Mr. Speaker, I wish to announce that the business of the House for next week will be as printed in the Order Paper for Monday.

The House proceeded to the consideration of private members’ business.

Mr. Speaker, I move—

It is very clear that when the security of a country is being threatened a number of questions arise, especially questions such as: Where will one be the most vulnerable and what should one’s priorities be to withstand hostilities? In a period such as the one in which South Africa finds itself at present, it is clear to me that dozens of matters and tasks should receive simultaneous attention for the most effective action to be taken.

Order! I shall be pleased if hon. members would not converse so loudly.

It is not only the question of the arms supply and general military preparedness which is of importance in a period like this. I think it is accepted axiomatically that any military effort should be supported by a highly productive economy. We know something of this kind will cost money. Moreover, many of our entrepreneurs and workers will be out of the economic life of South Africa in a period like this. For that reason we as an agricultural group thought it fit to move this motion so as to give us an opportunity to discuss the question whether our agricultural industry will be able to play its role effectively, so that we may establish what the role of the agricultural industry should be.

Whatever I am going to say about the agricultural industry today, however, I want to qualify right at the outset by saying that no matter what shortcomings might exist in the industry, experiences from a number of world wars have taught us that although our agricultural industry produced a large percentage of the military manpower, nobody actually starved in that period. There were in fact shortages, but these one can understand. There were few producers, while many mouths had to be fed in that period. For that reasons I want to say to the hon. the Minister that in spite of the shortcomings which might exist in our agricultural industry I nevertheless have confidence that if this could be done at that time, there is no reason why it cannot be done in the future as well, provided that we are prepared to prepare the South African public and provided that the planning in our agricultural industry is correct.

†Nobody has doubts about the possibility of periodic military excursions around us in the near future. We know that we will not be able to stay out of it all the time, but the possibility also exists that such excursions will take place into South African territory or into areas for which we are responsible. The last time we had hostilities on South African soil, was during the Anglo-Boer War, and that was a long time ago. We also had the battles in South West Africa in 1914 to 1918. We shall therefore have to look very closely at countries which have had experience of continuous hostilities over the last decade or so. In this respect, I particularly think of countries like Israel and, a little closer, of a country like Rhodesia with a tremendous upsurge of terrorism which has virtually kept the country in a state of war. Whether we are going to have terrorism on a large scale or a shooting war, makes no difference. From both the lesson is apparent that physical attacks invariably take place in rural areas, on the border, and are easily extended into our extensive farming areas. Difficulties is therefore bound to occur and arise in farming and rural areas. In Israel it has become the deliberate policy to establish agricultural settlements, or as they are called, kibbutzim or moshavim, as closely as possible to the border of enemy territory.

It is done for security reasons and, as it is, some of the most important battles in which Israel was involved, took place around the kibbutzim and the moshavim. They are all in the front line. I have seen some of them myself and I have seen where some of the battles, especially during the Six Day War, took place. They are in the front line and have become protective fortresses. The Israelis, as I have said, are deliberately settling people in the rural areas. When they settle them there, they do so for a dual purpose: They not only produce food, but also form this defensive line of which I have spoken.

If we now take a closer look at South Africa, let us ask ourselves what we have done. What have been allowed to happen in this country? For years our rural areas have been allowed to become denuded of White people, so that the population of rural areas today consists largely of Blacks who, as the terrorists’ attacks in Rhodesia have shown, normally become an easy prey for such attacks. When you have a couple of terrorists’ attacks among the rural Black population, you immediately have confusion and chaos because they are people with easily impressionable minds. I believe that the depopulation of our rural areas as far as the Whites are concerned, has been a serious mistake and that this trend must be reversed. I am going to mention examples of where countries are thinking in the direction of countering the depopulation of their rural areas. In America, for example, you find today that sociologists and leaders in commerce and industry are realizing that they have to do something about this trend. Since the ’forties something like 30 million Americans have moved to the cities, and now they want to reverse this trend. Instead of establishing new towns in the country areas, the idea is to repopulate existing depopulated villages and towns, thereby giving them a new lease of life. An article has been written in the Financial Gazette during September last year by Dr. Peter C. Goldmark, who is apparently a very important inventor and physicist in America, the man who has been responsible for the first colour television system, the long-playing record and many other facilities. This particular person, as industrialist and physicist, is now, apart from heading the Columbia broadcasting system, trying to build a new society in a tent town rural area with 65 000 people in north-eastern Connecticut known as Windham Region. Anyone who reads this can see for themselves that it is possible to embark on a scheme of this nature. They have found that something like 70% of the people who live in cities really want to live in rural areas. The hon. the Minister has recently received a report which is called the Du Plessis Report on Rural Reform. Will he make this report available to us or is it just going to be a departmental report?

Surely you know it is to be released.

Good, Sir, if it is going to be made available to us, we would of course like to read it. We would like to go through it and would want to know from the Minister whether he is going to accept and implement the major recommendations of the report.

