iZindaba Zokudla hosted the Virtual Farmers’ Lab in 2021 and this series of panel discussions streamed on Facebook in 2021 (under iZindaba Zokudla’s “Events” tab) focused on urban farmers and the “Township Economy”. These discussions hosted NGOs, the West Rand Mega Park and its “Farm2Fork” system, cannabis, chicken and vertical farmers and also financiers and “seed librarians”. These discussions hinted at the possibility of a larger programme of economic development for informal businesses, albeit with a focus on urban, peri-urban and small-scale agriculture. This article summarises the insights gained in hosting these panel discussions, and it develops the outlines of a larger programme of support for informal business in the Townships of South Africa.
South Africa’s agricultural and food system includes almost 2.3 million households who produce for sale and own consumption and about 300 000 producers who regularly produce for the market. These producers cannot afford the expensive inputs of conventional agriculture, and if they had to, would probably not be farming at all. Many see the path to development in the adoption of technologies and systems from conventional agriculture, and Sihlobo and Kirsten identify better state support – from national and provincial right down to local government service delivery, technology, the consolidation or unification of agricultural organisations, collaboration between state and commodity organisations and better infrastructure as key in this endeavour.
The very large constituency of mostly African Farmers at the end of the food production spectrum will benefit from appropriate economic development, but a more sociological analysis of this group reveals that the path to development may lie outside the “conventional” system. These farmers focus on feeding themselves and their immediate communities. We need to understand how the costs associated with conventional agricultural inputs and competition with concentrated processor and retail conglomerates in the food system affect the developmental prospects of such small farmers. The environmental impact of conventional agriculture immediately affects the productive potential of these farmers, as they in large measure depend on biological inputs. Any developmental programme for this constituency needs to enhance the ecosystem services they depend upon, and has to find a way for them to gain a greater share of the retail price of food.
We need to understand that these farmers need to be primarily “developed” within an agro-ecological paradigm, which could increase volumes and profitability enough to secure their immediate markets. This agro-ecological knowledge will also benefit other rural producers to start the journey to sustainable practices. Below we set out a programme of enterprise development for nascent, emerging, small, and regenerative farms for the almost 2,5 million farming “units” at this end of the food production spectrum.
Township businesses in the South African and Global economy
“Developing” survivalist, precarious, informal and “Township” businesses has always been an enigma and hard nut to crack. In this article I would like to present a programme of economic development for this nascent sector, by using urban agriculture as a focus. In a sense, these recommendations are relevant to those contemplating economic entry and developing new and “emerging” businesses in the food system, and offer clear lessons and strategies for those in related and established businesses.
iZindaba Zokudla uses multi-stakeholder engagement methodologies to mobilise and recruit stakeholders through engagement events, and it aims at the creation of groups (built around commodities or any other challenge or issue) through the facilitation of engagement. Often, multi-stakeholder engagement processes are used to bring new producers into the food system, and this is done by focussing on a particular commodity group. These bring hidden interests that may affect the processes of engagement and the path that a new and emerging entrepreneur would follow in establishing herself. At stake here is not necessarily to “de-link” emergent producers from the “system” but rather to allow them to create a new system that will avoid repeating unsustainable patterns in the food system.
iZindaba Zokudla aims to host all its engagement activities in public, so we can off-set any dominant interests that may affect the entrepreneurial journey of a new entrepreneur. Mobilising in public (as an alternative to creating “organisations” with distinct boundaries) allows some to act outside engagement processes and replicate what is done in these processes. This alternative to traditional extension has great systemic effects when we “scale up” what one person is doing. This off-sets the dominance of large players and enables new entrepreneurs to develop their own networks and relationships with others, bringing innovation. This would lead to group formation, and iZindaba Zokudla focusses on the management of these groups. We need to increase the density and depth of local relationships for Townships to spur the development of more and better enterprises that offer really good value to customers. We at iZindaba Zokudla have identified Communities of Practice as a vehicle for the development of groups of entrepreneurs (please see our position paper which has been upgraded and is being reviewed for publication). This allows farmers to manage their own entry to the economy as a collective, and with social media. Such groups can, particularly in the informal sector in “Townships” with less than satisfactory retail penetration, embark on a localised programme of economic development that builds on local synergies.
Agriculture as a whole needs to change, and with it the system of agricultural support, which is skewed in favour of large producers in the first world. A smaller producer, be they urban, peri-urban or rural, is “structurally” disadvantaged in these value chains, not only due to their size of operations. These represent the majority of farmers in the real world. To build viable enterprises at this level in the economy, the terms of engagement with the producer, from production to retail, needs to change. Townships have been marginalised, but the apartheid marginalisation of Townships has created fertile ground for the localisation of our current “informal” food and economic systems.
