position of smallholder farmers in the local fresh produce supply chain by creating a guaranteed demand; therefore Agri-SCIP deploys local co- operatives to guarantee the demand for fresh produce. The cooperatives guarantee that they will buy fresh produce from their local member
farmers. The operations of Agri-SCIP are regu- lated via a PGS, which serves as an overall qual- ity assurance system via which membership of smallholder farmers is arranged.
A number of misconceptions exist about smallholder farmers in SA, mainly in relation to farm size and production efficiency. A small farm size does not necessarily equate to low farm via- bility, as a 2 ha intensive horticulture farm on prime agricultural land can be more viable than a 500 ha monoculture farm in the dry Karoo. The size of the farm is thus relative in respect to the particular ecological region and soil quality, and to the farming industry involved. Small- holder farms are also not simple scaled-down versions of large commercial farms as they differ significantly, in terms of both input and output intensity. There is often a mistaken perception that smallholder farms are less efficient, because of the absence of assets and industrial equipment. Large, capital-intensive farms are not always more economically efficient than their smallholder counterparts (Kirsten and van Zyl, 1998).
A smallholder farmer is usually one whose scale of operation is too small to attract the pro- vision of the services that he or she needs to be able to increase his or her productivity and mar- ket participation (Kirsten and van Zyl, 1996). In comparing the Alliance for a Green Revolu- tion in Africa with the Export Promotion for Organic Products from Africa (EPOPA), Auerbach (2013) comments that while the former used high levels of bought inputs, the latter showed smallholder farmers how to use local natural resources, connected them with markets and strengthened local institutions at a fraction of the cost per farm per year compared with the for- mer ( Auerbach, 2013; Chapter 1, this volume). Classifying any farming operation, from a tiny backyard food garden up to a 20 ha farm, as a subsistence farm is therefore a generalization, suggesting that all smallholders form a relatively homogeneous group. On the contrary, there are significant distinguishing features, which allow for a more comprehensive typology to emerge. However, Bernstein (2009) argues that many analysts stress the variability of class identifica- tion in concrete social formations, which means that while they may be useful for discerning and analysing broad trajectories of change, they are often difficult to operationalize in the analysis of specific empirical data sets.
Ben Cousins (2010) proposes to distinguish smallholder farmers from subsistence farmers based on the levels of own consumption and marketable surplus. A subsistence farmer pro- duces primarily for their own consumption and has very little market participation beyond some occasional neighbourhood trade. Surplus pro- duction is therefore almost non-existent. Distin- guishing smallholder farmers from commercial farmers often relies on the size of the farm and the degree of labour intensity, in addition to the level of marketable surplus. In this case, small- holder farming seems to rely mainly on house- hold labour. Based on key differences in the combination of land, labour and capital, small- holder farmers can be classified as semi- commercial or commercially orientated (see Table 9.1 and Chapter 1, Fig. 1.1, this volume). When a surplus is produced in order to enable
economic growth, the agricultural activities assume the character of a capital enterprise. A proportion of the surplus value produced by own and/or hired wage labour is reinvested in the production assets in order to expand pro- ductive capacity (Cousins, 2010).
In light of the above, and of the progression presented in Chapter 1 of this volume, the classi- fication of subsistence and smallholder farmers in SA shown in Table 9.1 has been adopted, modified from Cousins (2010), and further developed to show the actual development progression among smallholder farmers on the south coast of KZN.
The progression from subsistence to semi- commercial smallholder farmers has taken about 6 years, and there may soon be one or two com- mercial smallholder farmers. The Siyavuna Abali- mi Development Centre (SDC) was established in Table 9.1. Proposed typology of subsistence and smallholder farmers in South Africa. (From Troosters, 2014.)
Typology Social production Expanded production Criteria
Subsistence farmer
Small contribution from agricultural activity; Heavily reliant on petty
enterprise, social grants and/or other wage labour
None via agricultural activity
Mainly own consumption; No significant surplus production; No market participation; Occasional, ad hoc neighbourhood trade or welfare handout Smallholder farmer
Significant contribution from agricultural activity; Combination with additional
forms of income, mainly wage labour
None, to very little, via agricultural activity
Farms on substantial scale; Significant, but rather
uncoordinated surplus production;
Simple market participation, mainly local;
Regular, but mostly unpredictable trade Semi-commercial
smallholder farmer
Fully sustainable from agricultural activity; Only minor combination with
additional forms of income; No to very little hired labour
Basic level Farms on substantial scale;
Planned surplus production; Basic market participation,
local, regional and/or national;
Regular, predictable trade Commercial
smallholder farmer
Fully sustainable from agricultural activity; Only minor combination with
additional forms of income; Rely on hired labour
Fully engaged, with capital accumulation
Commercially orientated farm; Highly organized, intensive
production;
Good market participation; Regular, predictable trade; Potential of vertical integration
in the supply chain via value adding
2010 as a not-for-profit organization with the aim of helping subsistence farmers to become small- holder farmers, deriving increasing financial and other benefits from their agricultural activities. By 2013 there were two active agri- marketing cooperatives under SDC. Both are situated on the lower south coast of the KZN, and are part of the Ugu District Municipality (SDC, 2013). The first agri-marketing cooperative, Hibiscus Coast Co- operative (HCC), was set up in 2008 (HCC, 2009, unpublished constitution) and this cooperative operates in the Hibiscus Coast Municipality (Fig. 9.1). In 2011, the second agri-marketing cooperative started operating in the Umdoni
Municipality (Fig. 9.2). These two municipalities fall under the Ugu District Municipality.
In the financial year 2013, the Hibiscus Coast agri-marketing cooperative operated in three local communities, namely Nositha, KwaNzimakwe and Gcilima. In 2013 the cooperative started working in Mvutshini. Smallholder farmers form a local Farmers’ Association at community level of which every smallholder farmer is a member.
The Umdoni Agri-marketing Co-operative currently operates in three local communities, namely Amahlongwa, Malangeni and Danganya. A registered PGS represents each individual local smallholder farmer.
Amahlongwa Farmers’
Association
Three collection points
56 PGS registered growers Sales to cooperative R2,177 Malangeni Farmers’ Association
Three collection points
51 PGS registered growers Sales to cooperative R8,087 Danganya Farmers’ Association New area – established 2013
Three collection points will be established in 2013
Fig. 9.2. Overview of geographical areas of the Umdoni Co-operative. (From SDC, 2013.)
Gcilima Farmers’ Association
Four collection points
131 PGS registered growers Sales to cooperative R37,939 KwaNzimakwe Farmers’ Association
Four collection points
118 PGS registered growers Sales to cooperative R23,440 Nositha Farmers’ Association
One collection point
25 PGS registered growers Sales to cooperative R2,707 Mvutshini Farmers’ Association Established 2013
Three collection points will be set up in 2013
47 PGS registered growers
Fig. 9.1. Overview of geographical areas of the Hibiscus Coast Co-operative. PGS, Participatory Guarantee System. (From SDC, 2013.)