*Our rural population does not produce essential strategic food only, but also has to ensure that the essential Black labour force in its service has a satisfied and comfortable existence. A satisfied labour force is, after all, our best weapon against the terrorists or against any other enemy. An ever-increasing standard of living for our non-White labour force on our farms is of the greatest importance if we want to have growth and stability in our industry. I believe that the farmers are prepared to make sacrifices to combat inflation, because they too, endorsed the manifesto of the Minister of Economic Affairs. If we want to have stability and growth, the question remains: Can they continue to produce at the present producer prices. During the past year, for instance, there has been an increase of approximately 40% in the price of fertilizer. Initially there was an increase of 42%, then a decrease of 8%, and now again an increase of 6%. If one takes into consideration the fact that tractors and implements and other agricultural requisites and means of production increased in price by anything from 20% to 30% over the past year, it is not surprising to see that the wheat producers are now becoming just as dissatisfied as were the maize producers the previous year. This is because the Cabinet is not prepared to accept the price proposals of the Wheat Board. The hon. gentleman need only take a look at the report of the winter grain conference, which was held in Malmesbury recently. I have a cutting here from Die Burger. It reads (translation): “Dissatisfaction with the Cabinet’s repeated refusal to accept the prices as recommended by the Wheat Board was expressed here yesterday. ’’

But let us hear what Dr. De Swart of Sasko has to say. He states that the production costs of the wheat farmer rose by 24% between 1969 and 1973. However, between 1973 and the present it has risen by 110%, mainly as a result of the utilization of tractors, combines and other implements. Furthermore, Dr. De Swart holds out the prospect of a further increase of 30% before November this year. This being the situation, I ask the hon. the Minister to increase our agricultural production. In fact, everyone says we should do this. But how will the farmer be capable of doing this, if he is not given sufficient compensation or while this tremendous rise in production costs continues unchecked? This is the kind of thing about which the hon. gentleman should tell us what he thinks can be done. Because you see, Mr. Speaker, our agricultural industry—and we put it like this in our motion—is vital to the economic progress of this country. We know that had it not been for the R1 000 million in foreign currency which we earned through our agriculture last year, South Africa’s balance of payments would not, in spite of devaluation, have been on as sound a footing as it is now. I say this is not an amount which can be disregarded. We know there are dozens of countries around us which lack food, and for that reason it could become our major weapon. The more food we have for others and for our own people, the stronger our position will be at the southern point of Africa. We also know that much of our agricultural products is exported in an unprocessed form, whereas we can earn much more with that unprocessed agricultural product if we process it here in South Africa. Not only would this provide more work for South Africans; it will also encourage the establishment of light industries in the rural areas of South Africa.

More and more experts are asking whether our agricultural potential is being developed to the full, and it is in respect of the homeland areas in particular that this is being asked. By the end of this century, in 24 years time, we shall have to double food production in South Africa if we want to meet our growing needs. I want to tell the hon. the Minister that this is a monumental task. He and I and all of us sitting in this House are here temporarily, but we also realize that we should make provision for the future of South Africa. For that reason I want to put to the hon. the Minister the question which I have put to him so often, and to which I have never been able to get an adequate answer or any satisfaction. The question is: When is he going to give us that agricultural planning board that has been requested? He told us he would be providing it. But it is no use simply telling us he will be providing it; we should like to see positive steps being taken to create such a body. And I want to tell the hon. the Minister that we cannot delay any further and consequently the hon. gentleman and his deputy should spell this out to us. In the past we have spelt out what the role of such an agricultural planning board should be, and the Minister can simply go and read it. If he does not wish to go to that trouble, he need only ask me again and I shall come and talk to him. Sir, South Africa will have to do this kind of thing, for its own safety and also in order to be of service to the world, and especially to assist the Black nations around us, because by the year 2000 the world’s population will be 7,5 billion. The under-developed countries simply cannot supply their own needs, and those who cannot supply their own needs will have enormous social problems. And those of us who are in a position to export surpluses will be in a remarkable position of power. For that reason I want to say to the hon. the Minister, and I also want to conclude with that, because there are still many other hon. members on this side who want to discuss this matter …

Will Boet also be speaking?

Yes, the hon. member for King William’s Town the other day gave the hon. members a bit of advice and he will probably do this again today. Sir, one can summarize the matter by saying that stability in agriculture can be brought about mainly by doing the following: Firstly, by adopting drastic measures to halt the White depopulation of the rural areas; secondly, by increasing our agricultural production considerably; thirdly, by adopting drastic measures to combat the effect of inflation in industry, and I believe that we shall only achieve stability in our industry if, fourthly, we were to induce more young people to enter our industry. I also believe that the losses in our agricultural industry due to pests and plagues should be limited to the minimum. We are told by experts that in some of the under-developed countries, agricultural production is reduced by 25% as a result of this very factor. It could even be much more, and we in South Africa also feel the effect of weeds, of pests, plagues and cattle diseases. One does not necessarily have to increase one’s production by putting more into it, one can increase one’s production merely by substantially limiting one’s losses in this regard. I also believe that we can achieve stability in our agricultural industry if we process properly all by-products of the agricultural industry. Nothing should go to waste. I have here an article which appeared in Scientiae written by Dr. P. van Twis, in which he discusses the issue of important elements going to waste in, for example, the production of cheese. He says (translation)—

He says if this could be done with the proper research and if the correct processes could be applied, we could change this, too, into an acceptable food for man. Consequently I say that this, too, is a way of ensuring that nothing will go to waste in our agricultural industry. Furthermore, we would have to increase our agricultural production vertically to an increasing extent, instead of thinking in terms of bigger farms and fewer farmers. Recently I again saw that someone had predicted that in 20 years’ time approximately 80% of our farms would be in the hands of big companies and corporations. I ask myself whether this is necessarily the answer. I have already said to the hon. the Minister here that it has been proved scientifically that the moment an enterprise like agriculture becomes so big horizontally, one can no longer exercise proper control. The necessary increase in production per unit is lacking and one’s production costs rocket.

