2. The Rural Context

2.1 Introduction

The available data confirm that the rural people of South Africa am at great risk of being poor. This risk is not only higher in rural areas than elsewhere, but almost three quarters of the poor in South Africa live in rural areas. The distribution of poverty goes beyond a rural urban divide, and has a sub-regional context. The incidence of poverty is also unevenly distributed across the different population groups. Africans are disproportionately represented among the poor.

Rural African children younger than five years, youths and the elderly are particularly vulnerable to poverty. The risk of being poor in rural areas is also larger among women than it is among men.

Headcount measures of poverty risks, however, add little to questions such as the extent or depth o poverty and the distribution of poverty among the poor. In South Africa, the poorest ten per cent of the people, of whom 77 per cent are Africans living in rural areas, control just 1 per cent of consumer spending in the country. There are also marked differences between urban and rural areas in the level of infrastructural development. The provision of, and access to, services in rural areas is far worse than elsewhere in the country.

TABLE A

Source for Table A and Figure 1: RDP: Key Indicators of Poverty in South Africa, 1995

FIGURE 1

Poverty rates in former Homelands (% of population of former homelands who are poor)
KwaZulu	Kangwane	Qwa-Qwa	Gazankulu	Lebowa	KwaNdebele	Transkei	Bop	Venda	Ciskei
61	58	88	69	83	48	92	67	64	73

2.2 The Constraints on Rural Development - and the Opportunities

Restrictions on entrepreneurial activity in rural areas

Challenges arise from the inconsistencies between traditional law and formal economic systems, for example the difficulties raised by conventional kinds of collateral for borrowers who hold land in a communal tenure system. This is compounded by the past failure to encourage the development of financial services in the rural areas, and the particularly conservative nature of South Africa's banking system. In addition, those who might have offered financial services in the former homelands are discouraged by the subsidies offered by the Agricultural Credit Board and the Agricultural Development Corporations to limited numbers of more viable clients, against which no ocher service provider can compete. Other restrictions emanate from the limited opportunities for education and training, the limited agricultural base, monopolistic ownership of marketing chains, and the leakage of incomes out of rural areas.

These restrictions are more severe for women, and they face additional constraints, such as the legal constraints of customary marriage and inheritance laws, both of which reduce their ability to take up economic opportunities They have restricted access to land, finance, information, training, and markets. They face most of the drudgery from the collection of water and fuel wood, from child care and care of the old and infirm, and from the difficult access to services like clinics. They are less literate, yet they run the great bulk of small scale enterprises. The greatest challenge and opportunity in rural development comes from the empowerment of women.

Past attempts through the Regional Industrial Development Programme to encourage decentralisation of industry to the former homelands have failed, as have most of these programmes internationally. In the white farm areas, past government policy has led to an over-capitalised, overmechanised and financially vulnerable farm system that is ill equipped to withstand drought without government assistance. Many towns and villages have withered as production side-steps them directly to national and international markets.

Population growth rates - less a constraint, more an outcome indicator

The high rural population growth rate in South Africa is a constraint on the development of services and reduces access to natural resources. The extent to which cross-border migration from the southern African region contributes to this rate of growth is unknown, but must be substantial in some areas.

Population growth rates should however be seen less as a constraint and more as an outcome of policies of disempowerment and poverty. Lower birth rates result from economic security and the creation of conditions under which all people are able to exercise control over their fives and to plan for the future1. This requires increased levels of investment in rural areas, and an emphasis on access to opportunities for women.

The Opportunities The opportunities that are created by the enthusiasm of rural people, their willingness to work, their keenness to learn, and their wish to be integrated into the national economy must be unlocked. Rural people have shown a historic willingness to organise around development opportunities. We have a historic opportunity to reverse rural stagnation, to tie together the links between rural towns and their hinterlands, to put those who wish to farm back on the land, and to release and support rural entrepreneurship.

2.3 The Importance of Investing in Rural People and Rural Areas

The proportion of rural African households living below the minimum subsistence level in rural areas in 1990 was 68 per cent, compared to 42 per cent for the whole population. We can safely assume, therefore, that most of those born in rural areas from 1985 to 1991 were born into poor households. Without successful rural development, these people can give little to the new South Africa. Many will be women, they will be unhealthy, politically and economically disempowered, and will maintain a high birth rate. We need long term investment to reduce poverty through empowerment of those who will stay, and those who will move to urban areas.

There is significant international evidence that countries that tackle rural poverty affect national poverty more than those that prioritise urban poverty'. Employment-intensive policies and small farmer strategies with heavy investment in suitable agricultural technologies and infrastructure have increased farm production and employment, and also non-firm Production through forward, backward and consumer-demand linkages. This is the reverse of countries like South Africa that have supported large farm development, displacing rural people into poverty in marginal areas.

