonable price in the years ahead. This can only be done if farmers are kept on their farms.
Mr Chairman, the hon member for De Aar will pardon me if I do not respond to everything he said. I should like to assure him that I do not share his concern that the State President’s Economic Advisory Council will not respond very quickly to the terms of reference received.
In opening my argument, I wish to make a few statements on the provision and acquiring of credit without enlarging on this in detail. Firstly, the taking up and granting of credit is an inextricable element of our economy. Secondly, credit affects the two facets of supply and demand just like any merchandise. It is a fact that both the supply and demand for credit rise in times of economic prosperity; it is part of the process of economic revival. There is no fault to be found with this as long as it takes place according to sound financial principles. I now wish to state that, during the economic revival and growth at the beginning of the eighties, offers of credit were made in reckless, irresponsible and even aggressive manner by all suppliers of credit in South Africa—commercial banks, furniture dealers, the motor trade, financial institutions and all forms of credit grantors.
Not only was credit offered in a reckless and irresponsible way; the offer of credit was taken up in the same reckless and irresponsible way by a large number of individuals and organisations. Then economic recession and devastating drought followed. Credit or debt which was entered into in good faith in the good years had to be extinguished at increased—in many cases even doubled—interest rates. Those who had offered credit in an irresponsible way then recovered that debt in a reckless and callous manner. And in this way thousands upon thousands of victims succumbed to the fever of debt on all fronts.
On analysing the causes of these almost limitless economic casualties, I consider one of the main reasons for the disaster of so many insolvencies—a disaster which struck so many people—was pure ignorance; ignorance of successful financial management and planning. I am of the opinion that a repetition of personal economic disasters of the present and the recent past could be avoided by means of a national effort to instil and inculcate financial management and planning into every citizen of this country. It has become the duty of the family, the school, the Church and of every voluntary organisation which operates in the sphere of community life.
Fathers and mothers should plan and manage their financial affairs with their children from the earliest stages; in this way financial planning would become an inseparable part of life style. Parents should stop assuaging their consciences for neglect of their children by means of pressing unsuitable and inordinately high amounts of pocket money on them. Such action is not conducive to cultivating a concept of thrift and planning among our children. Our young boys and girls leave school in most cases absolutely defenceless against the totally irresponsible onslaughts—in too many cases—of conscienceless credit grantors. Consequently, Mr Chairman, I believe we should make a start as soon as possible in our schools— as part of our youth preparedness programme—with guidance and information on financial planning and management to arm our young people against unscrupulous exploitation of credit needs.
The Church should actually make it its business to disseminate this message and knowledge. Christ’s command that we render unto Caesar the things that are Caesar’s and to God the things that are God’s certainly implies financial planning and management in order to carry out this command. Every voluntary organisation operating in the sphere of community life should assume the task positively and actively of informing and guiding its members.
Mr Chairman, I have ranged far afield ultimately to arrive at the farmer and farming interests. After all, every citizen of this country is subject to the possibility of infection by the germ of debt fever which claims so many victims. This not only applies to the farmer or the salaried person—it applies to everybody. Our farmers have certainly been very hard hit by the circumstances I sketched at the start of my argument. This has been aggravated to a marked degree after a devastating drought has affected our farmers in addition. I hope and pray it will never recur that a young farmer in the direst distress under pressure of his enormous burden of debt will have to admit that he lost his head regarding the acceptance of offers of credit.
I want to direct an urgent appeal to farmers’ associations and farmers’ unions, cooperatives and study groups and everyone involved in agriculture to make it a priority to inform and guide their members on financial management and planning. They could organise regular courses of study on this vital matter. I wish to request the SA Agricultural Union, in conjunction with the University of South Africa and the extension service of the Department of Agriculture, to draw up courses on financial planning and management to be made available to members of our farming community and others who could possibly be interested. In addition I wish to request the Department of Agriculture and Water Supply to recognise these courses by including the question on the State application form for financial assistance whether the applicant has attended or taken a course or courses of study in financial planning and management.
I wish to go even further and request that the possibility be investigated of designing a system by means of which our farmers could do tests in this field. A certificate could then be issued and attached to an application for State aid. It could act as a recommendation in the consideration of such applications. Similar certificates could also act as recommendations among other credit grantors.
Mr Chairman, the hon member for Kimberley North will pardon me if I do not pursue his theme as there are a few other matters regarding agriculture I should like to raise.