In the final instance we shall have to encourage mechanization, which is essential but extremely expensive for the individual farmer. Farmers will have to obtain this expensive machinery in a co-operative manner, and we should encourage them to do this and, by so doing, to avoid unnecessary individual indebtedness caused by buying this type of machinery individually.

Sir, I believe that if the hon. the Minister would listen to a few of these proposals and give his undivided attention to them, it would pay dividends. We know the hon. the Minister and his Deputy. They are not unfriendly people. They are not indifferent to the farmers of South Africa. But I pity them from time to time, because they are perhaps the only two fighters in a Cabinet which does not always think as they do. We on this side shall lend them support wherever we can, because we are aware of the importance of our agricultural industry, we are aware of the role it can play in our economy and we are aware of the role it can play to keep South Africa safe and stable.

Mr. Speaker, the hon. member for Newton Park introduced a very important motion. As part of my participation in this debate I should like to adopt a slightly different approach to this motion than the one he adopted. The problem with the approach the hon. member for Newton Park adopted to this motion was that he lapsed too easily into details, for example particulars such as the price of fertilizer, the price of wheat, etc. These are things which we can thrash out with one another in an agricultural vote debate. However, when we are dealing with a major subject here, namely the strategic role and value of agriculture for South Africa in Africa and in the world, we should take a broader view of matters, I am afraid, than the hon. member for Newton Park did. The hon. member began quite well by clearly pointing out how exposed rural areas are in times of war and against terrorist onslaughts. I agree with him. This is a military problem to which consideration will certainly have to be given. Even if one were to experience military and terrorist onslaughts on the rural areas of a country—and these must inevitably affect our agricultural production—South Africa’s agriculture would still be in a very strong position, a position of preparedness. Let me mention just one example. Some of our boards, including the Maize Board, maintain a kind of Joseph policy for example. In terms of this policy approximately 10 million bags of maize are carried over annually. In other words, as far as food reserves are concerned, we are reasonably well protected.

This motion recognizes agriculture as an essential strategic resource. It is probably necessary for one to define what one means by the strategic value and strategic role of agricultural produce. Having done that, it is probably extremely important how one is going to utilize agriculture for the security and stability of the country. I agree that this strategic resource is very important, but one could utilize it incorrectly. One could utilize it in such a way that more harm than good was done. Stable growth and development in agriculture is essential, and I now wish to indicate the most important criteria in this regard. In the first place one has to determine what the population growth in South Africa is, in other words how many more people one has to feed annually. In South Africa our population growth—here I am including all the population groups—is 2,6% per annum, which our physical growth in agriculture over a period of 15 years has already been as high as 5% per annum. Therefore we are in a reasonably safe position. We have surpluses. We are prepared, and we could even feed people in times of disruption in agriculture.

What has given special prominence to agriculture, particularly in recent times, as a strategic resource, is the question of the grain contracts which we recently heard America had concluded with Russia. We know what the food position in the world is. As a result of the conference which was held in Rome in 1974, we know that there are many countries in the world that are experiencing problems with food supplies. In fact, the food reserves of the world have dropped to the lowest level in 20 years. During this food conference in Rome a very important analysis was made. It was found that 70% of the world population is living in the so-called developing countries, and that these developing countries are only producing approximately 44% of their food requirements. The remainder of their food requirements they have to obtain from the developed countries, inter alia, from the USA. One of the resolutions adopted at this conference was that attempts should be made to develop the food production potential of these countries further.

America is the country with the greatest agricultural production potential in the world. It is able, for example, to export 60% of its wheat, 50% of its soya bean and 20% of its maize production. At present America is responsible for three-quarters of the world’s grain exports. It therefore has a powerful strategic weapon at its disposal while Russia, with its consumption of more than 200 million tons of grain, is experiencing shortages. During the past two to three years, Russia has only produced approximately 150 or 160 million tons of grain. In the nature of things Russia has therefore to rely on the American production for the food requirements of its people. Russia may perhaps be winning the arms race, but it will always have to look to the Western world for its food supplies. These facts demonstrate the strategic value of agriculture and food in the world.

At present a very interesting debate is being conducted in the USA. It revolves around how the USA should use its so-called “food power’’ as a political and strategic weapon. As example is being used the way in which the oil-producing countries used oil to acquire for themselves a position of power in the economic and industrial world. It is said that the Americans should adopt this same method so that they are able, with their food, to enforce certain rights for themselves, and if necessary, extort them. However, there are vastly different approaches to this question. Some people in the USA do not agree with this. The following, inter alia, is being said—I am quoting from Business Week of 15 December, 1975—

The moment one wants to use food as a means of extortion, one is using a very emotionally-charged strategic weapon, because food meets a very basic requirement of mankind. Some people proceed from the assumption that if America were to use its food in this way, it might be more detrimental to it internationally than its debacle in Vietnam.

