Poor households protect themselves from income risk by diversifying their sources of income. A rural household is likely to depend on some agricultural production, small scale entrepreneurial activities, a remittance from a family member, and, if at all possible, a pension. None of these is secure, so even when one seems to offer real hope of raising household income, a broad range of activities is often maintained.
The wider the range of jobs and activities that is created in an area, the more people can provide services to each other, the more markets will be created, and money circulate. A development plan for a rural area must therefore tackle employment issues through as wide a range of activities as possible.
This will allow many households to benefit from increases in productivity in at least some of their activities, and create increased access to markets.
Before its reformulation in 1991 the Regional Industrial Development Programme, RIDP, sought to subsidise industrial development in or near the borders of the former homelands where population was concentrated for historical reasons. However, the policy failed to reduce disparities between rich and poor regions or to stimulate economic linkages and agglomeration economies within poor regions'. The new RIDP seeks to promote development on the basis of regional resource endowment and comparative advantage. It is expected to lead to greater concentration of industrial activity at established urban centres, and is therefore not a mechanism for rural development.
Internationally, the failure of deconcentration strategies has led many cities and towns to seek local solutions to local economic problems. These local solutions have come to be termed 'local economic development'(LED)6. They refer to efforts to increase growth and employment, and to develop markets. The concept is usually applied in urban areas, but there are two respects in which it is useful in rural areas: first, the importance of local solutions to the development of small rural towns, and second, the emphasis on obtaining the advantages of agglomeration, which is usefully captured in rural areas through a deliberate attempt to promote markets.
An LED approach requires a change in emphasis, with local government, business and communities playing innovative and active roles in securing growth and development. Clearly the greatest difficulty with such an approach in South Africa is the distrust and enmity of a radically divided population. But South Africans have also shown that much can be achieved through negotiation, and local level negotiation is crucial to the development of society as a whole.
How then, can these ideas be applied to small rural towns in South Africa? With few exceptions there are two types of rural town: those in the large scale farming areas, which have often lost their connections with the surrounding rural areas as more and more farm production is moved directly to the national market; and those in the former homelands which grew in response to the pressure of displaced people, or were created for specific administrative functions. In both cases great efforts will be required to build a local economy based on the exploitation of local resources in the rural areas around, such as the development of the small farm sector, of agri-industries and other resource-based production, and of tourism and ecotourism possibilities.
All of these paths will be enhanced if there are active steps to increase access to information, encourage community organisation, and develop a social compact around coherent, widely agreed development plans. This can be promoted through deliberate capacity building so that individuals take control of their own destinies, and with the injection of outside financial support. However, with little overall support available compared to need, communities will have to manage with as little as possible, and target it well. They should insist on positive contributions from the local business sector as well, including large-scale farmers, agricultural input suppliers, mining houses, and hotel and retail chains.
South Africa's most expensive legacy is the inefficiency of its spatial arrangements. Not only were people separated geographically, pushing the poor to the edge of working systems, they were also separated in administrative, economic, social, service, information and cultural ways. Effective and quick ways to reintegrate on all fronts are needed. Periodic markets, set up in weekly rings of markets, can act to correct underlying structural imbalances. Every person knows where and on what day there will be a market. On market day the full range of urban functions can be taken to a marginalised community for a few hours a week, and communities are able to join the regional and national trading systems on good terms. Traders, marketers and service providers follow the ring of markets, gaining a full week's work. The markets, by adding a rhythm, a calendar, to the landscape, congregate people, allowing for economies of scale, lower unit costs, and a greater diversity of goods and services.
Until now agencies of all kinds have promoted production, and people have tried to make a living through vegetable gardens, small trade and manufactures. The failure rate has been so high that in many areas over 80 per cent of families have no value added activity. Such areas spend remittances and pensions largely in established white towns. The main reason for the regular failure of small initiatives is that there is little cash circulation. Markets tackle these fundamental flaws. Markets call forth production, and the quickest way of creating jobs is through investment in production. One way to achieve this is by raising the circulation of cash in marginalised communities. At present the local circulation of cash in most of South Africa is poor, and the majority of South Africans live in cash deserts without the means to conduct transactions amongst themselves.
