JOHANNESBURG – According to the Water Efficiency Report released by ActionAid South Africa on Tuesday, big business should be taking the lead in helping to deal with the country’s water crisis. Because of the threat that water scarcity problems pose to both the social and economic stability of the republic, it urges industry to become involved, at least as much as government, in addressing the issue.
Perhaps there is even a space for a water innovation industry to sprout, much as the renewable energy industry has burgeoned in the face of policy uncertainty and pressing need.
“Companies, whether they are big, small or medium, are all going to be affected by the water crisis one way or another,” says water expert Anthony Thurton, who contributed to the report. “Some of them are going to be affected negatively and they’re going to either ignore it – in which case they will become victims of the situation – and others are going to be very progressive and very positive about it, and they are going to change their business model and tailor it to the new reality.”
Thurton is also the director of water technology company Gurumanzi, which provides ‘uninterrupted water supply solutions’ that address the water risk problem much like an uninterrupted power supply eases concerns over load-shedding and other power cuts. It provides a back-up water reserve that lasts up to 48 hours, that can be rented by households, schools, hospitals, and even residential or business estates.
“There are many examples of solutions that companies are working on and they are all disrupters, or game changers in their own right,” says Thurton, referring to one company that is in the process of developing a solution that treats borehole water to improve its quality.
Privatisation is controversial
Johann Boonzaaier is the chief executive manager of the Impala Water Users Association, which owns a dam in KwaZulu-Natal in the only area that has not been affected by the drought because Impala was able to sell water to the municipality. The dam is about the same size as Hartbeespoort Dam and, according to Boonzaaier, would cost around R600 million to build at today’s prices.
But he says privatising water is a controversial topic because access to water is a basic human right. He believes there is much to be done with regard to regulations in such a scenario. He points out how Eskom’s price increases have had a dire impact on the economy and that this would be magnified if the price of water were to rise to match its scarcity.
“The danger of that is that many peoples’ livelihood depends on that water,” says Boonzaaier, “and if you get industries that can pay the highest price, then what will happen to the majority of farmers who farm for subsistence and cannot afford to pay that price?”
The report also notes that making agricultural irrigation systems more efficient could save up to 40% of current water use.
“Another question is, what is the value of water? For us, the value of the water use is the total cost of maintaining the resource. But in the Western Cape, the price is four times what ours is. So how do you decide? You must remember that, you can get along without food for a while, but if you go two days without water you’re bound to perish.”
Thurton says the National Water Act and the Water Services Act are under review, and that there is a drive to have them amalgamated into one piece of legislation to address the changes that are necessary to improve water efficiency. One of the suggested changes would see residential estates being regarded as water service providers: they buy bulk water from the local authority and distribute it to their users.
South Africans use 235 litres of water per day, while an average world citizen uses 173 litres of water per day. If municipalities could reduce the per capita consumption to the world average, the demand-supply gap would be reduced by almost half – SA Water Efficiency Report 2016
“In effect, what that will do is it will privatise a certain portion of the value chain, and that will open up a whole new way of doing things… On the one hand it presents new business opportunities but on the other it is completely uncharted territory,” Thurton says.
Providing water is government’s responsibility
The report states that, while there are already acute water shortages in 6 500 rural communities, the problem will spread to the metropolitan areas. It states that, by 2030 there will be a 17% supply deficit, with the large cities being the worst affected.
“Cape Town, which falls within the Berg Water Management Area, will need to close a gap of about 28% to meet demand,” reads the report.
But Emily Craven from ActionAid South Africa says the intention of the report is not to start a dialogue on privatisation, but rather how to eradicate the inefficiencies within the country’s water eco-system. In some cases, this would lead to the companies that are directly responsible for those inefficiencies benefiting financially from perpetuating them.
Says Craven: “It would be a bit worrying if the first response from a report like this is a debate on water privatisation. Ultimately, it is government’s responsibility to ensure that people have access to clean, healthy water. That said, there is space for technology to be used to improve the system… We have seen it where mines have water purification plants that allow them to put water back into the system… What worries us is when the monetary value is put into the equation. Because mines are the biggest polluters of the water, essentially what you would have is municipalities buying their own water from the mines that polluted it in the first place”.
After being out of fashion for a long period, agriculture has been coming back into the spotlight again as part of development policy. Amid rising concerns about food insecurity and high expectations from agribusiness, policymakers have started to emphasise the importance of agriculture as a source of employment.
Across Africa interest in agricultural investment as a source of employment growth and profit is growing. In South Africa, the National Development Plan identifies agriculture as the potential basis of one million new jobs.
But how realistic are these hopes? In our globalised and competitive world, agricultural development is not a great direct generator of jobs. In fact, increases in the intensity, efficiency or competitiveness of agriculture often push large numbers of people off the land. Farm workers, less efficient small farmers, and women often get the short end of the stick.
Policymakers often assume that this is an inevitable part of progress. In the past, displaced rural labour has often found alternative employment in the cities. But in many parts of the world, including sub-Saharan Africa, the prospects for this are slender. Agricultural development may enrich a few – but it can also swell the numbers of the urban poor.
Agricultural development can only serve inclusive growth if it contributes to an inclusive and diverse rural non-farm economy. Unfortunately, policymakers tend to ignore this issue. Agricultural policy is not much concerned with labour markets, while industry and trade ministers tend to concentrate on urban issues.
This is an important gap. Policymakers need to ask how different pathways of agricultural development affect non-farm employment.
A DIFFERENT APPROACH
A recent multi-country research project funded by DfID and the ESRC suggests that the right kind agricultural development can indeed stimulate rural non-farm job creation. But the links are neither simple nor direct.
The study by the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape investigated linkages between agriculture and the non-farm economy. It focused on three rural districts: Weenen in South Africa, Mchinji in Malawi, and Mazowe and Masvingo in Zimbabwe.