Sustainability, circularity and competition
Townships export value away from local areas as people often shop outside the township or in malls with globalised supply chains, and often work outside the township. Life is made difficult by public health impacts like dumping and a neglect of waste removal, and this has immediate effects. The “market failure” we witness in Townships (particularly in secondary and smaller towns) must be addressed by enterprise development models and pathways that will create and accumulate value in local contexts. It is this value that needs to be “translated” to better incomes, better value products and better livelihoods for entrepreneurs and their customers in the Townships. Building Township economies should revolve around the capture and accumulation of value in local contexts, and this is the basic building block of the iZindaba Zokudla programme on Township economic development.
iZindaba Zokudla uses its Farmers’ Lab and the Virtual Farmers’ Lab to mobilise people to form groups so these groups can arrange amongst themselves opportunities for economic development. Township enterprises however occupy a subservient and marginalised position in the South African economy, and this follows the position of townships in South Africa society. This structurally marginalised position suggests that it will be nearly impossible to “develop” such enterprises beyond a survivalist sense, as customers buy elsewhere, branded goods are cheaper in supermarkets, and land, premises, finance and regulation benefit formal enterprises.
Sustainability needs to become a means to enable marginalised entrepreneurs to gain a foothold in the economy and should be the basic means by which we develop a new enterprise. At the level of new, emerging, and “informal” enterprise, we should see sustainability as means to establish a viable business, and this suggests a new business model for the Township economy. In a sense, the dearth of waste removal in townships, the lack of proper planning and existence of open space, and the supermarket prices of food, create economic opportunities. A programme of sustainable development for emerging enterprises would have to exploit these gaps in our society, and in a sense, fill them with sustainable enterprises that deliver net positive value. In a sense, the value that is lost in these gaps in the system, is the value that needs to be translated to a viable sustainable business.
Building blocks of a sustainable Township economy
Enterprises at the local Township level have to translate the “externalities” of Township life into value, and urban agriculture can focus on food prices, neglected open spaces, distribution opportunities, and recycling waste. The enterprise will benefit from new opportunities that low-cost social media makes available, and this can support production regimes that draw on local resources. This is an economic development programme that builds relationships and processes upon local food gardens and small farms, and uses this as base for small scale industrialisation.
We need to focus on the key opportunities and advantages evident in the local context. Much of this is due to past and present neglect, but we can also consider technological innovation and opportunities, and borrow further from global best practice. The “Circular” economy and enterprise would have to be the medium through which we develop our Township economies, mainly because these have a competitive advantage (as will be detailed below) as this enterprise model can exploit the wastes and opportunities that emanate from “interstices” between bad planning and practices and current economic structures in townships.
Below we discuss concrete suggestions on what we can do to enable these enterprises to create value and income for their owners, as it delivers social beneficial services and products to its customers. The viability of these enterprises would have to establish an “economic system” amongst them and the people who live in the townships. Ultimately the viability of this “economic system” will reside in the capability of these enterprises, and not in policy changes. Hence, we need these enterprises to be as strong as possible and that means they must transform local opportunities into high value products and services for the people who patronise them.
Local exchange, sales and retail
The food system includes biological and physical resources, production and ultimately retail sales and wastes. The length of this value chain determines the share farmers may receive but much of the unsustainability of the food system – food miles and excessive processing – draw value from lengthening this chain. Township producers need to intervene and develop short and immediate value chains and consider engaging with retail and waste. Means need to be found to make wastes in all forms available for processing by local farmers, which will enable food production to be competitive. This can be done through communication technology and tools such a food waste bins that can safely process wastes. These food waste technologies have been developed by the enterprise Compost Kitchen in Diepsloot, Johannesburg and this shows such an input generating system can work in an urban context. We need to further consider recycling as another ancillary enterprise to the urban farm, as food can be exchanged also for recyclable waste, which in turn can be sold. This strategy includes food waste for food, recyclables for food and labour for food that can ensure not only inputs but customer loyalty, as customers benefit from collecting. This will secure an inclusive relationship with customers and enable a farmer to become a recyclable material aggregator, and receive better value through “buy-back” centres to sell in bulk, or process this waste further. What we need is a bit of experimentation and adjustment amongst food producers, collectors and households, hawkers and reclaimers, and such an opportunity can be facilitated in a public event so we can maximise the learning and activities that are possible.
