Title: The success factors in the development of emerging farmers in the agricultural sector within the North West Province of South Africa
Dr AS Pelser
North-West University (Mafikeng Campus), South Africa
Prof T Pelser
UKZN, Graduate School of Business & Leadership
Ensovoort, volume 43 (2022), number 4: 3
The South African Department of Agriculture dedicates large development funds to develop agricultural entrepreneurs. The Comprehensive Agricultural Support Programme (CASP) was established in 2004 to provide non-refundable grants to emerging farmers. The CASP fund’s goal is to help emerging farmers become prosperous SMMEs in the agribusiness sector by providing capital and post-settlement support. Since the grants did not add value and the targeted emerging farmers were ineffective year after year, the majority of the funds spent on CASP in the North West province have been declared as fruitless and wasteful expenditure by the auditor general. The main objective of this study was to determine the success factors in the development of emerging farmers. A qualitative study was done, with interviews held with main role players in agriculture. The key finding and the core of the result to this study is to empower and giving skill to those emerging farmers who must become self-sustainable and independent commercial farmers. To achieve this, emerging farmers need technical support, equip emerging farmers with what is needed for farming, training and empowerment is important and to communicate report and engage with all stakeholders in agriculture. For this to happen government should also seek to establish alliances with private institutions (i.e. agribusinesses, financial institutions, organised agricultural) to form public/private partnerships in their search for successful development of emerging farmers in agriculture.
Keywords: Farmer, farming, entrepreneurs, agriculture, skills development.
Farming was considered a source of living in both rural and urban areas until the increasing trend of the population caused this perception to be changed into a business (Ducastel & Anseeuw, 2017). The Department of Agriculture, nationally and in the North West province, annually spends a substantial amount of development funds in an effort to create entrepreneurs in the agricultural sector. This is not always successful and is failing year after year. Since all emerging farmers do not have entrepreneurship skills.
Therefore, the government and private organisations should assist emerging farmers to come up with feasible business plans. These emerging farmers should be guided on the implementation and management of the farm plans to realise a profit.
Currently, there are increasing calls to do farming as agribusiness to meet the increasing demand of consumers. To be successful in the above, proposed entrepreneurs in agriculture (emerging farmers) need to be trained in becoming successful small-, medium- and micro enterprises (SMMEs) in agriculture and eventually to become successful commercial farmers contributing to the food basket of South Africa. Figure 1 illustrates the guide of the study.
Figure 1: Guide of this study
The agricultural sector contributes three percent to the Gross Domestic Programme (GDP) in South Africa (Gov.za, 2017). Haasje (2006:47) contends that entrepreneurs have a major role to play in the development of a country, this is especially so in a developing country like South Africa. Ahwireng-Obeng (2005:15) points out that the South African government committed itself to the development of entrepreneurs in 1994 by putting strategies in place for the development of SMMEs.
In most African countries, at least 80% of people engage in subsistence farming, which creates a gap between food supply and demand from consumers since food supply cannot meet the demand (Sachs, 2018). Hence, African countries are importing food to meet the food gap in the market. Farming activities as an agribusiness in a developing context needs successful emerging farmers in the form of SMMEs to access the market.
A sound foundation to develop SMMEs in the agricultural sector was laid in the North West province by the Department of Rural, Agriculture, Environmental and Development (READ), which introduced a development fund to assist potential agricultural entrepreneurs in the North West province initiated by the National Department of Agriculture since. According to Hall and Aliber (2010:9), the development fund, the Comprehensive Agricultural Support Programme (CASP), was launched in 2004 for disbursements to farming households. The aim of the CASP fund is to provide capital and post-settlement support to the targeted previously disadvantaged group (emerging farmers) to become successful SMMEs within the agribusiness sector. Emerging farmers are defined as those previously disadvantaged farmers who want to become successful entrepreneurs in agriculture and then become commercial farmers, who are now the beneficiaries of the land reform programme.
The problem is that the initiatives of growing SMMEs in the emerging farming communities of the North West province are failing, despite much money spent. During the 2016/2017 financial year, R157m of these CASP funds was declared irregular expenditure and R14m was declared fruitless and wasteful expenditure. The same trend happened in the previous financial years. This is public money, and it reflects poorly on the government in terms of how taxpayers’ money is spent. This indicates that no contributions were made to food security and the realisation of the government initiative.
