Comments on Zulumathabo on the Internet: The Miracle Betrayed

Even if the skills can be bought, you have to know...

2008-06-11T04:48:00.000-07:00

Even if the skills can be bought, you have to know that the skills are needed, and a lot of people in Canadian society don't know. In that we're not vastly different than our African counterparts.

I was speaking to a prosperous beef farmer near Ottawa who manages to sustain his family of 10 people on his family farm. I asked him what he did differently from the majority of farmers that are usually struggling to stay afloat. His secret is two things. He does not farm commodity products, but products in a very special niche (organic grass-fed beef). The other thing he does is his own marketing and distribution, which he said that a lot of farmers don't enjoy because it means dealing with customers. Because he does that he keeps all of the mark-up from when the meat leaves the butcher until it gets into the hands of his customers. In addition, he spends less time "ploughing" and more time avoiding middle-men, and is not at their mercy or the mercy of the commodity markets. Again, it is education and a broader skills base that make the difference here.

I don't understand how SA is descending into the economic pit that is Zimbabwe. Zimbabwe has not had to run an open and transparent government ever since Mugabe (Shona) co-opted and subsumed the political forces of Nkomo (Matabele). I don't get the same sense of monopoly from any of the post-apartheid governments in South Africa in spite of the fact that the ANC is probably more popular than the ZANU-PF ever was in Zimbabwe. Zimbabwe's problem is that it is an unmanged kleptocracy, and the only way to advance is to acquire from the government the right to rob fellow citizens. That is not to say that such thievery does not exist in South Africa, but it is at least more managed and predictable.

Zimbabwe is a classic case of transferring land from prosperous and efficient white farmers to black African farmers who were not able to continue the same level of productivity or prosperity. (It could be plausibly argued that the white prosperity was predicated on black poverty, but productivity should not have changed if those were the only factors). Uganda, Kenya and Tanzania went through the same problems in the 1970s and 1980s when they transferred Indian-owned businesses to black Africans. They didn't also give the new owners the skills to run those businesses, and the businesses very often went down. In fact, in the 1990s and early 2000s, I heard that the Ugandan government was trying to make good with some of the Indian families that they kicked out to attract them back to Uganda so that they could run the businesses profitably.

In South Africa, if you want the black African farmers to succeed, they have to out-market and out-distribute the white farmers.

I'm also going to guess that another problem in South Africa is that the comparative lack of access to credit stymies a lot of black African farmers and holds them back. The Grameen bank proved that you can overcome that obstacle as well in a way that benefits poorer business owners. I wouldn't be surprised if racism motivates lenders to deny credit to black African farmers.

The long & the short? It's not just about land transfer. African farmers also need skills in marketing, management, distribution, and access to credit.

Great feedback Jay and that is highly appreciated....

2008-06-10T22:35:00.000-07:00

Great feedback Jay and that is highly appreciated. Definitely the skills are needed but as you know in the Canadian society the entrepreneur does not have to have the skills that create the product or deliver services. These can be bought. He only brings the strategic leadership and managerial skills. Even if he had the technical skills they will fall into disuse because of strategic management that is more important than the nuances of ploughing so to speak.

In the case of South Africa the challenge is the legacy of apartheid hate that still persists to this day particularly the white farmers towards the African society. This racial divide stymies the business that you are referring to in your post. It's regrettable that we continue to read about the racial violence and the murders that take place with the result that the business agenda is now lost or forgotten. Just last week or so African men were thrown into the den of lions. In one case only the fingers and intenstines of the person survived.

These things have nothing to do with business but the tyranny of racial hate stymies progress and unless there is a fundamental shift in direction we are headed in the same direction as Zimbabwe in that the problem will explode and it will be too late reconcile the interests of the White farmers and the Black farmers.

Zulumathabo! It is good to see your blog. I must c...

2008-06-10T20:25:00.000-07:00

Zulumathabo! It is good to see your blog. I must comment on this post.

Land transfer alone does not work to improve food production or prosperity. Mere land ownership does not bestow skills in agriculture, cash flow management, people management, customer and supplier management, animal husbandry, marketing, and distribution. Those skills are all needed to farm profitably. Like it or not, the white South African farmers have those skills, and the black African farmers who wish to receive those lands do not.

Black South African farmers are in a good position because the government is run by black South Africans. If the land transfer is to succeed, the recipients of the land transfers should also receive (from the government) training in those skills to ensure that they run profitable farms.

There have been many cases in the past in Africa where the black Africans received lands, properties, or other business rights and failed to run profitable businesses because they didn't have the other skills. South Africa need not repeat this.