In the first place, the hon the Minister referred this afternoon to the fact that South Africa was one of six or seven exporting countries in the sphere of agriculture. In connection with this the hon the Minister of Transport Affairs stated earlier this year in the House—I have his Hansard in my hand—that South Africa had to buy 200 000 tons of maize from Zimbabwe last year and that this had nothing to do with the Government. How else, he asked at the time, were the 200 000 tons of maize the farmers wanted to see us through to the first harvest in May to be brought to South Africa? He asked whether this was to be carried on their heads or transported by train. He then tried to shoot down the point I was attempting to make as “that type of HNP story”. Subsequently—actually immediately afterwards— Dr Gouws, the General Manager of Nampo, issued an official statement pointing out that Nampo was the only representative body of maize farmers and that the producer members of the Maize Board had been appointed as such on the responsibility of the hon the Minister and afterwards suspended as members by Nampo. How can the hon the Minister of Transport Affairs appeal to those gentlemen? How can he tell us they represent maize farmers? How can he come and say they had the authority to say that maize should be imported?
Nampo said it absolutely dissociated itself officially from the decision to import white maize from Zimbabwe. Nampo said the 200 000 tons of maize could have been done without and continued that it was a small percentage of the meal and this problem could just as well have been dealt with by mixing in a little yellow maize. According to Nampo this would have been adequate. Nampo said this; they are not HNP tales.
I therefore want to say—and leave the point at that—the hon Minister concerned deceived the House that day.
Order! I have to point out to the hon member for Sasolburg that neither the importing nor the handling of maize by SATS nor the policy on its importation fall under the Vote of this hon Minister. [Interjections.] The hon member may proceed.
Mr Chairman, I mentioned it merely in consequence of the hon the Minister of Agriculture and Water Supply’s statement this afternoon that, if one wished to discuss the position of agriculture, one had to consider the important point that South Africa was an exporting country. I therefore wanted to point out that it had not happened in this case.
In addition I wish to point out that the hon the Minister of Agriculture—that is not the junior Minister but the big Minister— said at Potchefstroom earlier this year that world agriculture had been plunged into crisis because production greatly exceeded demand. I shall not argue with the hon the Minister on this but the agricultural crisis of the world lies very far from South Africa. The agricultural crisis of Africa lies much closer as appears from the fact that most African countries, or at least many of them, cannot feed their own populations. People are pouring here over the borders from Mozambique among other reasons because they are dying of hunger.
The agricultural position of South Africa which has to be discussed here this afternoon is, as you so justly remarked, Sir, in a horrendous condition. We are experiencing an agricultural crisis. It has already been said that South Africa has never found itself in an agricultural crisis to equal that of today.
In this regard I wish to associate myself with the criticism expressed by the hon member for Barberton here this afternoon. We also find it distressing that the hon the Minister did not come up with a short-term plan in this crisis. Up to the present no one in this Committee, with the exception of the hon member for Ermelo, has even referred to the immediate needs of agriculture so I wish to submit four points to the hon the Minister.
Firstly, the prospect of a further disastrous year of drought demands an immediate, general debt and interest standstill in the agricultural sector of the summer rainfall area.
Secondly, the principle now has to be accepted that the entire country has to bear the burden of the vicissitudes of the South African climate and not only the 60 000 or 70 000 farmers remaining. [Interjections.] The debt and interest standstill would cause the full weight of the approximately R11,5 billion in agricultural debt to be lifted from the shoulders of farmers in the summer rainfall area and prevent the collapse of large parts of rural areas in the Transvaal and Free State as well as portions of Natal and the Cape Province.
In the fourth place, the amount involved should only have to be repaid in the long term by means of a general levy on agricultural products at commercial level. The State should guarantee new production credit by co-operatives and the Land Bank.
I am delighted at an announcement which appeared on the front page of Die Burger today. According to this the State President’s Economic Advisory Council is to conduct a comprehensive inquiry into the rebuilding of agriculture in South Africa. I wish to request that the body concerned first examine its point of departure and the principles on which its inquiry is to be based. It should reject the principle which so greatly influenced agriculture in the past decade and more.