Following from the problem statement the study has the following objective:
- To develop a framework that can contribute to the successful creation of emerging farmers into successful entrepreneurs in agriculture.
Literature in support of the problem
Since 1994, with the new dispensation in South Africa, there is an agreement across the political spectrum that the government’s programme towards land reform is in severe difficulties. According to Lahiff (2008:1), the land reform programme in all its forms has transferred four million hectares, roughly five percent of white-owned land, to historically disadvantaged South Africans. Recent studies have indicated that land reform projects have limited impact on the effective production of agricultural products for the contribution towards food security revealed. According to Lahiff, this has been attributed to many factors, including inadequate planning, general lack of capital and skills shortages amongst the emerging entrepreneurs. Bates (2004:154) identifies three major obstacles to progressive operation of black-owned businesses, namely “lack of capital, contact with financial institutions and lack of managerial skills”.
In South Africa, the search for sustainable and productive emerging farmers is important for food security, as mentioned by Mmbengwa (2010:2753). It also brings the previously-disadvantaged farming entrepreneurs into the mainstream of the agricultural economy.
In the next paragraphs this study discusses the development of two neighbouring countries namely, Zimbabwe and Namibia.
According to Kinsley (1999:173-196), the first families were resettled in 1980 and until 1999 over 70 000 families have been resettled. This is well short of the target of 162 000 set in the early 1980s.Kinsley also mentions the following:
The rhetoric of the 1996 presidential elections, which presented land reform as an urgent task to be finished, the same rhetoric is conspicuous in the run-up to the 2000 parliament elections and is confronted by assessments, emanating both from within and outside government that resettlement is a failure. Along term perspective is taken, incorporating experience from elsewhere in the region that suggests that any attempt at comprehensive evaluation of the benefits of resettlement in less than a generation is ill-advised.
Gumede, (2018) mentions in News24 that the Zimbabwe’s failed populist-based land reform is a useful lesson for South Africa. He further highlights that in 2016, the Zimbabwean president declared a state of disaster for agriculture, a declaration that allowed international donors to help. This declaration was also a clear admittance that the development of agricultural entrepreneurs had failed.
According to Odendaal (2005), after independence, the Namibian government embarked on two land reform programmes, namely a Resettlement Programme and an Affirmative Action Loan Scheme (AALS).
The aim of the Resettlement Programme is to make farmers self-reliant in terms of food production, self-employment and income generated entrepreneurs. This is an opportunity to the poor and Landless Namibians to produce their own food with the view to attaining self-sufficiency; and to bring smallholder farmers into the mainstream economy by producing for the open market. Virtually all resettlement projects older than four years still depend heavily on government support for things like food, drought aid and technical assistance and, as a result, have not achieved self-sufficiency (Odendaal, 2005).
According to Odendaal (2005), a major shortcoming of these resettlement projects was a lack of management capacity. In addition, a lack of basic agricultural skills among beneficiaries results in low income and relies on government most of the time. Agricultural training and skills to these beneficiaries are important to make these projects self-sustainable.
The AALS was implemented by the Agricultural Bank of Namibia primarily to assist strong communal farmers to acquire commercial farms through subsidies, interest rates and loan guarantees by the state. Approximately 600 farms have been bought by emerging black farmers through AALS, nearly four times the number of farmers that the ministry has acquired for its Resettlement Programme. This was an impressive exchange in landownership from white to black. The AALS is not without any problems. In March 2004, it was reported that 37 percent of these farmers had defaulted on their payments. The result of this was that the government suspended its 35 percent guarantees on AALS loans and that farmers now have to pay 10 percent of the purchase price before they qualify for AALS.
Because these farmers (beneficiaries) defaulted on their payments, it was recommended for an extension of the repayment period to a minimum of 33 years and a maximum interest rate of two percent on the purchase of commercial farmland (Matundu-Tjiparuro, 2018).
Research approaches can broadly be classified into two categories, namely quantitative and qualitative methods. This study is based on a qualitative method. Qualitative research includes an “array of interpretive techniques which seek to describe, decode, translate, and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world” (Cooper & Schindler 2006:196).
The target population consists of selected individuals from the READ, agricultural corporations and black commercial farmers also mentioned in the table 1 below. This is based on qualitative research method. Information needed from this target group is to determine their feedback on the failure of emerging farmers and actions that should be taken to promote emerging farmers to successful entrepreneurs in agriculture.