South Africa is in a strong position as far as its food is concerned. We are producing more food than our population growth requires. We could easily export between three to four million tons annually, and then negotiate certain political advantages for ourselves in our neighbouring states. We have certain neighbouring states that might have a poor agricultural potential. We could blackmail them with our surplus food, but in my opinion it would be fatal to do so. There is one thing of which we should take thorough cognizance. Africa, and particularly Southern Africa, has an underdeveloped agricultural potential. Here we, as a highly developed country, have a very important role to play. However, I want to qualify the expression “highly developed”. I am not saying now that I shall challenge the hon. member, but there is something I do want to say. He must mention the name of one other country in the world to me, a country with such a limited agricultural potential as that of South Africa, in which almost 90% of the arable land has already been cultivated, a country with our natural conditions, in which only 3,3% of its land is highly productive, which was nevertheless able to have a growth rate of 5%. In some years our growth rate was even as high as 7%. Surely this demonstrates to us that we have some of the best farmers in the world. Surely this demonstrates that in our Department of Agricultural Technical Services, with the assistance which it makes available to agriculture, we definitely have something to give to the world.

We are aware of the political value of food, and we also realize what role it plays in the stability of various nations. In Ethiopia Haile Selassie, who ruled his country for decades and who was generally regarded as one of the strongest leaders in Africa, was eventually overthrown. Why? Because his people did not have enough food to eat. In Africa we have the position that food production is diminishing annually at a rate of 2% per member of the population. In some African countries it is diminishing by as much as 7% per member of the population. This means of course that a future of famine awaits African countries. One asks oneself then whether the time has not arrived for the African countries to begin to realize, in the words of the hon. member for Carletonville yesterday, that they should not allow themselves to be used and abused as revolutionary instruments to achieve communist domination in Africa. Has the time not arrived for them to realize that there are other important priorities which should be taken into consideration? Russia is not even able to feed its own people, but it is supplying certain people in Africa with arms and ammunition. When they have razed everything to the ground, there will be nothing for them to eat. What would this avail the African countries? I think it is in this direction that South Africa can play a major role.

It is essential that we should, in season and out, convey the technical assistance we have at our disposal and the results of the research we have undertaken to African countries through certain organizations, so that they can be helped to help themselves. However, there is something else which is very important, for if we can succeed in developing a common agricultural policy in Africa, and particularly in Southern Africa, such as the one which was developed in the European Economic Community countries, we will achieve a very strategic position. I want to quote a passage to indicate what the policy of the European Economic Community is in respect of agriculture—

Labour is very important to agriculture, and particularly agriculture in Africa, for 80% of the African population is economically active in agriculture. I quote further—

In the EEC this objective has to a very large extent been achieved.

What is of fundamental political and strategic importance is the fact that since 1962—i.e. since the implementation of the EEC idea—an interdependence has developed among the various European states. I, and those of my colleagues who went to investigate the markets there, observed that the Germans cannot at present afford, as in former times, to make war against the French. Potentially Germany is a poor agricultural country. Its agricultural potential is not as high as that of the south of France for example. If the grainlands in the south of France were therefore to be devastated, the people in Germany, and the people in other countries who are also dependent upon that food, would suffer. I believe that if we are able to develop a common agricultural policy in Africa and particularly in Southern Africa, we will be able to develop a similar interdependence on our continent.

In practice peaceful coexistence cannot be better practised than by the very development of a situation of interdependence in the sphere of agriculture. This is in my opinion a matter which is as ripe and ready as can be. It is in particular a matter which we could consider in the light of the détente policy of the hon. the Prime Minister. Certain doors have now been opened to us in Africa, and we must talk to the States in question and acquaint them with our knowledge of the techniques of agriculture, of agricultural production under difficult circumstances. We must help them to develop; we have the necessary knowledge. At the same time we must discuss with them the question of marketing. There are many mouths in Africa that have to be fed. We should not only look to the Whites and to South Africa; we should also look to our neighbouring states and even to other countries and consider their position. We should try to establish, with their assistance, a common agricultural and agricultural marketing policy, so that an interdependence may be developed in that way as well. I believe that if we use our agriculture in this way as a strategic resource, we would be ensuring a great measure of stability for South Africa. We would be doing South Africa a service, not only in respect of the physical production of agriculture, but also in respect of the strategic value of agriculture in a world, which is at present in a very dangerous position.

Mr. Speaker, I find it pleasant to follow the hon. member for Bethal. I think that both speakers made an exceptional contribution to our discussions during this debate this morning. One really cannot but congratulate them. Nevertheless, I think that although the hon. member for Bethal dealt with the strategic importance of our agriculture exceptionally well, he tended to avoid the bottlenecks in agriculture a little. He probably did this because he knows that his party is vulnerable when it comes to these bottlenecks. In his motion the hon. member for Newton Park dealt with them very thoroughly. He sketched the role of agriculture in our strategic set-up and the security of the country very thoroughly. He also pointed out the bottlenecks, and suggested solutions to them. All that is necessary now is for the hon. the Minister to listen to those solutions.