South Africa's agriculture has strong forward and backward linkages with the manufacturing sector: 55 per cent of output went to manufacturing in 1988, compared to 26 per cent of mining output, and 58 per cent of the inputs are sourced from manufacturers 4. Increased farm production can also raise manufacturing production, as the agricultural manufacturing complex made up 11 per cent of GDP in 1990. Furthermore, manufacture of agricultural products is considerably more labour-intensive thin in the rest of the manufacturing sector, so that wage employment would be enhanced. Lastly, there are many comparative advantages to be exploited in trade and other interaction with countries in Southern Africa. While countries as far north as Tanzania generally have better agricultural resources than South Africa, our ability to sell processed agricultural goods in these markets should be exploited.

Rural households have a high income elasticity of demand for the products of agriculture and the agricultural manufacturing complex. Increases in rural wages will therefore lead to greater increases in demand for the products of this sector, with concomitant increases in employment in agriculture and in agricultural manufacturing. Deliberate government action to give rise to real wage increases in rural areas is therefore warranted as a kick-start to this process. This would be achieved by a labour-intensive investment programme, for which obvious targets would be those that reduce drudgery and increase health and productivity. This includes water and sanitation, rural clinics, education and training, housing and electrification, new and rehabilitated irrigation works, soil conservation works, rural feeder roads and on-farm structures. It will be essential that rural women are targeted for employment, to have the greatest impact on poverty. These should initially be concentrated in those rural areas with the greatest production and export potential.

2.4 Learning from the Presidential Lead Projects

Nevertheless, they are all required to follow development objectives: they have to come under community control, they have to involve capacity building, and have business plans that show how these will be done, what the projects will achieve, and how they will be monitored. The progress of the rural PLPs is discussed regularly by the RDP Rural Development Task Team, in order to ensure that those concerned with rural development policy in different departments learn from each other.

In rural areas, the main PLPs have been 12 water projects, the 9 land reform pilot projects, the BATAT programme within agriculture, community based public works programmes, and the Extension of Municipal Services Programme. There are many other PLPs that partly operate in rural areas, such as the clinic building programmes and school feeding.

Dealing with communities

There is great need for caution in assuming that local structures are representative or competent. Yet without true representation, projects break down, and issues of maintenance, user charges and levies do not get resolved. Furthermore, departments have found that NGOs sometimes bring with them their 'history' at a local level, which often creates adverse reactions. Some departments have also found communities demanding payment for attendance at meetings, even though the end result is supposed to be a community owned asset such as a water system. Thus many government departments are having to learn caution and patience. They have also found that they often need to maintain a close watch on local level management, and to assist communities with prioritisation, mediation and facilitation. Formal structures by which the state can keep assisting with these processes are an absolute necessity.

The RDP business planning process emphasises planning that will ensure payment for services. This has been found to be a useful device for getting communities to plan realistically and negotiate with each other and with government. It encourages prioritisation, and consideration of how and at what level services should be provided.

Training and capacity building are an area where government has little expertise. One department has stated that the most productive training, at least initially, is in concepts. Others have pointed to the importance of linking technical training and capacity building in administrative and management skills to project implementation to ensure full understanding and participation throughout the development process.

Dealing with provinces

All the programmes have to struggle with the lack of capacity at provincial level. Provincial governments are mostly new, and having to set up systems with no existing model to follow. There is much institutional chaos, while new programmes require new appraisal systems, and new ways to channel resources and monitor progress. Rural local government, which is likely to have access to even fewer resources, may take many years to become an effective channel for rural administration.

The provinces also suffer from undefined administrative functions, partly through lack of understanding of RDP processes and how they should be fitted into the normal activities of provincial government. The PLPs are often considered separately from other departmental business at provincial level. The Director Generals are often far too busy, and not yet receiving the assistance they need. Most provinces have not yet been able to set up the specific arrangements that will allow them to use RDP funds to assist with project planning and implementation, for example using the Project Preparation Facility.

Dealing with institutional rigidity at the central level

The RDP approach to programmes requires major changes in systems in national departments, involving wide consultation and transparency, business planning with measurable performance indicators, reprioritisation of budgets, new criteria for planning, community involvement at all levels and ownership where possible, capacity building and a need to communicate properly. Most civil servants are willing to reset priorities and accept change, but are not always able to do so. Some programme managers have therefore found that they need to employ outsiders to set the new priorities and the new systems that support them. This can only be justified if there is dear capacity development within the system.

A second area of rigidity is in financing mechanisms within government. It is difficult to set up new programmes within existing mechanisms. The most effective way round this is to use donor funds that do not have to be channeled directly through the usual mechanisms. This allows the employment of short term contractors and the quick purchase of equipment. However, such measures can only be a temporary stopgap. In time the changes in the budgetary process that are being initiated by the RDP office may bring more flexibility into system, but this will necessarily be slow.