The non-probability sampling method was employed to draw a sample from these institutions and the specific technique regarded as appropriate is purposive sampling. There are two types of purposive sampling, namely judgement sampling and quota sampling. According to Cooper and Schindler (2006:424), judgement sampling “occurs when a researcher selects sample members to conform to some criterion”. Judgement sampling was employed in this study as managers employed by these institutions dealing directly with agricultural development, who has all the information as from the supplier of funds point of view why most emerging farmers being unsuccessful entrepreneurs. Participants were chosen on an arbitrary basis because of their unique knowledge. Watkins (2010) contends that purposive sampling is used for a particular purpose, for example, participants are chosen from different groups representing diverse perspectives on an issue. Table 1 indicates the composition of the individuals within various institutions.
Table 1: Composition of the individuals within various institutions
|Institution||No of individuals|
|Department of Agriculture in the North West province||1|
|Black commercial farmers||2|
|Agricultural cooperatives in the North West province||1|
The target population consists of selected individuals from the READ, agricultural cooperatives and black commercial farmers. Table 1 shows that two black commercial farmers were interviewed as well as the Member of the Executive Council (MEC) responsible for agriculture in the North West province and a senior manager from an agricultural cooperatives responsible for rural development. Information needed from this target group is to determine their feedback on the failure of emerging farmers and actions that should be taken to promote emerging farmers to successful entrepreneurs in agriculture. There was no need for more data in this respect because the data retrieved from the four participants were saturated.
Each interview was recorded and transcribed. The written submissions of the four transcripts were emailed to an independent analyst for the analysis. The analysis was done in NVivo 12 Pro.
NVivo 12 Pro for Windows is an instrument to collect all the data needed. It contains the import, manage and analyse text functions, as well as audio, video, emails, images, spreadsheets, online surveys, web content and social media. With NVivo advanced data management, query and visualisation tools can be explored. NVivo is a Qualitative Data Analysis (QDA) computer software package produced by QSR International. It has been designed for qualitative researchers working with very rich text-based and/or multimedia information, where deep levels of analysis on small or large volumes of data are required (Zamawe, 2015:13).
The inductive thematic analysis approach was followed whereby codes, or as NVivo calls it nodes, emerged from the data itself. Two nodes were identified, namely project failures and lack of continuity. These nodes were further developed through exploratory tools such as Word Map, Frequency, Tree Map, Tag Cloud and Explore Diagram.
Referrals to some sub-nodes mentioned in the interviews
Table 2 (codebook) highlights the referrals to some sub-nodes mentioned in the interviews
Table 2: Nodes
|Project failure and lack of continuity||CASP ineffective||4||10|
|Poor selection of recipients||4||20|
|Inadequate government and department knowledge and assistance||4||12|
|Misappropriation of funds and wasteful expenditure||3||8|
|Communal and economical division of land||4||7|
|Recommendations||Communicate with, report on and engage all stakeholders||3||29|
|Selection is key||4||29|
|Process knowledge and skills and be personally informed and empowered||3||12|
|Proper financial and farm management||2||11|
|Training and empowerment||3||13|
Project failure and lack of continuity
- From the information above, it has been referred that with the description “CASP ineffective” appeared 10 times with all four interviews held.
- From the information above, it has been referred that with the description “poor selection of recipients” appeared 20 times with all the four interviews held.
- From the information above, it has been referred that with the description “communicate with, report on and engage all stakeholders” appeared 29 times with three interviews held.
- From the information above, it has been referred that with the description “selection is key” appeared 29 times with all four interviews held.
Word cloud or tag cloud
Tag clouds are a graphical representation that display up to 1000 words alphabetically in varying font sizes where frequently occurring words from the interviews are in larger fonts, which assists researchers with technical analysis. It must, however, be noted that tag clouds only display frequently occurring words and not necessarily according to importance (Patton, 2015: 183).
Figure 2: Word tree
The font size of the word that is used more frequently is displayed in a larger font size (Patton, 2015:183). The words that were most frequently used were, emerging farmers, commercial farmers, government department, CASP, training assist, cooperatives, support and successful. These findings are not surprising given the topic under study.
From the interviews conducted, certain key words were identified, namely management, selection, passion, support, training, cooperation, CASP, jockey, heart, government and emerging.
