By Maile Matsimela
For South Africa’s up-and-coming and smallholder farmers, understanding and implementing compliance requirements is not just about following rules but about unlocking economic opportunities.
While compliance might initially seem like a burden requiring extra time and resources, it serves as a critical gateway to formal markets, financial services as well as government support programmes.
This article outlines the essential compliance aspects that new and smallholder farmers should prioritise to transform their farming operations into sustainable enterprises.
Remember that compliance is a journey, not a destination. Begin with the basics most relevant to your immediate markets and gradually build your compliance capacity as your farming business grows.
Land tenure and rights
For smallholder farmers, establishing clear land rights is fundamental to ensure you have proper documentation of your land rights, whether through ownership, lease agreements or permission to use communal land. Verify that your intended farming activities comply with local zoning regulations and where applicable, secure formal approval from traditional authorities. Proper land documentation enables access to loans using land as collateral and participation in government support programmes that require proof of land tenure.
Water-use licensing
Water is a scarce resource in South Africa and proper licensing is essential. All water use beyond basic household requires registration with the Department of Water and Sanitation. Apply for the appropriate permits based on your water source (borehole, river, dam, municipal). And as part of water conservation practices you need to implement and document water-saving irrigation practices. Formal water rights protect your farm during droughts and demonstrate to buyers that your production is sustainable and reliable.
Food safety compliance: Your ticket to valuable markets
Basic food safety requirements
Even the smallest farms must meet basic food safety standards. Implement basic hygiene practices in production areas and ensure adequate storage facilities that protect produce from contamination. Also, maintain cleanliness during transportation of produce and establish record-keeping to keep simple records of planting dates, chemical applications and harvest dates. Even basic food safety compliance can help you sell to local supermarkets and processors who are unwilling to purchase from non-compliant sources.
Entry-level certification
Smallholders seeking to expand market access should look at getting LocalG.A.P., which is a stepped approach to full GlobalG.A.P. certification, designed for smallholder farmers. Secondly, get Participatory Guarantee Systems (PGS): Community-based certification systems recognised by many local markets, as well as Organic certification, which makes organic compliance more accessible for smallholder groups. Certification opens doors to higher-value markets, including export opportunities through aggregation with other certified smallholders.
Labour compliance: Building a productive workforce
Even farmers with just a few employees must adhere to basic labour laws. Have employment contracts that provide simple written agreements outlining terms and conditions. Adhere to the minimum wage in the agricultural sector (R23.19 per hour as of 2023). Farmers need to provide safe working conditions by ensuring basic safety measures are in place. You also need to register with the Unemployment Insurance Fund if you employ anyone. Proper labour compliance reduces the risk of disputes, improves worker productivity, and is increasingly checked by buyers concerned about ethical sourcing.
Market access compliance: Meeting buyer requirements
Quality standards
Different markets have different quality requirements. Farmers need to understand and implement basic grading for their crops, use appropriate packaging that meets buyer specifications, and deliver consistent quality and quantities to build buyer trust. Meeting quality standards allows you to sell to formal markets that pay premium prices compared to informal channels.
Traceability basics
Even simple traceability systems open doors. Implement basic batch identification and keep records of what was planted and harvested when. Also document sources of inputs (such as seeds and fertilisers). Traceability enables participation in lucrative supply chains that require tracking products from farm to consumer.
Financial compliance: Accessing capital for growth
Tax registration
Formalise your farming business through tax registration with SARS as a small business or agricultural enterprise. Then consider VAT registration if your turnover exceeds R1 million. Your business must maintain simple income and expense records. Tax compliance is often a prerequisite for accessing formal loans, grants and government support programmes.
Banking formalisation
Establish a formal banking presence such as a business bank account that separates the farm income and expenses from personal finances. Keep records of all financial transactions and utilise mobile banking solutions designed even for rural areas. A formal banking history builds the credit profile needed to access loans for expansion.
Government support programme compliance
Many government programmes support smallholder farmers but require compliance with a registration as a farmer with the Department of Agriculture. It is advisable to also join local farmer associations to access group support. Meet basic reporting requirements for any subsidies or support received. Compliant farmers gain access to subsidised inputs, equipment, training and extension services that reduce costs and increase productivity.
B-BBEE participation: Leveraging transformation initiatives
For smallholders looking to grow, it is important to position your farm so that you can participate in corporate supplier development initiatives. Form or join cooperatives that meet B-BBEE requirements and maintain proper documentation of your status as a black-owned business. B-BBEE compliance helps access preferential procurement opportunities from large corporations and government entities.
Practical steps to achieve compliance
For resource-constrained smallholder farmers it is advisable to start small and focus on the most critical compliance areas for your target markets. Seek assistance by utilising extension services and NGO support for compliance guidance. Consider group certification and compliance through cooperatives. Use simple mobile apps designed to help smallholders with record-keeping and then implement compliance requirements in stages as your business grows.
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