Stacking enterprises on the farm
Food can be exchanged for recyclables, and the farmer can manipulate the prices of food so that benefit is gained by collecting recyclable materials. Technology is almost ready to enable the further processing of such plastics. However, even if sold in bulk for a better price, the exchange of locally produced food for such a commodity will invoke local savings. This can be operationalised by accommodating additional enterprises (and entrepreneurs) on site. Should locally available open space be used for this (the City of Johannesburg’s By-laws do allow for this) the urban farm will become a means to effect waste planning, food production, and, limited industry if the plastics, glass and metal are further processed. All these materials are currently discarded, but form the base of an income generation system that needs very little capital. The inclusive relationships amongst the farmer, reclaimer and customers forms the basis of the viability of this enterprise model, and is the means to market its products. Interventions should thus focus on enabling greater experimentation and adjustments amongst such groups of enterprises. To do this, we need to allow farmers and others to develop the identities and profiles of their businesses, so that they can engage with each other as peers. This is the basis of group formation for economic development, and this can be enhanced by facilitating further engagement with additional stakeholders who have an interest in trading with them. In this regard iZindaba Zokudla has facilitated engagement amongst farmers with the West Rand Mega Park and the Farm 2 Fork systems, and, a.o. with financiers that focus on emergent and small farmers.
Technology
Technology can enable significant value adding to recyclables, over and above the aggregation strategy urban farmers can devise. However, much of the technology that would be needed to establish the above would need to be developed in-situ. Very little of this needs to be high technology. A simple food waste bin that is rat proof can be developed by local farmers or inventors, and this can build on the precedent set by Compost Kitchen. Industrialised high-tech solutions are available, and Compost Kitchen has developed several solutions in this regard.
Technology however can support the development of local enterprises’ processes and distribution. At the UJ we developed an electric buggy similar to many others that can enable better local distribution of product at low cost. This suggests the development of “intermediate” and “appropriate” technology should be the focal area of technology development. At the UJ we were able to develop 3 patentable technologies in one year with participatory design methods. A very modest programme could have far reaching effects…
Information and Communication technologies today enable a democratisation of innovation, and these afford great functionality to any user. WhatsApp and other platforms, as well as mainstream social media, enable anyone to create and manage networks and groups. These are excellent marketing, waste harvesting and promotion tools that enable an entrepreneur to contact customers directly and is appropriate for a locally based enterprise. Blend this with local intelligence, say, when and where SASSA paydays occur, and we have a competitive selling strategy. Distribution and waste harvesting will thus piggy-back on the underlying social capital and relationships people have (which can effectively be maintained at local level and with ICT) and this will only become stronger over time.
Compliance and formality
Compliance and formalisation are needed as we expect services and benefits from the state. However, this “rights-based” relationship is always susceptible to politics, and the politics of revenue generation often excludes the informal sector, with the result informal traders are powerless when it comes to influencing how they are governed. Being a “taxpayer” is an important marker of identity that allows influence over politics. Nascent traders need to take this seriously as they are vulnerable to the politics of local government regulation.
Of course, new entrepreneurs will be averse to paying tax, but serious engagement with the state, particularly if by-laws are used to gain access to open spaces, will be improved if entrepreneurs move towards formalisation. Turnover tax is very reasonable and signals formalisation, and it gives an entrepreneur some clout when dealing with the state. This may facilitate access to open spaces, the development of conducive trading regulations, and gives respectability to such entrepreneurs. Should the underlying enterprise model (as described here) be viable, taxation will be less of an issue. This creates a powerful incentive for the state to engage on entrepreneurs’ terms. Access to such spaces will enable firstly the creation of viable enterprises that will in turn enable revenue collection. This social contract will only become possible if entrepreneurs understand the effect they will have on society by moving towards formalisation.
Training, extension and support
The key in building an effective extension system is knowing what to do. Urban, peri-urban and small-scale rural enterprises (mostly based on food production) need a different set of knowledge and practices than conventional farming to become viable. The system suggested in this article can be facilitated and promoted through an extension system, but this goes beyond agriculture and should be focussed on multifaceted “enterprises” rather than a “commodity producer”. The need to develop ancillary enterprises in the urban context firmly points to an expanded function for an extension service.
The enterprises described here reinterpret the traditional ways we envisage supporting them. Below I elaborate on what conceptual lenses we should use to support this path of economic development.
The ecosystem and the enterprise: Nascent enterprises in the food and related systems are part of larger socio-technological ecosystem. When we “stack” ancillary enterprises on the same site we build local relationships. These relationships are the conduits of both an input, processing and retail strategy. Hence, we need to think about linking ancillary sectors with these urban, peri-urban and rural farms and this includes waste harvesting, catering, recycling and distribution and retail opportunities. Waste policy is an obvious focal point where great innovation can be made. Should rates and taxes be lowered to incorporate the opportunity to deliver all waste to reclaimers – we will build a revenue stream that directly benefits urban food producers and reclaimers of waste.