I am referring to the principle which took root under the influence of people such as Dr Chris Neethling and Dr S J du Plessis. Their point of departure was that larger farms could produce more cheaply than smaller ones. They further argued that in consequence of this there should be more large farms and fewer farmers. This policy obviously succeeded because farmers’ numbers dropped from 100 000 thirty years ago to 65 000 at present. By the end of this century there will probably only be 20 000 remaining farmers.
I appeal today that they should adopt a new principle as their point of departure. They should examine the absolute necessity that a people should have a strong, healthy, flourishing and developing agricultural community because it cannot survive otherwise. There is no future for the Afrikaner people and the White man—nor for the Blacks—in Southern Africa if the agricultural community does not grow and develop. Consequently we ask them to consider a few matters in this respect.
I want to formulate the new principle in this way: While a growing people is urbanising, its existence is subject to the condition that its farming class should be numerically sufficient to fulfil the function of a steadfast national core. They should be ultra-modern technologically but attached to tradition in their ideology and view of life.
This principle contains important ideas. I wish to request that the Economic Advisory Council make this its point of departure and reject the previous old principle—that of the people to whom I have already referred— which caused so much devastation among our agricultural population to the detriment of the entire Afrikanerdom, the Whites and the entire population of Southern Africa.
I wish to refer briefly to a few points on this head: (1) The evil of land barons should be phased out. (2) Water policy should be reviewed to make new and larger irrigation schemes possible. There should be compulsory recycling of municipal and industrial water. (3) There should also be compulsory occupation of farms by Whites as a nationwide measure against absentee ownership. (4) State aid at realistic interest is necessary in establishing young farmers on farms. (5) The promotion of the export of agricultural products such as wool and maize is essential with export benefits and improved transport facilities where necessary. Another important point touched upon this afternoon is (6) the establishment of a tradition of hereditary farms specifically as in northern Germany. (7) Agricultural control boards which are in the process of failing under the current ministerial dictatorship should be placed under an elected agricultural authority.
I put this principle, provide a few guidelines and appeal to the hon the Minister to see that this body which is now to conduct the inquiry follows these broad guidelines.
Mr Chairman, half of what the hon member for Sasolburg said reeked of socialism; I do not wish to reply to it.
In my opinion the speech which the hon the Minister of Agriculture and Water Supply made here this afternoon in this Committee is one of the most authoritative speeches on agriculture that have been made here for a very long time. In the past this Government has been accused of adopting only short-term strategies to patch up agriculture and tamper with it here and there. This afternoon the hon the Minister spelt out some of the long-term strategies. Many of them are based on the goals which have been set out in the White Paper on Agricultural Policy in South Africa. I wish to thank the hon the Minister for what he said here this afternoon. If much of what he said were to be applied in our agricultural industry, the agricultural sector would in my opinion remain far more competitive with other sectors of our economy.
I wish to say a few words about agricultural extension services. The hon the Minister indicated a week or two ago that for the present the Government would not be prepared to accept the recommendations of the Kolb report—that is the Commission of Enquiry into Agricultural Services. I wish to support him wholeheartedly in this decision and I should like to motivate my support.
The essential recommendation of the Kolb report was that an agricultural development board be created. This would be a statutory board and would take over control of all agricultural training, extension services and research in South Africa. All sectors, namely the co-operative sector, the private sector and the State, would contribute to the financial funds. The priorities for training, extension services and research would be determined by this board and they would also be implemented and made available to the farmers in that way.
With reference to the White Paper on Agricultural Policy, the State has accepted responsibility for agricultural training, research and extension services. It is Government policy and the State is not unwilling to afford the private sector or other sectors in our economy that wish to deliver these services an opportunity to do so. It is also stated in the White Paper that the State is there to ensure that those services would be of a high standard. The State therefore undertakes to perform the functions which cannot be performed by the other sectors concerned.
Let us take a look at the situation of agricultural services at the moment. There are 2 594 agricultural experts in South Africa. They are graduates who serve agriculture. That means that there is an agricultural expert for every 27 farmers in our country. Two thirds of these agricultural experts are in the employ of the Department of Agriculture. Consequently there is approximately one official for every 40 White farmer.
As far as agricultural training is concerned, one can see that the State assumes most of the responsibility for agricultural training by means of subsidies and along other avenues. As far as agricultural research is concerned, the State provides more than 90% of the manpower requirements. Only 73 of the 816 agricultural researchers are employed by co-operatives.