Rather than the social accounting matrices usually used for this kind of research, PLAAS and its partners took a qualitative approach. They carefully mapped the flows of money and resources that connect local agricultural enterprises to upstream and downstream markets.
What has emerged is a complex picture. What is good for the farmer is not necessarily good for the non-farm economy. Farmers with deeper pockets may not always spend their gains in ways that benefit their neighbours. Rather, beneficial effects depend on the local political economy.
Three factors are particularly important:
- the scale and ownership of agriculture itself;
- the pattern and design of upstream and downstream linkages between farmers and the rest of the economy; and
- the nature of local social dynamics and power relations.
Each case study revealed a very different scenario. In Mchinji small-scale farmers on communal land accessed local fresh produce markets by venturing into horticulture. Many new local livelihood opportunities were created – but these were small and vulnerable.
In Mazowe, small-scale tobacco growers who benefited from Fast-Track Land Reform made good money from distant markets, particularly China. This in turn created many opportunities for specialised local entrepreneurs.
In Weenen, large-scale agriculture turned out to be disconnected from the local economy. It had upstream and downstream links to distant markets but contributed little to employment in the area.
An analysis of the spatial patterns revealed by these case studies suggested some important insights. Simply being connected to distant markets is not enough to guarantee that agricultural development benefits the local non-farm economy.
Access to distant markets can support local employment. But this only happens if such farms are located in dense local networks that are socially embedded and not characterised by highly unequal power relations.
Where there are such networks, the local economy can benefit from trade and income flows. These benefits accrue through the purchase of intermediate inputs, and from local consumption and investment expenditure. They also come about through local retail, processing and transport of agricultural produce.
The scale of agriculture is an important factor too. In the South African case study, large-scale commercial farmers gained good incomes from highly efficient farms that served distant markets. But they also bought their inputs from distant suppliers. They provided little employment locally, and most of their spending on goods and services took place elsewhere. In Malawi, the same tended to be true of large estate farms.
This contrasted strongly with Zimbabwe where, for instance, the opportunities linked to small livestock farming and to small tobacco farmers’ windfalls from trade with China circulated in the local economy.
In all these cases, a common pattern emerges. Where large-scale agriculture is owned by distant players or by a farming elite with few local political or social commitments, the economic networks they create are unlikely to stimulate local opportunities.
Similarly, some kinds of economic integration can actually worsen marginalisation and unemployment. The positive spin-offs of agricultural development in Zimbabwe and Malawi, for instance, seem to be strongly linked to the absence of powerful, vertically integrated and internationally owned corporate food retail chains and supermarkets.
When big supermarkets enter, they create some formal sector jobs. But they also marginalise local farmers, compete with local traders, and suck money out of the local economy. In contrast, small and locally owned retail enterprises and markets are a key element of the agrarian structure. While often modest and not very glamorous, they are crucial for circulating money and economic opportunities.
In all three countries, the research suggests that ensuring an inclusive rural economy is about much more than growth in agricultural trade. Aside from exporting agricultural produce, rural economies tap into national and urban economies via social grants and public service salaries.
Links are also developed through the expansion of the non-agricultural urban economy into rural areas. The existence of migrant networks and “stretched” households that straddle the urban-rural divide also helps.
Additionally, many agricultural entrepreneurs also depend on other, non-agricultural service industries. These include tourism, hospitality, the building trade and small town services.
So, while agriculture can contribute to local employment, it is better able to do so when there is a diverse, rural non-agricultural economy. This diverse economy can ensure that more money is circulating in the local markets, benefiting farmers and other entrepreneurs dependent on agriculture.
These findings have important implications for agricultural and economic policy.
First, they suggest that agricultural policy should promote smallholder agriculture – not simply as a contribution to food security, but also as a source of employment, and as a powerful hub for forward and backward linkages into the local economy.
In South Africa, while there has been lots of pro-small farmer rhetoric, agricultural and land reform policy is in practice still biased towards large scale farming. The time is overdue for genuine pro-small farmer land reform.
Where rainfall and markets allow, this kind of land reform can make an important contribution to the rural economy and the survival and welfare strategies of poor South Africans. Such a policy would also enable beleaguered medium-scale white farmers – who contribute little to food security anyway – to exit the market.
Elsewhere in Africa, land and investment deals that create large-scale farming enterprises, externally owned and plugged into distant export markets, are unlikely to contribute to local employment. They should not be supported in the mistaken belief that they do.
Maximising the economic benefit from agricultural development and smallholder farming requires better support for local retail and informal markets often disregarded by urban planners. These markets include those for livestock and fresh produce.
Finally, local planning, land use, zoning and anti-trust law and policy should be geared to protecting small informal growers, markets and retailers from being swamped by large-scale agriculture and the intrusion of powerful corporate retailers into rural markets.
Article Source: sabc
Image Source: theconversation
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I had no idea of the long term effects of the GCIP programme. The webinars and training were helpful and this was evident at the recent Climate innovation centre
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About the GCIP
The GEF (Global Environment Facility), UNIDO (the United Nations Industrial Development Organization) and TIA (the Technology Innovation Agency) in South Africa are implementing the GCIP (Global Cleantech Innovation Programme) for SMEs to promote clean technology innovation and supporting SMEs and start-ups working on solutions related to energy efficiency, renewable energy, waste beneficiation and water efficiency. The programme combines a competition and a business accelerator to offer participants progressing through the programme extensive mentoring, training, access to investors and opportunities to showcase their innovations to the media and the public. Participants stand a chance to win a cash award and national business support awards, in addition to a trip to Silicon Valley, CA, to participate in the Cleantech Open Global Forum.
We are calling for applications! Applications close 15 May 2015.
Source: Press Release
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