Management word map
Looking at the management word map, certain words were noteworthy:
- Financial management – all financial matters within the agricultural business
- Operational management – management within the agricultural activities
- Marketing management – marketing possibilities of the agricultural product
The management word map contributes in answering the research question on educational shortages.
- Emerging farmers must have the necessary skills within the field of financial management, operations management and marketing management to become successful commercial farmers.
Selection word map
Looking at the selection word map certain words were noteworthy: “select”, “emerging farmers “and “process”
Table 3: Selection of emerging farmers
From the Table 3, as mentioned in the nodes, is it very important that the selection of the emerging farmers is key. This table also certifies that the person selected to be a successful farmer should have knowledge and skills, passion and commitment and should have proper financial and farm management knowledge. Below are some comments from the interviewees.
“You must select the correct person that can steer the job”
“If you don’t select the correct jockey for this job you are not going to succeed, meaning the correct person that can do farming that know what it is all about”
“He or she must have a passion for the job”
- Resulting from the interviews the selection process, to choose the correct emerging farmer is very important and the candidate must have a passion for the job.
Passion word map
Looking at the passion word map, certain sentences were noteworthy:
“Correct jockey for the job”
“Need to have a proper selection process to identify a person that will have a passion for farming”
“You must know the farming business”
“The level of knowledge you need to have to be selected as an emerging farmer to benefit from the government programme”
- Resulting from the interviews, an emerging farmer that benefits from this CASP programme, offered by government must have the passion and a level of knowledge in agriculture to become a successful commercial farmer.
Support word map
Looking at the support word map, certain words were noteworthy:
“financial support”, “technical support”, “support towards agriculture” and “training support”
As mentioned in the nodes, is it very important to support and empower the commercialisation of black farmers for food security in South Africa. In the nodes mentioned above, training and empowerment were referred to 13 times in the interviews.
“The main aim is to commercialise the black farmers”
“Empowering the farmers”
“This service … that you are rendering to the farmer I am talking about, concerning to the plants the tractors and those type of things, technical services and those type of stuff”
- It resulted from the interviews that the main aim is to commercialise black farmers and that can only be done with support, for example, financial, marketing and technical support.
Training word map
The training word map, certain sentences were noteworthy:
“Government and the private institutions should get involved with a training programme during the three years within the cooperative”
“The secondary cooperatives should be South African Qualification Authority (SAQA) accredited”
“The chosen emerging farmer will join the specific secondary cooperative for a period of three years”
“To enter into a secondary cooperative as an emerging farmer member, in the beginning of the first year for the three-year training programme, it would be necessary for the emerging farmer to do an entry exam as part of the selection process”
“It will be part of the development programme that an emerging farmer will register with a specific secondary cooperative for a period of three years”
“After the three-year period the successful farmer will be graduated with certificate/diploma”
- It emerged from the interviews that the main aim is to commercialise black farmers and that can only be done with support and training, for example, financial, marketing and technical support.
Cooperation word map
Looking at the cooperation word map, certain sentences were noteworthy:
“To establish a cooperative for every five or ten farmers is not going to work. It needs to be a formal cooperative with proper management. It must a clear direction”
“The government should finance the operational duties within a cooperation”
“The cooperatives are only a body assisting the emerging farmer with technical support and financial support and to monitor the emerging farmer during this three-year period. The emerging farmer should not be a member of the cooperative. The cooperative is a serviced delivery body with proper management appointed and subsidised by government”
“The management of this cooperatives are the key thing. This cooperative is the vehicle that government can use to promote emerging farmers”
“You can have a cooperative specialises in crop production and also a cooperative specialises in livestock. You might get an emerging farmer that belongs to two cooperatives because of mixed farming meaning crop and livestock. The key is the management of the cooperation”
“It also be that such cooperative been accredited with SAQA or ICAS to be issued a certificate after three years with accreditation on successful practical education within a special field of farming”.
- It emerged from the interviews that during these three years, joining a secondary cooperative, an emerging farmer will be educated and trained on specific farming activities in the agricultural activity the farmer wants to specialises in, as well as in other theoretical fields, for example financial and marketing management. A mentorship programme needs to be put in place and the partnership with commercial farmers, in a well-structured way should be established. These emerging farmers will be monitored by the extension officers and other external officials who will report on a quarterly basis on their performance to the advisory council, according to SAQA specifications. If an emerging farmer does not perform, such a person will be expelled from the three-year training programme.