By correcting the centralisation of the past, where, for example, 720 town markets in 1910 became 15 national vegetable and fruit markets in the 1950s, cash circulation can be rapidly increased. That would unlock the productive skills and resources of millions of families, raising the return to direct public and private investment. Periodic markets order a shift from knits regions into economic and cultural entities. By traveling out to markets and seeing many people in one visit, agents, service providers and traders can also cut the costs of official public and private travel considerably while raising their effectiveness.
| Provincial and local government departments can promote their own efficiency and the success of a market strategy by taking services to markets on a weekly basis. Pension pay-outs are an obvious example. In addition, the Department of Health can be assured of goods attendance at clinics, and mobile post offices will be given and obvious route to follow. All of these serve to 'take the town to the countryside'. Many other services are possible, and should be encouraged by the provincial authorities. |
In March 1995 the Department of Trade and Industry published a White Paper on a National Strategy for the Development and Promotion of Small Business in South Africa as a vehicle to address job creation, economic growth and equity. With these objectives, there is recognition of the particular problems of enterprises run by the most marginalised groups, and so there will be additional assistance targeted towards them, particularly women and rural entrepreneurs.
This makes good sense, as 62 per cent of the people involved in this sector are women, and many people in rural areas are already involved in 'survivalist' enterprises.
Based on the belief that there is sufficient capital available for investment in SMMEs, and that there is sufficient training capacity, the national strategy sets out to restructure the institutional framework of support for SMMEs. The main strategy is to create a national network of local service centres (LSCs) where a variety of services can be accessed. The LSCs in rural areas will receive subsidisation, and some activities in all LSCs may be subsidised to assist with targeting. Each will have a local control structure, and will need to prove accountability and transparency to maintain its accreditation. The LSCs will mostly assist entrepreneurs in obtaining access to hard skills training, for which they must pay, and will provide on-site 'hand-holding' to developing businesses for sustained periods.
In addition to ensuring that all local entrepreneurs learn how to access the information, advice and other programmes available through the LSC, local government and other organisations can lobby for local procurement and subcontracting of local enterprises. They should also ensure that local by-laws and higher level legislative and regulatory mechanisms promote rather than hinder local entrepreneurs. They can also ensure that there is a good linkage between the ISCs and the private training centres that participate in the 'Scheme for the Training of Unemployed Persons' administered by die Department of Labour, which provide fully subsidised training in 500 centres.
| Three factors will be crucial in allowing rural people to progress beyond 'survivalist' production, namely information on sources and costs of inputs; on markets for their production; and financial services. Access to financial services for rural people is constrained by a number of factors, the most important being the lack of a comprehensive institutional structure which will bring these services to potential clients. Currently only a small number of potential clients is reached by the existing financial institutions. The current clients are mostly urban, and mostly poor. Rural local authorities must work to encourage the development of local financial services, but never through subsidising them, for they must be financially viable to be sustainable. |
Investment in agricultural requires investment in suitable agricultural technologies and infrastructure to increase farm production and employment, and also non-farm production, through forward, backward, and consumer-demand linkages.
Small scale agricultural enterprises and agri-businesses are rightly regarded as SMMEs by the Department of Trade and Industry, and will be able to profit from its services. But the major promotion of the sector will come from the provincial departments of agriculture, and especially from the BATAT programme.
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BATAT involves:
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Phase one of the programme consisted of the development of the lead programmes listed above. The programmes themselves are being launched in each province. But agricultural development is not a neutral technical exercise, as the history of South African agriculture well illustrates. The objective is to develop the potential for assisting small and medium scale farmers, emphasising market orientation, developing the capacity for participatory research and technology development, and improving the efficiency and effectiveness of government and the Agricultural Research Council to the benefit of all farmers.
The thrust of promoting small scale agricultural and forestry production for local and national markets in no way undercuts the importance of extensive production in the large scale farm sector, especially of low cost food grains destined for urban markets. Current agricultural policy promotes greater diversity of scale and type of production in South Africa, which is expected to increase the efficiency and vitality of the agricultural sector. However, small farm and forest production is a more deliberate attempt to increase employment and provide products for the immediate local market and for local agro-industry and is therefore a coherent part of an integrated strategy for local economic development. Concurrently, the land reform programmes of the Department of Land Affairs will be critical in widening access to land.