I want to approach this motion from a different point of view, for seen from the strategic point of view, everything which could be said has already been said. I want to approach it from the point of view that if we wish to be secure in our country, we should of course have a strong economy. In my opinion agriculture has made its contribution to the economy of South Africa, for although we contribute only 9% of the national product—this is something with which we are constantly being reproached—we are responsible for between 30% and 40% of the foreign exchange which this country earns by means of exports. That, in itself, makes agriculture a very important industry in South Africa. Hon. members will recall that when we had an exceptionally high growth rate of approximately 7% two years ago it was largely owing to agriculture. It is true that if we have had a good year in agriculture, South Africa finds itself in a good position, but if we have a bad year, South Africa’s economy is in trouble.

There are three sectors on which the entire economy of a country such as ours is built, viz. agriculture, mining and industry. It is only those three sectors which generate capital, which produce something that can be sold. As they say in English, “those sectors produce the cake”. The other people are all living off the cake produced by these three sectors. It is true that other people make an exceptional contribution through the distribution of agricultural produce, etc., but nevertheless these people are living off the cake. They do not bake the cake. It is only industry, mining and agriculture which bake the cake, and therefore these three sectors deserve special treatment in South Africa. And indeed they are receiving special treatment. One thinks for example of the special treatment the gold mines receive when it comes to the low-grade mines. We saw how much money was poured in when Merriespruit was flooded. As far as industry is concerned, there are special import tariffs to protect our industries in South Africa. We also see that a tremendous amount of assistance is being rendered by means of income tax concessions for pre-service and in-service training schemes. The employer may deduct 115%, in other words, if he spends R1 000 on the training of a worker, he may deduct R2 250 for income tax purposes. We also see that industries can obtain inexpensive Industrial Development Corporation loans. It is no more than right and fitting that this should be the case, for those are the capital creating sectors. In view of this it is imperative that agriculture should also be regarded as a special sector which consequently receives special treatment in this country. Indeed, agriculture is more deserving of this than industry and mining. Mr. Chairman, as an employer …

Order! I must point out to the hon. member that the House is not in Committee now.

I am sorry, Mr. Speaker. As an employer, the agricultural sector accommodates 28% of the economically active people in South Africa.

As far as boycotts are concerned, this country is vulnerable, but we can withstand boycotts provided we have food. However, if the country has no food, we cannot withstand boycotts. That is why agriculture is so important. Although South Africa is not a very fertile agricultural country, we have always been able, as the hon. member for Bethal said, to produce, and even export, the necessary food. As the hon. member for Newton Park indicated, agricultural produce comprises 30% of our exports. We are self-sufficient as far as agriculture is concerned. We are importing agricultural commodities to the value of only R50 million, and this consists primarily of tea to the value of R15,2 million and rice to the value of R11,3 million—products which we could easily manage to do without. We are therefore completely self-sufficient in agriculture. Apart from that, agriculture provides this country with extremely cheap food. Our bread is the cheapest in the world. As far as maize is concerned, I want to point out that a maize farmer in South Africa supplies maize to the consumer at approximately R55 per ton; the prices are sometimes a little more or a little less. The world price, on the other hand, is R110 per ton today. The domestic consumption of maize amounts to 5,6 million tons. This means that the maize farmer is subsidizing the consumer to the tune of more than R300 million per annum.

Hear, hear!

I am pleased the hon. the Minister is saying “hear, hear”. That is why I found it so heart-rending to read what the hon. member for Orange Grove, the main speaker of the Progressives on agricultural matters at the time had to say. I see that they now have a new shadow Minister of Agriculture. We shall hear what he has to say this afternoon. I hope he will repudiate what the hon. member for Orange Grove said earlier, viz.—

He was discussing the oil pipelines—

He said this although the maize farmer is subsidizing the consumer to the tune of R300 million per annum. I hope that their new shadow Minister of Agriculture will rectify this matter today.

We should not be too confident. I just want to indicate what the position in agriculture is by mentioning a few figures. A tremendous population increase is taking place, not only in South Africa but throughout the world. The minimum requirement we have in South Africa is that we need 0,08 ha per capita for housing and 0,4 ha per capita for food. This is the minimum we require. As a result of the population increase in South Africa, projections show that in 1980 we will only have 0,54 ha per capita available for food. In 1990 we will have only 0,32 ha per capita for food. This is less than the minimum requirement.

From what are you quoting?

If that hon. member were to read the reports of the food committee of the UNO instead of spending his time in the billiard room, he would also know these things. These figures simply indicate that we will have to give attention to agriculture. We cannot be too confident. The world projection is not much better. That is why Dr. Kissinger had to warn the underdeveloped countries the other day to get away from the idea of “we breed them and you have to feed them”. They will have to produce, and we in South Africa will also have to produce. That is why we shall have to give consideration to the bottlenecks in South Africa.