As far as extension services are concerned, an appreciably different picture is presented. Of the 682 agricultural advisors the State employs 26%, the private sector 28% and the co-operatives 45%. The State therefore plays an inadequate role in as far as the provision of agricultural services are concerned.
In the agricultural section there is the problem especially as far as agricultural guidance is concerned, that the messages which are being received from various extension organisations differ from one another. It is a principle in agricultural extension that the message that is conveyed to the farmers must be as uniform as possible in order to ensure thereby that the necessary persuasiveness and influence can be exerted.
As regards the conveying of a uniform message by agricultural extension the recommendation of the Kolb report, too, is precisely in accordance with this principle. This will ensure that a uniform agricultural extension message is conveyed to the farmers.
What is also true in extension science is that one is dealing with a conscious and unconscious need for advice amongst farmers. This is clearly illustrated by the figures which I quoted in connection with people who are in the employ of the State, the private sector and co-operatives.
With regard to grazing control for example, all of us that have had anything to do with agriculture know that it is more or less something which we can call an unconscious need for advice. As far as the application levels for fertiliser are concerned, there is, however, a conscious need for extension services.
Consequently I maintain that agricultural extension in South Africa should be market orientated. There is market for agricultural extension from the private sector which can provide specific extension and can meet the conscious needs for extension services of the farmer. I also maintain that the responsibility for the provision of the unconscious needs for extension and advice rests with the State, and that the State must be prepared to accept that responsibility.
It is also in my opinion the State’s responsibility to ensure that the necessary co-ordination exists in agricultural extension provided by the co-operatives, the private sector and the State. It is the task of the extension officers in the employ of the department to ensure that the system of co-ordinating committees, which has already been established in the Highveld region and elsewhere, is established throughout South Africa.
There is also another factor which we must consider. Increasingly there is the tendency on the part of marketing boards for each one to put its own extension service into operation. The marketing boards are statutory bodies which have been established by law to handle and market the farmers’ produce. It would appear to me as though too much money derived from levies is in the hands of these boards, and that as a result many of them want to establish their own extension service, thereby luring away the few agricultural extension officers who are still in the employ of the State. Eventually it is in fact going to lead to a fragmentation of the State’s responsibilities with respect to extension services as well.
Therefore I make an appeal to the hon the Minister to adhere to his standpoint that we do not accept the recommendations in the Kolb report, because on the one hand I think it is going to bring about a bureaucratisation of the entire extension service movement in South Africa, and on the other, a large portion of the private sector is going to see it as an opportunity to refrain from making the financial contribution to the overall agricultural extension movement in South Africa which it ought to be making. They assume that with the establishment of an agricultural development board they will be able to escape this responsibility. I also appeal to the hon the Minister to ensure that the State’s responsibility is not further fragmented through unnecessary demands on the part of the marketing boards for each to render its own extension services.
I admit that there is specific specialised extension which will have to be provided by the marketing boards in certain cases, and one shall have to listen to requests with a willing ear, but in my opinion the large majority of the marketing boards ought to use the instrument which is being made available by the State, namely extension service of the department, to convey the necessary messages to the farmers.
Mr Chairman, I should like to pick up where the hon member Dr Odendaal left off and just add a few ideas concerning extension and extension officers.
In my opinion one of the greatest problems which we have with extension officers is that many of the young men who leave the universities or the agricultural colleges, work for a very short period for the department where most of them begin. After three, four or five years we find that these men move on and either start working in the private sector or at one of the co-operatives. The reason this is in my opinion that these people often do not enjoy the job satisfaction they ought to enjoy. Now one should ask what the reasons for this are.
One of the reasons is, I believe, that these young men are transferred too often and too soon. I get the impression that such a young man, before he can really immerse himself in his sphere of activities and before he can really gain the confidence of the farmers to whom he gives advice, is transferred to another area and has to start all over again. I think that is one of the problems. A second problem is that many of the farmers, often those who have received financial assistance from the State, are not forced to adopt a specific farming plan. Hon members will perhaps remember that we on this side of the Committee did propose a few years ago—I think it was as early as 1979—that every farmer who successfully applies for financial assistance, be forced to operate according to a plan. In that year, the motion I introduced was rejected by most of the hon members on the opposite side of the House, and I was told that we were trying to compel the farmers to go in a specific direction.