We can also usefully look at land use policy, and the possibility that a rental and other markets for open space in local municipalities can be created. This is possible, and the further development of knowledge and practices, technologies and business models for the development of these enterprises would enable them to establish themselves with the requisite dignity and aesthetics. What is important is that the connections with the urban or small-scale farming enterprise may not always follow agricultural lines and these have to be reconceptualised around the urban economy and food system. For small scale industrialists like a reclaimer dabbling in manufacturing and bulk sales, extension or support would have to follow the reclaiming trajectory (lower rates and taxes for residents who recycle, and further processing technology). At this point we should decide if we want to encourage the sale of plastic and other processing machines or take the arduous path of trying to subsidise these. To encourage the sale of these machines will be a very fast path to market and create a healthy ecosystem of trade that supports this nascent sector. For a caterer, access to locally produced food would be key, which would have to point to multiple producers to secure consistency of supply. Building synergies amongst enterprises, from waste collecting to farming to processing should be the intervention strategy.
Finance: The biggest innovation of this locally situated enterprise development model lies in its disruption of the debt mobilisation model for enterprise development. In this case, ecosystem services and the creation of social capital relationships, underlies the urban agricultural enterprise. For reclaimers, activities (collecting) and technology (sorting and transporting) and relationships with synergistic others (like households who produce the waste) should underlie the business model. All these are “constructed” through local relationships.
The above basic structure should be in-tact before an enterprise like this seeks finance. It may be better to secure this finance through metrics that calculate the benefits of including stakeholders (mainly residents) and consistency of behaviour amongst all stakeholders, which points to business processes. Hence, lists of customers and frequency of trade may indicate viability of the business. Finance may however be made available in new innovative ways, and perhaps a Grameen-style loan group made up of the primary producer, a technology developer and builder, and a distributor would be most appropriate here, and this would then be to build an ecosystem of enterprises. In all these cases, money cannot “build” the enterprise. The enterprise is as much intangible – based on relationships – as it is based-on tangibles like property and technology ownership.
Facilities and siting: Small-scale enterprises have an inherent disadvantage in a modern complex economy with small, large and very large players. The state however would have an interest in smaller enterprises as their welfare effects will eclipse social grants (mainly due to the low value of the grant) and public employment schemes. State largesse often cannot reach myriad independent entrepreneurs and is susceptible to patronage. We need to avoid such a situation where smaller entrepreneurs may be exploited politically.
Hence, a system of making open land available, and regulating it, needs to be properly understood. New planning regimes can be developed to ensure productive farmland is available for smaller producers and this can be made available at low cost but in a transparent and regulated access regime. This can avoid patronage and ensure productive land is made available close to urban centres where there are real food markets. This land can be made available in an allotment or other system, and the careful and thoughtful implementation of this could then also spur small scale industry and manufacturing, building on recycling and reclaiming. It may be possible to develop a land market (not only for small-scale farmers) that is isolated from the mainstream property market. Should we also be able to secure tenure for rural communal households, we can integrate them in local food markets as described above.
Networks: The key to enabling these a-typical enterprises would be to create networks wherein these exist. This could include customers and exchange networks, networks with the state that is regulated and specified (say on land markets) and other relationships around residents and local resources. The maintenance of these networks is as old as humanity, but these can cheaply be digitised, and this then creates a new avenue through which extension, training and knowledge and support could be disbursed. Electronic media has led to a proliferation of knowledge on the internet. This is not without challenges, but it points to the pluralisation of agricultural and business knowledge. This is more fertile ground for the development of sustainable enterprises than knowledge that is controlled by a commercial interest or commodity group. Soil health, for instance will benefit from general knowledge and this will be more important than producing a monocrop. The knowledge necessary to make small-scale nascent enterprises successful may still have to be developed and points to a new project of participatory enterprise creation and management. The management of these enterprises will revolve around the management of relationships, the development of new agro-ecological and small-scale industrial knowledge, and the management of local urban areas for the benefit of residents.
We have to be bold and imaginative in finding livelihood opportunities for struggling small-scale farmers and budding industrialists. We need to be clear also on why these struggling farmers are being marginalised in our food system. It may be futile to “develop” them in the image of a modern conventional farmer. There is good reason to believe agro-ecology and an appreciation of local contexts will make a difference here, and this basic model can be enhanced by social capital and relationships that will situate the farm in an socio-ecological whole where the current food system fails.