One of the bottlenecks—the hon. member for Newton Park referred to it—was that agricultural prices were not keeping pace with the prices of agricultural requirements. Nor had they kept pace with the growth in the other sectors. Or rather, the farmer’s income is not keeping pace with the income in the other sectors. In this regard I should like to suggest a plan. The hon. the Minister should examine the Agricultural Prices Stabilization Scheme of Canada, a scheme which they considered in that country last year. Such a scheme would ensure that the farmer receives his fair share of the economy of South Africa. The scheme is in essence a kind of insurance, not for the individual farmer, but for the industry. A farmer pays 2% of his net income, up to a maximum of $500, to a stabilization fund. The Government then contributes to that fund in the ratio of two to one. They then take the average income of a group of farmers in an area in which the same kind of product is being produced. After that they take the average income over the past three years, they take 90% of this amount, and then multiply it by the rate of inflation. Suppose the rate of inflation is 10%. What it amounts to then is that they multiply by 10%. In this way agriculture keeps pace with the rate of inflation. The advantage of such a scheme is that one then has private enterprise within the framework of security. The amount is paid out to the group of farmers, and it is paid out pro rata, according to what they have produced, to the individual farmers. If one farmer has produced less, he is not paid out according to that formula, but pro rata, i.e. according to what he has produced. The money is paid into a pool. One therefore has private enterprise in agriculture within the framework of security. I recommend this scheme to the attention of the hon. the Minister. There are of course other bottlenecks, inter alia, labour, railway rates, estate duty and so on. Unfortunately my time is almost up and other speakers will therefore deal with these matters.

Mr. Speaker, I am going to give a very brief reply to what the hon. member for King William’s Town said. I think it would have been better if he had made the speech he made today, yesterday. His public image would definitely have been better. Today he acted in a more responsible manner.

I should like to mention one aspect on which the hon. member as well as the introducer of the motion dwelt, i.e. the increase in the prices of agricultural produce. I should like just one member of the Opposition to tell us why the price of agricultural land in this country keeps on going up and never down. They should tell us why the price of agricultural land has risen far beyond its agricultural value, if agriculture is unprofitable. It would be responsible of them if, in common with us, they would warn the agricultural sector against the unprofitable prices which are being paid for agricultural land today. I think it is necessary for a responsible body such as this to direct a timely warning to our farmers in this regard.

I want to deal with only one aspect of the motion, and this concerns production as well as production guidance and production research. I should like to sketch the very important role played by the Department of Agricultural Technical Services in the expansion of production in this country, and to refer to the valuable services and technical advice which is being made available to other countries, including countries in Africa. I want to try, by means of an evaluation of the activities of the Department of Agricultural Technical Services, to prove to this hon. House that what has been requested in this motion, is already being done in this country.

The object of the Department of Agricultural Technical Services is systematic agricultural development on a national basis which, in its turn, is aimed at optimal soil conservation and the protection of the natural agricultural resources. This policy encompasses three main principles. Firstly, agricultural production should take place in harmony with the natural environmental factors; secondly, agricultural production should not be engaged in at the expense of the agricultural resources; and thirdly, agricultural production should be economical for the entrepreneur.

To best carry out this policy, the department has been divided into four main branches, namely agricultural research, extension and information, training and controlled services. I maintain that no extension service or information service can function properly without having access to and being supported by sound basic and applied research. On the other hand, the advancement of agriculture requires an increasing measure of scientific understanding of the basic problems and the technological knowledge necessary to solve them. By means of research, a path must be found along which agriculture may develop, and through research the manner in which that path should be followed, must also be indicated.

To help it in its research and in the determination of priorities, the department has very successfully expanded a system of advisory research committees for the benefit of several production directions during the past years. Today there are already approximately 24 of these advisory committees, on which dedicated experts and knowledgeable agriculturalists are serving. In addition the research programme of the department is carried out by 10 research institutes. These institutes are engaged in specialized research in respect of certain disciplines and tasks, and the production of specific products.

Besides the 10 institutes, there is also the Institute for Field Husbandly and Grazing, which is not itself engaged in research, but merely directs researchers in the determination of priorities and co-ordinates in the above-mentioned context. Apart from this, each of the seven regional offices and South West Africa has a research team which, apart from their task of undertaking applied research in the particular region, are also responsible for supplying the agricultural colleges with training services. Time does not allow me to discuss this aspect. What I want to emphasize, however, is the fact that enough facilities exist to cover every possible agricultural commodity. There is sufficient co-ordination. Each ecological region is properly served and there is good interaction between researchers, extension officers and producers.

Now we come to the extension and information services. I maintain that the agricultural extension services of the department have developed over the years into a comprehensive service, which reaches to each separate small part of our country and that together with the information services of the department it forms the cornerstone of liaison with the farmers. The service is provided on a regional basis and for this purpose the Republic has been organized into seven regions. South West Africa forms the eighth region. In addition each region has been divided into four to seven sub-regions and each sub-region into wards.