Since that time the policy has changed somewhat, and I know that the hon the Minister himself has started to think, or has begun to agree with me, that a farmer who applies for financial assistance should at least be compelled to work according to a programme. This must be done in order to ensure that he runs his farm in a reasonably scientific way.
If we were to do this, we would also give the agricultural extension officer the opportunity of not only providing an extension service, but also of reporting whether the person concerned has in fact adopted the advice given to him. I think it would help to give those people a better grip on things in the area in which they are working and they will also derive greater job satisfaction from it. They would then most probably continue to work for the department for a longer period of time and the Extension section of the department would then be able to operate in a more forceful way.
There is also another subject I wish to deal with. I wish to tell the hon the Minister that the times in which we are living, are characterised by a great deal of urban unrest. It must not be thought that I am moving away from agriculture now, I am returning to that subject immediately.
This is not an appropriate time to discuss the reasons for that urban unrest, but hon members will agree with me that one of the great contributing factors is the rapid rate at which urbanisation is taking place. Most of the new urban dwellers come from the Black homeland areas, but a large number of them come from what are referred to as White farms. I am not sure what the statistics are, but I tend to believe that the number of workers in agriculture has declined rather than increased over the past few years.
The problem of urbanisation is therefore partly due to the fact that Black workers are leaving the rural areas. I believe that the Government must take this fact into consideration and that the hon the Minister must see what can be done via his department to help the farmer to keep the worker on his farm and consequently in the rural areas. The question is what can be done in order to help. One of the spheres in which assistance can be rendered is housing, which has already been referred to.
Last year there were only 135 applications for financial assistance for approved housing. That is simply not enough. I know there was a shortage of funds, but it is of cardinal importance that more funds be made available for housing so that workers can remain more permanently in their present places of abode.
A second factor is the amount that is made available for a house. I think the amount is between R3 000 and R4 000 per house. Today it is simply no longer possible to build a house that includes electricity and running water and which is suitable for a worker in agriculture for R3 000 or R4 000. The amount is simple too small.
Furthermore it is compulsory for a farmer who applies and receives assistance for housing to take a bond on his land. I think I am right when I say that that is still the case today. It is too expensive, it takes too long, and in any case why should a farmer have to take a bond on his whole farm if he simply wants to borrow a few rands to provide housing, especially when one takes into consideration that the loan which he takes out does not help to push his production on a direct basis (to increase his production?) One could almost argue that such a loan should not be granted to the farmer, but to the workers in that sector. It is an advantage which the whole community enjoys, and not specifically that farmer only.
I should like to recommend that very serious consideration be given to doing away with the necessity of registering a bond. I think it would help if this were done.
I merely wish to point out—other hon members also referred to it—that the whole question of housing in agriculture is beginning to acquire a political connotation. We who are responsible for the well-being of agriculture, and the hon the Minister of course, must prevent this from happening. I do not want to criticise the other Houses, but I have heard that the debate there has begun to revolve around housing for Coloured farm workers. We must try to prevent this matter from becoming a political football. There are people in the community who believe that it is easy for the farmers to get loans, and that it is easy for them to build houses with a loan, but that they are not prepared to do it. I think we must put a stop to ideas of this kind.
Another recommendation which I should like to make, has to do with a form of assistance which can be equated to the financial assistance which is given in border areas. We are aware that over the past 10 to 15 years the Government has invested large amounts of money in industries other than the agricultural industry in order to create border industries. The purpose was to create job opportunities for people, similar to those which exist in the agricultural sector. Why is such assistance being made available to other industries, but not to the farmers as well?
I know of many farmers in the Eastern Cape for example, whose farm workers have left their employ in order to work in the border industries, where the owners of those industries, because of the financial assistance they receive, were able to offer far better wages than those in the agricultural sector were able to do. In the cases to which I am referring, some of those workers who left their jobs on the farms, nevertheless continued to live on the farms. The farmers simply cannot compete with factory owners receiving such assistance as that to which I have just referred.
I think the Government must give very serious consideration to rendering assistance to certain other areas at least; not only to the far North-Western Transvaal or the Northern Transvaal. I have nothing against the rendering of assistance there, but if it has to be done, other areas as well, bordering on cities, could receive assistance to enable them to compete with others under these circumstances. [Interjections.]
Mr Chairman, it is a pleasure to speak after the hon member for Wynberg. He made a very interesting speech, and I cannot differ with what he said, but he will pardon me for not expanding upon it due to a lack of time.