After the end of every year the council will (according to the performance of the emerging farmer – SAQA specifications) decide to promote the emerging farmer to the next level or to fail the emerging farmer and then to expel the person from the programme. After the successfully completion of the three-year period, the emerging farmer will graduate. During this period, the emerging farmer would have accumulated equity and can be introduced to the land redistributing programme.
CASP word map
Looking at the CASP word map, certain sentences were noteworthy:
“CASP funds spent was ineffective”
“The Auditor General mentioned to me that the CASP fund is not effectively used at all”
“Then what is happening to these farmers the government will give them grants one season then after that season you see some of the lands are planted this year next year they are not planted”
“CASP is still a failure if you going to look at the fruitless and wasteful expenditure in the books of the department”
“What we actually say to each other is that CASP is not going to work in its current form”
“They mentioned to me according to the CASP is not working. You must select the correct person that can steer the job. And one of the black commercial farmers, mentioned to me and he said Faan there is no way, that if I am going to have a farm of 1 000 hectares, that you can give me10 beneficiaries for that farm, it is not going to work”
- It emerged from the interviews that CASP is not going to work in its current form. You must select the correct person that can steer the job with proper training and monitoring. Forensic audits have been done to investigate the fruitless and wasteful expenditure and the result of this was that some of the employees directly involved with the CASP programme services to READ have been suspended.
Jockey word map
Looking at jockey word map certain sentences were noteworthy:
“If you are not going to select the correct jockey for the job, you are not going to succeed”
“You need to do a proper selection of which emerging farmer you are going to select for assistance by government. You need to have a proper selection programme. Not everybody is a farmer. Even if he or she has grown up in the farming industry, it not hundred percent that the person will be a successful farmer”
“Black people are not looking for land they are looking for a home. They agree that farming is a very difficult profession”
“You give him money or cheap money for free, also give a piece of land and say there is. Go ahead and make it a success. No, it doesn’t work that way”
- It emerged from the interviews that the selection process of an emerging farmer is key. You must select the correct person that can steer the job with proper training and monitoring.
Government word map
Some certain sentences were noteworthy:
“Government need to be consistent. Government must have a programme on how to assist farmers. Maybe a three year programme. And government must follow this programme to the letter, may be government will achieve something”
“Because I am saying to government grants are not sustainable but we can use grants in a constructive way. A constructive way is yes, ok”
“After the three-year period you still continue to assist them by government but also to assist them to get an agricultural loan to extend their farming operations”
“After the three year process the emerging farmer is somewhere between an emerging farmer and a commercial farmer but got confidence. This is my way of thinking in promoting emerging farmers but the government on its own will never succeed”
“We have formal and informal training. We work hand in hand with your Agri-seta, or work hand in hand with training companies like those that are Agri-seta accredited. We do have the informal training session we are in partnership we work hand in hand with seed companies, Agricol, Pioneer, Monsanto, Panar, seed companies, we work with fertilizer companies, Omnia, because the deal is that you cannot sell to the farmers and then go. Meaning this companies must train farmers in terms of cultivar selection, plant population, planting depth, planting time etc. They must assist us to an extend to even go as far as planta calibration that is what they are doing”
“Government will be the biggest donator of monies and training but cannot do it without the input of the private organisation in whatever input agreed upon”
- It emerged from the interviews that the government has a very important role to play in the development of emerging farmers but cannot do this function on its own. Government needs the support of the private sector and the private sector is willing to assist.
Emerging farmers map
Looking at the emerging farmers map, certain sentences were noteworthy:
“Government and private organisations must work closely together to get emerging farmers more sustainable. Like the North West Cooperative and other private institutions”
“In this system of the cooperatives, the private sector can be included. North West Cooperative can also assist emerging farmers with technical support and in the monitoring of the emerging farmer”
“This is my way of thinking in promoting emerging farmers but the government on its own will never succeed. The private partnership into the whole mix will succeed to the promoting of an emerging farmer”
“After the emerging farmer has graduated then the emerging farmer will not be continued to be assisted by the corporation financially but the corporation can bring in the ABSA’s and other financial institutions to assist the farmer in future with financial loans ext.”