Many studies have shown that tenure security is a major requirement for agricultural and forestry investment and development. The Department of Land Affairs is developing policy in this area, to allow greater security in all South Africa's land tenure systems. But this is also a local issue, and may require intervention through local council by-laws.
Finally, the role of changes in the marketing opportunities for agricultural and forestry products must be emphasised. The Marketing Act is currently under discussion, and will certainly be amended to reduce the regulatory powers of the Agricultural Control Boards, and thus widen opportunities for new entrants.
South Africa has a rich historical heritage and a wide variety of cultures, in addition to the wildlife, scenery and coasts for which it is better known amongst domestic and foreign tourists. In times of peace, these provide an immense potential for the development of a diverse tourism industry-, and South Africa's apparent superiority in infrastructure development provides an advantage over other parts of Africa in the eyes of international tourists.
However, tourist development has generally followed a narrow path, keeping within apartheid geographic parameters and providing incomes largely to the major hotel chains and transport companies. The best known example of the problems that arise is in attitudes towards the parks. The lack of income and access by the majority of rural people, arising from the alienation of land to the parks, his led to friction over land use and little reason to appreciate or protect wildlife or tourists.
Crop Land Access and Use in Rural Areas | ||||||
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Households Ranked by Consumption Groups of 20% (Quintiles) | ||||||
All Rural South Africa | Quin.1 poorest | Quin.2 | Quin.3 | Quin.4 | Quin.5 richest | |
Percentage of Households with access to land | 26.2 | 27.5 | 28.1 | 25.8 | 18.4 | 28.1 |
Average Size of Land Per Capita Used Last Year (hectares) | 4.6 | 0.3 | 0.4 | 0.8 | 4.5 | 63.7 |
Percentage of Available Land Community Owned | 69.2 | 84.5 | 70.0 | 65.6 | 55.0 | 15.5 |
Percentage of Available Land Privately Owned | 26.8 | 13.5 | 26.0 | 29.1 | 44.0 | 70.6 |
Source: RDP: Key indicators or Poverty in South Africa, 1995
Internationally, the trend is towards forms of tourism that educate the tourist about history, the environment, and cultures. This trend provides opportunities for communities in rural areas to re-evaluate their opportunities for tourism development that will bring tourists to areas of South Africa that they have not been to before, and to bring wider sections of the community into profitable activities connected with tourism. Furthermore, if done well, tourism development can bring different groups in the community closer through creating greater awareness of each others' cultures.
Tourism development has the potential to bring consumers to new areas and to bring in outside funding. However, communities have also to consider, and perhaps take evasive action, against problems that can be created by tourism. Income from tourism can be unreliable and is usually seasonal, so should be one part of wider economic planning; it can be stressful to local communities if not well planned; and it requires a sophisticated chain of support networks.
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Rural communities can lobby to ensure that all structures built with government funds use labour-intensive techniques, and will thus provide local employment. They can also apply to the Community Based Public Works Programme (CBPWP) at provincial level for funding for special employment projects for the poor. The CBPWP and the reorientation of building methods through public sector transformation fall under the National Public Works Programme. This programme aims to provide jobs and create infrastructure, to develop human resources through training programmes, and to empower communities.
The CBPWP is specifically targeted to benefit the poor. Such programmes must offer a fairly low wage that ensures that only the poorest benefit. Two provisos make this acceptable' to the unions: the programmes must be clearly distinguished from regular employment, so that the relief wage does not become the standard wage, and workers on the projects must gain in other ways. The current programme is grappling with ways to ensure the latter condition, and one option is that workers receive a training entitlement linked to adult education establishments for a course of their own choosing. It is anticipated that many will choose to take up skills-training allied to the work in which they are involved.
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In various ways public sector transformation is designed to encourage labour-intensive methods for all construction carried out by government departments, so that clinics, schools, and other normal infrastructure development can use these methods. Among other things, it includes:
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The Department of Public Works is planning the training it will provide on labour-intensive methods to contractors and supervisors. District and local councils will certainly wish to ensure familiarity with these methods, and can ensure that contract bids are assessed according to criteria of labour intensity. Properly done, labour intensity neither raises overall costs nor slows the completion of contracts.