The fact that the State President ordered an enquiry into the reconstruction of agriculture in South Africa, has brought us to a point where it has become essential that urgent decisions be taken in order to guarantee the continued existence of our farmers in South Africa. It has become necessary for a totally new strategy for agriculture to be worked out. During the past 25 years the number of farmers on our White farms has decreased by 40 000, so that there are only approximately 60 000 White farmers at the moment. I predict that this number will diminish even further, due to the present economic circumstances the farmers are experiencing at present, which means that the rural areas will depopulate further.
There are probably various causes which have led to this situation over the past few years. A number of hon members have already referred to this. The tremendous drought, the high rate of inflation, with the associated high input costs and high interest rates have been mentioned, but I wish to add low produce prices and overproduction of most of our products. I also want to add a matter which the hon member for Kimberley North referred to, viz bad financial management by the farmers themselves.
Three interest groups are involved in the creation of a future strategy for agriculture. In the first place there is the farmer himself, the farmer as the individual entrepreneur who has to evaluate critically and objectively the viability and survival capacity of his own farm, and who also evaluates the separate industries in which he operates, in an unprejudiced manner.
In the second place there is the creditor. As a financier he assesses the risk of his investment according to purely financial considerations as well as the effect which his conduct as financier will have on the socio-economic wellfare of the area concerned and the effect it will have on the farmer himself.
In the third place there is the Government. As the policy-maker and the creator of an economic climate, the State will firstly have to decide how, and secondly to what extent, it is going to act as a supporter as far as its extension service function is concerned in future, to which reference has been made, here repeatedly this afternoon.
Perhaps we can add our marketing system and our marketing boards as well as co-operatives which act as marketers of agricultural products.
There are, a few very important principles which must be strongly emphasised, however, and which must be viewed very clearly when we come to a strategy for agriculture. These are—and I want to emphasise this— that arrear debt and the interest on arrear debt can only be paid by profits. I repeat: Only profits can pay arrear debt and the interest on arrear debt. In addition, agricultural financing must be directed at the entire farm, and not only at a specific product or equipment or livestock.
Furthermore, the farmer’s management ability and his financial management, as well as its planning must be assessed much more highly. Perhaps the problem in the past was precisely that extension services were concentrated mainly on production. I therefore hope that future extension services will be directed to financial management, budgeting and the effective keeping of records to a greater extent.
In addition, the production potential of each farm should be determined for the proper planning of crops as well as livestock farming. Despite the periodic droughts, the greatest problem in South Africa remains the surpluses of virtually every product produced in South Africa. Of the 22 agricultural control boards, 20 are in fact surplus removal schemes. The only two real control boards are the Wheat Board and the Maize Board. The Maize Board’s greatest problem remains the surplus problem and the sale and removal of surplus maize, however. Maize is one of the most important agricultural crops in South Africa and it constitutes approximately 37% of the yield of all agricultural crops in South Africa. Perhaps the problem is precisely that there is too much emphasis on the cultivation of maize. Apart from the tremendous world surplus of maize and the fact that we can no longer compete on the world market as far as prices are concerned, the urbanisation of the Blacks in particular has led to a relatively strong decline in the consumption chiefly of white maize, for which there is absolutely no demand in world trade.
I foresee that with the abolition of influx control, which in my opinion will speed up urbanisation even more, this tendency will continue. Maize will eventually be used mainly as fodder, and pricewise it will also have to compete, with other products available in the trade. I believe the time of cultivating maize on large surface areas at low yields has passed. Everything possible will have to be done to withdraw all marginal land from the cultivation of maize in order to improve the average yield considerably and to cultivate maize only on land with a potential yield of, for example, three tons and more per hectare. I should like to give hon members the latest statistics concerning the average yield per hectare in the most important production areas over the last ten years, which, I think, is a reasonable period of time. If one takes into account that at the present price of maize the production costs for the yield of say between three and four tons is in the region of two tons per hectare, the picture is not at all promising. In the Transvaal Highveld it is 2,3 tons per hectare, in the North-Western Free State it is 2,05 tons per hectare and in the Western Transvaal it is 1,99 tons per hectare.
I think the time has come for prices—I want to emphasise this—to be determined at the beginning of the planting season in future so that each producer can make his calculations in advance and can determine himself whether or not he wants to plant maize. As with many other products, it can even be regarded as a floor price.
