Matthew Lester: Agric land switched to game farming coming back to bite SADate Released: Tue, 29 July 2014 08:00 +0200
There is not much fun to be had when attending farmers’ days anymore. For years these functions used to be all about the droughts, floods or pests, lousy market prices and increasing fuel prices. We could generally drink out a solution.
But now the land claims have opened up again and there are proposals to force farmers having to give 50% away to BEE. Very soon farmers may not be able to offload their farms on foreigners either.
South Africans should doff their hats to any farmer who continues to toil in the soil. The farming yield is not only about buying new 4X4’s and paying private school fees. South Africa’s farms directly support a significant portion of the population thus reducing the dependency on all spheres of government and the taxpayer.
Driving from Kenton-on-sea to the Rhodes Business School in Grahamstown there is not much sign of farming. Many farmers have given up, sold out to game farmers and become professional hunters or game guides. Instead of livestock on pastures the veld has grown back and the drive is now down a corridor between miles of game fences. It’s pretty bearable if you like waving to the giraffe.
Game farming used to be largely confined to the Lowveld and northern parts of RSA. Then we got to the new South Africa and we came up with the wonderful idea that game farms bring tourists, foreign currency, jobs and a whole lot more to the new RSA. And, yes, some operators have made a huge contribution.
But let’s be honest, many game farms are paying lip service to the true meaning of sustainable development. Any old dunny with foreign currency can swan into RSA and buy up what was a farming concern, sell off the livestock, pay off the workers and turn the land into a personal private zoo. Then find a nice African name and call it a ‘conservatory.’
‘Cheque book farming’ used to be about wealthy executives shielding taxable income from bonuses and share options by investing in farms. But, importantly, the farming continued and improved. Today, cheque book farming seems to be more about who can pay the record price for a buffalo bull. It has little to do with the value of the produce and has chased land prices to a level where farming has become unsustainable.
Tourism income generated by some game farms is not much more than airport departure tax paid when their mates visit from overseas. The farms are stocked with what ever takes the owners fancy regardless of the effect on the environment.
The effect in areas of RSA is dramatic. For example, the annual mohair clip of the Eastern Cape has declined to below 2 million kilograms per annum, down from 12 million kilograms 20 years ago. And many of those employed in the industry and living in rural areas are now unemployed in the townships waiting for a state provided home. The increase in poverty in rural towns is tangible.
Those over 18 years old displaced by game farming have to wait for an old age grant. No wonder there is pressure on government to implement a basic income grant, at the expense of the taxpayer.
The municipal property rates act, 2004, was supposed to distinguish between farming and game farming\tourism. Property rates are not collected by SARS but rather by the local authorities so the distinction between the two seems has been largely missed. Many game farms still slip through under the rating concessions granted to farming.
There can be little doubt that within RSA farming we still live up to the words of Richard Bird, where the distribution of wealth in a country is “largely the result of historical accident, as condoned by the state and frozen in law. …Many of those successful in life stand on not on their own feet but on the shoulders of their fathers.”
On the other hand Government’s attempts at agricultural reform over the last 20 years have generally yielded disappointing outcomes. The press is littered with reports of failure. The Thandi Modise farm neglect is a national embarrassment that has now escalated to the NSPCA pressing charges.
On the Davis Tax Committee we are currently examining the mining tax package. The mines used to be the big tax contributors in RSA. The minister of finance only had to look at the outlook on the gold price in formulating the annual national budget. But today mines only account for about 10% of total tax collections. Following the long-term strike actions tax collections will come under further pressure.
Thank goodness the financial sector has taken over as the major tax generator of RSA, accounting for about 35% of total tax collections. But that does not mean we can just walk away from the mining sector.
Mining still accounts for 50% of RSA exports. So what will happen to RSA’s balance of payments current account when the mines are all worked out and RSA has 53 million people to feed on imported food?
If a penny saved is a penny earned then logically every Rand in food produced locally is just as valuable as a Rand of any other export.
So when the government puts the brakes on foreign ownership of land in RSA I say ‘ hear hear! It’s high time to confront this issue. The people of South Africa cannot eat scenery.’
Part of the problem is that the various government initiatives are disjointed and simply create an overall impression that farmers are being targeted for extinction. Perhaps the solution could be an agricultural CODESSA where all stakeholders in agriculture could thrash out a sustainable overall settlement.