Another important service provided by the department to agriculture, is training. The most important is of course the training provided in our six agricultural colleges—perhaps this will one day be seven, when the college at Nelspruit is opened—with their two-year diploma courses. Over and above this task, informal training of the farmers is always taking place. This is extremely valuable and takes place with the aid of farmers’ days, short courses, etc. Continuous in-service training and refresher courses are also given to its officials by the department so that they can keep up with the latest knowledge in their particular disciplines.

Another important service is the control service. This consists of three organizations, namely the Division of Soil Protection, the Division of Plant and Seed Control and the Division of Veterinary Services. The achievements of the department are unequalled. Unfortunately time does not allow me to deal with this in detail. I shall content myself with mentioning only the breeding programmes for field husbandry and horticultural products and the creation of new varieties. Furthermore I also refer to Onderstepoort, which set up a new record in 1974-’75 by manufacturing 170 doses of 40 different vaccines. Onderstepoort is, of course, known to be one of the most authoritative veterinary institutes in the world. There was also the development of a white-wool mutton breed sheep, and the stock reduction scheme which has brought about new schools of thought in the extensive small stock areas. These are merely a few of the outstanding achievements of the department.

Fortunately the Department of Agricultural Technical Services has had a very good partner in carrying out its task, namely the South African farmer. I want to agree with previous speakers who said that in this country today we are blessed with the best farmers in the world. I have had the privilege to see how agriculture is practised in many agricultural countries. I take my hat off to the South African farmer when I consider the conditions under which he has to produce here. The department has succeeded in winning the confidence of most of the farmers. Whereas the visit of a departmental official was previously regarded as a nuisance, he is welcomed today and is hardly able to comply with all the requests which are made to him. There is an interaction, a cross-pollination, and slowly but surely science is sinking in and is being applied on practically every farm in the Republic. I do not want to elaborate on the assistance which we give to other countries, especially Africa countries, and our cooperation with them. In these days of political unrest one does not want to create unnecessary embarrassment. However, I want to say that we would like to share our knowledge on the agricultural level with other countries, as has often been said by the hon. the Minister. The Department of Agricultural Technical Services already provides comprehensive service on an international level. Indeed, statistics gained from reciprocal visits and correspondence even from behind the Iron Curtain is sufficient proof for me that our knowledge is much sought after in the world. The department is a member of approximately 15 international agricultural organizations in which it plays a very active role. Its contribution in Sarccus is of immeasurable value for our country.

I want to sketch briefly the role of agriculture in the South African national economy. The primary task of the South African agriculturalist is the provision of food for our internal population. However, agriculture is also an important provider of raw materials to the secondary industry and in the third place, through its export trade, agriculture has been a very important earner of foreign exchange. In spite of its limited natural resources, the industry has so far succeeded extremely well in its threefold task. Through the application of modem production methods and the increasing use of mechanical aids, the farming industry, with a few exceptions, has succeeded in providing the rapidly increasing population with sufficient food and also having surpluses available for export. This is no mean achievement if it is borne in mind that the South African population growth rate of 2,6% per annum is one of the highest in the world. The volume of field husbandry production in the year 1974-’75 was in fact 111% greater than 15 years ago, while horticultural production increased by 87% and stock production by 37% during the same period. The total increase in food production during this period was 80%, while non-food production increased by 58%. The total population consists at present of approximately 25 million people and according to projections it will double by the end of the century and by the year 2020 will have increased to more than 81 million. If the changing eating habits of the bulk of the population, that is the change to high protein food, together with the population explosion, is taken into account, it is clear that food production in the Republic will have to be at least doubled within the next 25 years and within the next 20 years, more than the present production will have to be added to that doubled production. Experts are still optimistic that it will be possible to meet the increasing demand, but then our high potential soils, which cover only a meagre 3,5 million hectare and of which a large percentage are situated in the homelands, will then have to be utilized to a far better extent. It has been established that up till now the homelands have produced only a seventh of the production which was obtained on comparable land in the Republic.

Besides the role of agriculture as a provider of food, however, it is less well known what a large percentage of secondary industries are dependent on the existence of agricultural production. Approximately 33% of all industrial undertakings in the country make use of raw materials which are provided by agriculture, forestry and the fishing industry. This group of industries employs approximately a quarter million workers—almost a third of all employees in industry. Agriculture’s provision of raw materials to industry has increased considerably in recent times. Last year no less than 60% of the total agricultural production was taken up by industries, while industries which process food, took up more than 80% of this production. This is the second most important group in the manufacturing industry and provides 12½% of the total industrial production in the Republic. Owing to these facts it is generally accepted by experts that agricultural development in our country is still a prerequisite to industrial development. The pace at which industrial development takes place, is largely determined by the pace at which agricultural development takes place.

The third primary achievement by agriculture is its earnings in foreign exchange. During the six-year period until the end of 1974, the industry had earned almost R4 milliard from overseas markets. This was an amount which was sufficient to pay for more than half of our capital equipment imported during that period. Last year alone our agricultural exports reached the R1,2 milliard mark. Profits from agricultural exports at present contribute 30% to the country’s total income from exports, excluding gold of course.

I want to refer to a last important role played by agriculture in the South African economy and one which must never be overlooked. This is that it is still the largest single provider of labour in the economically active section of the population, i.e. approximately 30%. I think that everyone will agree with me that this is truly an impressive achievement, especially when our changing natural conditions and limited natural resources are taken into consideration.

