By Mbatjiua Ngavirue
WINDHOEK
The second question relating to the merits of the Affirmative Action Loan Scheme (AALS) is whether it is morally right for emerging farmers to misuse a programme meant to empower black Namibians to instead benefit white farmers.
Affirmative action farmers will, however, almost unanimously reply that the question of morality never arises, because it presupposes they have a choice in the matter.
Without exception, they will tell you that the economics of the AALS are such that they have no other option but to hire out their grazing just to survive.
While this is largely true, the issue is not clear-cut and cannot be painted in simple terms of right and wrong.
Emerging farmers themselves, Agribank, the government, circumstances and history are perhaps all equally complicit in the economic hardship faced by affirmative action farmers.
Above all, Agribank has shown an unfortunate tendency to fudge its own rules to the point where they have become almost meaningless, aggravating rather than alleviating the problem.
The original requirement of the AALS was that loan applicants should have at least 150 large stock units, or 800 small stock units.
In the case of large stock this actually meant 150 cows, a figure carefully calculated by agricultural economists as the minimum required to service the loan on an average-sized economically viable farming unit.
In reality, very few emerging farmers had that number of cows, and to make the scheme possible Agribank colluded with prospective farmers in a grand game.
In a few rare cases, some rich black farmers from the communal areas actually had cattle exceeding this number.
In some cases, applicants had mixed herds of 150 cattle of which only 65 or 70 might be cows – with a few heifers maybe mixed in – but with day-old calves also included.
In the case of many other farmers however, they never had anything close to 150 large stock units, with Agribank approving loans for some who did not even have half that number.
Others colluded with relatives in the communal areas by “borrowing” cattle from relatives, specially re-branded to deceive Agribank.
One affirmative action farmer disclosed that in the five years since he received his loan, Agribank had not once carried out an inspection of his cattle.
The bank simply took the number indicated on the application form at face value – no questions asked.
The economic realities of the AALS are that annual repayments, including interest, on an average-size farm are approximately N$80 000 a year.
In addition to this, the emerging farmer will need roughly another N$80 000 a year for operating expenses, making for annual total expenditures of N$160 000 excluding personal living expenses.
To meet expenses, emerging farmers sell young weaned calves (weaners) and cannot even contemplate oxen production.
With a mixed herd of 150 cattle of which only 65 to 70 – and in many cases far fewer – might be cows, it is impossible to earn enough income to meet those expenses.
When prices of weaners were still good, at around N$2 500 a head, the farmer in this hypothetical example would need to sell 64 weaners just to cover basic expenses.
That however assumes a calving percentage virtually unheard of in Namibia, at 91 percent.
Estimates of the average national calving rate among commercial farmers are an abysmal 60 percent.
A 60 percent calving rate with 70 cows would mean 42 calves, and annual income of N$ 105 000 – well below the N$160 000 needed to cover expenses.
Current prices for weaners average N$2 000, meaning income of N$84 000 is only just enough to pay Agribank, with N$4 000 in spare change left over for operating and living expenses for the year.
Unable to make it financially affirmative action farmers have to resort to all sorts of desperate measures to make ends meet.
Hiring out grazing is the most obvious, and therefore almost compulsory, as the first step towards trying to make ends meet.
Other even more desperate solutions are selling wood, making charcoal, hunting and selling venison or allowing white hunters to come and hunt on your farm.
Many argue that in the long term, none of these activities is either socially or environmentally desirable.
Leasing grazing to someone who has no long-term interest in protecting and developing the farm can lead to over-stocking, eventually causing lasting damage to grazing land.
Wood selling and charcoal production involve the extremely exploitative use of labourers, while indiscriminate hunting destroys the country’s wildlife resources.
In the end, white Namibians control the market for – and distribution of – these products and services, paying the black farmer a mere pittance.
“We have to sell the resources on our farms to white buyers, so in fact the government is subsidising white Namibians,” one AA farmer complained.
The tragedy for many AA farmers is that economic hardship has forced them into selling part of their breeding stock, i.e. cows and heifers, meaning they are farming backward instead of forward.
In many cases, the agreements between the affirmative action black farmer and the white commercial farmer are purely verbal, with no written contract.
This leaves emerging farmers in a weak negotiating position, leading to serious abuses where they are often subject to blackmail by white farmers.
In one case, a white farmer agreed to hire, for example, 80 percent of the farm paying a set amount per head of cattle.
The white farmer’s herd of cattle was then quite large, bringing the black farm owner a reasonable income to pay off his farm.
A few years later however, the white farmer reduced his cattle to only a fraction of the original number, thereby reducing the total payment per head of cattle to the black farmer.
He however insisted on his right to continue utilising 80 percent of the farm at a substantially reduced fee.
The affirmative action farmer was by this time totally dependent on the white farmer for paying his Agribank instalments.
He simply had to swallow the menu the tenant fed him, and keep his mouth shut.
With 150 cows, as originally intended, a farmer would produce 90 calves at a 60-percent calving rate.
The 90 calves sold at N$2 000 yield an income of N$180 000, thereby covering both the annual Agribank instalment and operating expenses with N$20 000 to spare.
Agribank’s decision to finagle its own rules may have been a well-meaning gesture to make it possible for as many emerging farmers to take part in the AALS as it could.
Belatedly there appears to be recognition that playing fast and loose with the rules is not a positive or sustainable way to empower emerging farmers.
In February 2006, the Joint-Presidency Group published a report that addressed many of these shortcomings in the AALS.
Affirmative action farmers themselves are also not short on ideas on how to redesign the AALS to make it a win-win situation for emerging farmers, Agribank and the country as a whole.