“It is also necessary that the private sector and the state come together and work together and bring successful emerging farmers there. The private sector wants to help”
“If the emerging farmer is not going to get the financial and technical support from Government that it will become a problem”
“The government will not succeed on its own. Will need the input of the private institution like the North West Cooperation”
“This is my way of thinking in promoting emerging farmers but the government on its own will never succeed”
“This is also a very much big emphases area of the new president in the development of black commercial farmers. There will be more support towards to agriculture. There was always support but is was not always well directed”
“Of the questionnaires completed by emerging farmers on their feedback in the study, they specifically emphasise that the support they receive from the department is guided by, etc. Do not exist at all. There is no government support. The extension officers who have to help them are not available at all and if they get help, they will be compensated for that extra. Some of the extension officers are also not capable of working”
“Politicians are working on numbers and do not want to create commercial farmers”
Comparisons between the outcomes of the interviewees.
Various comparison arguments followed between all the interviewees for example:
- Misappropriation of CASP funds
- CASP programme in its existing form is ineffective
- Selection is key
- Poor selection of recipients
- Inadequate government or department knowledge
Emerging farmers must achieve independence and become commercial farmers
- Emerging farmers need technical support
- It is important to equip emerging farmers with what is needed for farming
- Training and empowerment is important
- Communicate, report and engage with all stakeholders in agriculture
These comparisons between the interviewees contribute to all the research questions.
The key finding and the core of the result to this study is to empower and giving skill to those emerging farmers who must become self-sustainable and independent commercial farmers. From the above comparisons, is it clear that all the interviewees agreed. This emphasises the contribution made to answer all the research questions and to get solutions.
A large part of the reason why things are failing now is that farms are being awarded to people with no passion to up skill and learn to become commercial farmers. Emerging farmers assume that farming is a lucrative business and want to play the part, but without the passion – this fails when things go wrong. Emerging farmers do not possess the skill nor the knowledge to handle things when they go wrong – so they end up selling off all that, which was simply given to them. For example, selling cattle when they had calves, selling off the tractors intended for farming and selling the seeds to white farmers that should have been planted.
In addition, a major part of this is the failure on the part of government who also lack the knowledge and the skills to adequately identify and advise, therefore, they end up poorly selecting people and thereafter failing to provide the necessary training, support or any other appropriate intervention to see the project to success.
Overall, selection is very poor and this all culminates in the failure of CASP. Therefore, even though opportunity has been given, it has been given to the wrong people, in the wrong way.
Through the interviews, a new framework seems to have developed and emerged and contains particular cornerstones:
At the modus, there is comparison, where the private sector and government have a combined role to play that deals with all the various nuclei involved in managing farms and the various emerging farmers. There needs to be a more careful selection of candidate or emerging farmers and this selection process needs to include a programme that extends over a long period of time (three years).
The extended temporality of this programme will further help to identify those farmers who possess the passion and grit to succeed, are worth the investment and will see to it that there will be a return on investment. During this programme, emerging farmers need to be given financial assistance as a start-up and this requires that, there is communication between government and other private organisations involved in developing these farmers.
Part of this programme needs to instil in emergent farmers the skills and knowledge required for success, which includes management tools such as financial management, as well as more pragmatic and practical exposure to running a farm as a business
A ratio of land to farmers needs to be devised such that the land is an economical unit. These farmers need to be equipped with the required equipment to be able to complete their tasks. However, most importantly it involves instilling within them the marketing, managerial, financial control, farming knowledge and skills required to empower them and equip them for a gradual move away from dependency, to that of independence.
Conclusions, contributions and recommendations
The study provided extensive reviews regarding the emerging farming SMMEs throughout the world. Particular attention was also given to the factors that determine the success and failure of farming SMMEs. Based on this, a list of the key success factors was identified in the research. As mentioned above, as part of the objectives of this study, the results of this study indicated that emerging farmer SMMEs need farming skills, financial, extension services and infrastructure to ensure the success of their farming enterprises. Besides the abovementioned factors, training and extension support were reiterated as the main determinants of success and failure for emerging farmer SMMEs. In addition, it reemphasised the importance of business planning, access to formal markets and training for emerging farmer SMMEs. Based on these results, it can be concluded that emerging farmer SMMEs lack capacity such as human capital, market, infrastructure, farming skills and finance to run their businesses.
With the information gathered from the qualitative research done, is it clear that the private organisations should and want to join hands with government in the development of emerging farmers. With this in mind, the external role players in agriculture, together with government should follow the aspects that should be highlighted towards the implementation of a framework in the development of emerging farmers.
Figure 3: A success factor framework to develop successful entrepreneurs in agriculture.
