Research pick: Sustaining South African smallholders - "Government grants towards sustainability of agribusiness in local economic development"

Government grants aimed at boosting smallholder farming in South Africa are not delivering lasting improvements in business viability, according to research in the International Journal of Sustainable Agricultural Management and Informatics. The study suggests that while financial support has helped reduce immediate production pressures, many smallholders remain unable to implement sustainable practices. This highlights deeper structural weaknesses in the way public assistance is designed and delivered, according to the work.

Many regions across South Africa rely on small-scale farming to support the rural economy. But, many in a region such as Waterberg District in Limpopo Province experience high failure rates. Grants are available to ease financial constraints and encourage participation in local markets, but in practice, the study found that short-term gains rarely addressed long-term survival without ongoing subsidies.

In their survey of local agribusinesses, the researchers heard that farmers receiving support described noticeable reductions in production costs and improved yields, suggesting that these grants are not misdirected. But, the benefits simply didn’t last. Many recipients became dependent on continued state assistance, a pattern the researchers link to persistent gaps in managerial capacity, limited technical skills, and weaknesses in the grant allocation process itself. Many businesses failed even when they had ongoing subsidies.

The researchers thus argue for more rigorous selection criteria to ensure grants reach farmers with viable development plans. In addition, there is a need for better oversight to ensure that allocated funds are used appropriately. The team also stresses that there is a need for integrated support beyond a simple injection of cash, such as targeted training in business management and improved agricultural extension services. There is a need for public programmes that offer farmers with technical advice as well as better coordination among local agencies involved in rural economic development.

Makunyane, M.K., Pretorius, M., Venter, M., de Bruyn, C. and Sztando, A. (2025) ‘Government grants towards sustainability of agribusiness in local economic development’, Int. J. Sustainable Agricultural Management and Informatics, Vol. 11, No. 5, pp.1–15.