Perhaps the time has also come to guard against maize being priced out of the market and the input costs’ determining the price. The price should rather determine the input costs. While I am referring to input costs, we are grateful that the hon the Minister has ordered an enquiry into this, but I must issue an immediate warning that we should not create the expectation among our farmers that this will solve all the problems. I trust the enquiry will yield positive results, but I do not think it will do anything for our farmers’ present financial position.
Much more attention will also have to be given to the marketing of other agricultural products. The National Marketing Board is engaged in an enquiry into the activities and functions of all the boards at present. I trust that they will also devote attention to the idea of transforming the boards into real marketing boards. At present we have 14 excellent national markets for fresh produce. Does marketing really take place there, however, or are these merely places where products are sold? Ever since there have been no auctions, no one can explain how the price of potatoes, for example, is determined. Are the marketing agents marketers, or do many of them simply write out invoices?
Surely marketing means a business activity connected to the selling of products, the search for clients, the opening of markets, and the creation of competition to negotiate the highest prices. It is no wonder, therefore, that the price of potatoes and many other vegetables is still the same as it was ten years ago. The hon the Deputy Minister of Agricultural Economics and of Water Affairs said during the discussion of that Vote that the boards would have to be much better marketers. I agree with him.
I wish to associate myself with hon members who said we would have to look very deeply into the credit system and the hire purchase system in particular. According to our hire purchase system, it is possible for farmers who are no longer creditworthy to acquire, without any problem, tractors, implements, and even livestock, which they cannot afford in any way, by means of hire purchase. In most cases, the financial difficulties of farmers I spoke to, were caused by arrear payments and interest on hire purchase contracts. [Time expired.]
Mr Chairman, at the outset I should like to convey my thanks to the officials of the department, from the head of department to the technical officer in my constituency, for the way in which they deal with one’s problems in an attentive and sympathetic way. I also want to refer specifically to the staff of the Agricultural Credit Board who are under enormous pressure in dealing with matters at this time.
I was very pleased to hear about the hon the Minister’s strategy this afternoon, but, like other hon members who have mentioned this, I think he should take cognisance of our need to know what the Government’s plan is in respect of the present acute crisis. There are people in my constituency at the moment who are waiting for the telephone to ring to hear what assistance may be announced for them in the hon the Minister’s speech.
The hon the Minister knows about this and during the course of the debate I should like to hear something from him in this connection, because at the moment the farms east of Messina are emptying. I would rather not mention the number of farmers that are left. I am also very worried about the situation in the Mooketsi Valley where the drought is absolutely oppressive at the moment.
While the hon the Minister’s strategy is worked out and implemented, we shall have to do something to tide things over in the meantime. That is why I say he will have to give very serious thought to an interim moratorium for the striken farmers. I am not proposing a general moratorium, but merely an interim measure in respect of the farmers who are in an absolutely critical position at present.
As far as Act 87 of 1979, in terms of which the population density must be promoted, is concerned, I want to know how he is going to apply that Act in respect of farmers who are leaving their farms at the moment. I am worried that some of these farms, of which some revert to the State and others are sold to the private sector, will be snatched up by people who are sitting and waiting because the prices are very low at the moment. How is the hon the Minister going to reconcile those two situations, viz people who are snatching up the farms, but are not going to ocupy them, and the application of this legislation? I think this deserves our very urgent attention.
As far as the outline of his strategy is concerned, instead of looking at the problems on a national basis, one must think of doing so quickly and seriously on a regional, a subregional, an area and an environmental basis. In seeking solutions to our problems, we shall also have to lean very heavily on the co-operation of organised agriculture on the regional, subregional and even environmental levels.
Since the hon the Minister is creating the opportunity now to assist tenant farmers or part-time farmers on their way to full-time farming, I want to suggest that this can also be considered for existing farmers so that in these oppressive times they can make use of that facility as well. They must be utilised to identify and monitor project farming on a regional level. I want to ask the hon the Minister to consider projects in his strategy, as he put it in one of the points he mentioned—I think it was point 3—to identify farming systems and practices, at variance with the principles of optimal farming utilisation. Conversely, in my opinion, project farming must be identified for specific areas where financing is done in a special way to encourage project farming either as supportive farming or total farming as against ordinary farming. I think the hon the Minister knows what I am referring to; I have written to him fully in this connection.