The aim of the study is to develop successful entrepreneurs in agriculture. Within the government sector, cooperatives can be established as a vehicle where the private institutions and commercial farmers (who will be part of the board of such cooperatives) are involved in the training and selection process of emerging farmers to become successful entrepreneurs in agriculture.
Figure 4 is a structure on how the public entity will appear and who will be responsible for the development of emerging farmers to become fully-fledged commercial farmers. The recommended name of the entity could be the “North West Agricultural Cooperative of Development in Entrepreneurship”
Figure 4: A structure on how the public entity can appear and who will be responsible for the development of emerging farmers to become fully-fledged commercial farmers.
To perform agricultural development, it might be necessary to separate the development functions into the main functions of agriculture namely crop production, livestock, agricultural business and dairy products.
Figure 5: A proposal on how the primary cooperative should operate
The board will be in charge of the primary cooperative and according to the Public Financial Management Act (PFMA), will be appointed by the Member of the Executive Council to the Department of Agriculture in the North West province (MEC). The board of the primary cooperative will also report to the MEC concerning the performances and finance of the entity in total. According to the researcher, the board should be members that will consist of the external role players in agriculture as mentioned above (a representative, to be the chairperson of the advisory council at all the secondary cooperatives) together with the managing director of the entity. The board will have a coordination function over all four secondary cooperatives. The primary cooperative (head office) should only have an administration function that will consolidate the monthly financial reports and quarterly performance reports to the board, MEC of the department and provincial treasury. All the development funds in agriculture, for example CASP funds, should be channelled through this provincial public entity (primary cooperative).
Figure 6: A proposal on how the secondary cooperative should operate
If this first phase of the selection process was a success, the emerging farmer should develop a business plan on the specific farming activity the emerging farmer wants to get involved in. A panel of agricultural economists from the external private institutions (officials) should evaluate the business plan and should have an interview with the emerging farmer to determine the background concerning this farming activity. If the emerging farmer has been successful with the second hurdle in the selection process, the person will become a member of the specific secondary cooperative. Part of the development programme is that an emerging farmer will register with a specific secondary cooperative for a period of three years. There should be a possibility that such a secondary cooperative should be South African Qualification Authority (SAQA) accredited. This is not to replace an agricultural college, but on the job training is very important. This means that an emerging farmer will graduate after a period of three years. During these three years, an emerging farmer will be educated and trained on specific farming activities in the agricultural activity the farmer wants to specialise in, as well as in other theoretical fields, for example, financial and marketing management. A mentorship programme needs to be put in place and the partnership with commercial farmers in a well-structured way should be established. These emerging farmers will be monitored by the extension officers and other external officials; they will report on a quarterly basis on their performance to the advisory council, according to SAQA specifications. If an emerging farmer does not perform, the person will be expelled from the three-year training programme.
After the end of every year, the council will (according to the performance of the emerging farmer – SAQA specifications) decide to promote the emerging farmer to the next level or to fail and then expel the person from the programme. After the successful completion of the three-year period, the emerging farmer will graduate. During this period, the emerging farmer would have accumulated equity and introduced to the land redistributing programme. After the three-year programme, the external role players in agriculture and private organisations (who are members of the advisory council at secondary cooperation level) will be acquainted with these graduated, emerging farmers and will not hesitate to assist them with a production loan and whatever is necessary to become an achiever. Therefore, the secondary cooperatives will annually have new intakes of emerging farmers who successfully passed the selection process.
The funding arrangement for implementation should be as follows:
- First year: 100% CASP grant on the approval of business plan
- Second year: 80% CASP grant on the approval of business plan and 20% agriculture loan
- Third year: 60% CASP grant on the approval of business plan and 40% agricultural loan
- Fourth year: These emerging farmers who have successfully graduated in the fourth year have built up enough equity to apply for a 100% production loan from agricultural cooperatives and other financial institutions, as well as be added to the land distribution program.
In conclusion, for the government to achieve successful growth in successful agricultural entrepreneur’s development, the aim should be to build alliances with private entities and form public/private partnerships.
The roles and responsibilities of other private agribusinesses/institutions should be:
- The provision of mentorship
- Assistants with training initiatives such as learning by doing concepts
- Assistance with direct and indirect marketing
- Assistance with operational functions.
Other support services that private agribusinesses/institutions may provide to support rural agricultural development are undoubtedly numerous.
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