Undeniably agriculture is a barometer of the total economic and general conditions in the country. If the one is doing well, this is reflected in the other. I think we must tell one another that unless the general conditions in this country improve, we see no hope for agriculture. I want to ask the hon the Minister whether, during the course of this debate, he can tell the farmers of South Africa that he sees light ahead and, if so, what light that is.
In this connection I want to associate myself with one of the points he raised. He spoke about the uneconomical farming units, but I want to tell him that units which were economical became uneconomical units as a result of conditions which developed in the country. If we can develop a desired general and farming situation, uneconomical units should become economical units once again, without being enlarged.
I said the general conditions in the country are reflected in agriculture. The semi-annual prestige Bonsmara auction took place at Pietersburg yesterday. I want to tell the hon the Minister it was an absolute catastrophe. I shall give him yesterday’s prices as compared to those of 1981 so that he can see what happened at the Bonsmara auction. In 1981 the average price of bulls was R3 590, but yesterday’s average price was R1 590. The price therefore decreased by R2 000 per bull. In 1981 heifers went for the average price of R1 368, but yesterday they went for an average of R785. Cows went for an average price of R1 452 in 1981; yesterday they went for an average of R888.
This is the second or third catastrophic cattle auction which has taken place during the past month or six weeks. That is why I say that the whole condition prevailing in the country at present is reflected in the economy. The present conditions are affecting the meat industry just as adversely as the rest of the industry.
Mr Chairman, the hon member for Soutpansberg will pardon me if I do not add anything to what he said. These are matters that will be dealt with by the hon the Minister in his reply tomorrow.
In this speech I should like to give attention to the border areas of the Northern and North-Western Transvaal, also known as the designated areas. The input made to this area by the Department of Agriculture and Water Supply’s Directorate of Financial Assistance is the granting of assistance in terms of the Designated Areas Development Act. That is Act 87 of 1979, as amended. This Act must be read together with the Agricultural Credit Act, Act 28 of 1966, as amended. The purpose of this financial assistance from the department is to make a fundamental contribution to the development and stabilising of these particular border areas.
According to the Department of Agriculture and Water Supply’s annual report, an amount of R6 500 855 was spent on assistance to farmers in the designated areas between 1 April 1984 and 31 March 1985.
What is significant, however, is that during the mentioned period, of the 61 applications for land purchases that were submitted to the Agricultural Credit Board by farmers, only 13 of those applications were successful. The department’s commentary on this considerable difference between the number of applications received and those granted, was significant. The annual report says that this state of affairs can be ascribed mainly to the exorbitantly high land prices, and to a lesser extent to the poor financial position and the applicants’ insufficient knowledge of farming. What this amount is to is that one cannot find much fault with the jockey who has to ride that horse; the problem lies in a different sphere.
This is precisely where it becomes a problem to increase the density of the population in the designated areas. Young people who want to purchase land to settle in those designated areas, normally do not try to purchase land from farmers who have been living in those areas for a long time. The young farmers and the prospective farmers generally want to buy land from fellow-farmers who do not live in those areas permanently; perhaps from farmers who have more than one farm, or from professional people who live in towns and cities outside the designated areas.
Because a very large number of the latter group of land-owners are not dependent on farming as such for their daily existence, they are the people who charge exorbitantly prices for land as soons as someone is interested in buying. When an application for a mortgage loan to purchase such a property is submitted to the Agricultural Credit Board, the prospective purchaser’s application is rejected because the board feels that that specific land is too expensive. This means that, as a result of those high land prices, we immediately lose young farmers who could possibly live in those areas, whereas in fact we want those areas densely populated. [Interjections.]
In the meantime one finds that a number of farms in these border areas are lying there, uninhabited and uncultivated. The manner and period of occupation is governed by sections 7 and 8 of the Designated Areas Development Act, Act No 87 of 1979. This occupation is specified precisely in the Gazette of 6 May 1983, and I refer hon members to proclamations 957 and 958.
The problem, however, is that these arrangements which are made with reference to the submitted details, are applicable only to farmers who merely become involved in this arrangement in any case if they already …. I want to correct what I have just said. The problem, however, is …
Order! I am afraid the hon member will have to rectify this on a later occasion.
Business interrupted in accordance with Standing Order No 19.
Progress reported and leave granted to sit again.
The House adjourned at