Today, without fear of contradiction, I wish to maintain that our agriculturalists, together with our departments of agriculture, are ideally equipped to deal with this challenge before us, and are ideally equipped not only to feed and clothe our people, but to make sufficient agricultural products available to utilize them in the strategy of our country.

Mr. Speaker, the motion introduced by the hon. member for Newton Park reads: “That this House is deeply conscious of the important and strategic role that the agricultural industry has to play in our national economy and the continued security of the country.” What the hon. member for Newton Park is in fact saying is that we must examine the capability of agriculture in South Africa to provide the necessary food for South Africa’s expanding population over the years that lie ahead and to continue to be able to provide that food in order to prevent the disastrous socio-economic and political results that will flow from the situation if South Africa’s agriculture should fail in this respect. This is the experience of many countries in the world where sociopolitical disorders and revolutions have been heavily influenced, if not primarily influenced, by the failure of those countries to provide, via their agriculture, for the rising expectations and the demand for food and other services of its population. I am a friend of the Department of Agriculture and of the hon. the Minister and of the farmers. [Interjections.] I and my party are sympathetic towards and friends of the farmers of South Africa. We have many supporters in the agricultural sector and many representatives of our party at various levels of our organization in South Africa are connected with that sector.

Many of the aspects which are important to this debate have been effectively handled this morning. I would like to work towards a particular aspect and I want to start off by saying that I think one of the most important things that we in South Africa have to do is to put the Department of Agriculture and the practice of agriculture in the correct perspective and to relate it correctly to the other aspects of our national life. There is a very unfortunate lack of appreciation and understanding of agriculture by the vast mass of the population of South Africa, particularly the people who live in the cities. I think that a great deal of work can be done in this field to develop a correct and fruitful appreciation of agriculture and what it means to the country in terms of its economy, its life and its security.

I firstly want to say that agriculture is a primary industry. It is not some vague thing which involves only the farmers of the country. It is a primary industry of fundamental importance and significance to the country, unlike most other industries which mainly provide for the higher standards of material life of man. All the other industries are in fact aimed at providing higher standards of material life for man, in other words to improve his standard of living. There is nothing wrong with that and that is very important, but agriculture is the industry which provides for life itself as far as the people of the country are concerned. Agriculture is the primary industry which provides for life itself. It is in fact a matter of life or death for every man, woman and child in every country of the world. It is something which is occupying the minds and the thinking, not only of nations, but of the world as a whole, of United Nations institutions and of various other important organizations which have been established for this purpose.

The provision of food and the needs which apply in this field are almost directly proportional to the expanding and exploding population growth of the world. Two thousand years ago the world had only 200 million people. By 1850 this figure had increased to 1 000 million people, by 1930 to 2 000 million people, by 1975 to 4 000 million people and by the year 2000 it is predicted that the world will have to feed 7 000 million people. The population of the world is exploding; it is increasing according to an exponential rate of growth. The question which arises here is whether the world and its agriculture has any hope whatsoever of meeting that population growth in terms of food that has to be produced and provided throughout the world. There are many people who are saying that it is not possible and who are predicting the most dire consequences if agriculture should fail to provide those food requirements. A very interesting book which appeared recently dealt with a study that was made by the International Planned Parenthood Federation and indicated that in the developed countries the increase in the production of food and the per capita production of food were increasing at the same rate, but that in the developing countries, although the rate of production of food was increasing very fast, particularly as a result of the efforts of the developed countries in those countries, there is practically no increase in terms of the per capita production of food. Since 1973 the per capita production of food in most of the developing countries of the world has taken a disastrous plunge which has resulted in wide-spread famine throughout these countries. Agriculture is the only industry which produces all the primary food to sustain all human life on earth and that is what makes it one of the most vital and important aspects of our life. Agriculture should be seen as the most vital aspect of the utilization and the preservation of the environment. The nation must be informed and motivated to understand and appreciate the relationship between agriculture and man’s survival and his well-being on earth. This can only be done, provided the Department and the Government project a dramatic and compelling presentation of agriculture through an environmental perspective and its significance to man. Many of the other aspects such as research, financing, agricultural efficiency and productivity have been dealt with and they are all very important and very significant. South Africa has made tremendous contributions to the world in terms of these aspects. If you travel in various parts of the world you find that apart from Gary Player and Chris Barnard, places like Onderstepoort and other agricultural departments and places where agricultural activities take place in South Africa, are equally well known. In Atlanta, Georgia, I found that Gary Player and Onderstepoort were for instance the only two aspects of South African life which were well known by many of the people in the legislature of that State.

I want to deal with one of the most important aspects of agriculture and one which is vital as far as the subject which we are discussing this morning is concerned, and that is the conservation of the soil. In 1971 Dr. Pentzhorn said that the Republic had 102 million ha suitable for agricultural purposes, of which only 15,3 million ha were suitable for ploughing. Of this 15,3 million ha, 4 million ha have already been destroyed by soil erosion. Jackson White, who wrote the book The Rape of the Earth, recorded that more soil has been lost from the surface of the earth since 1914 than in all previous human history. He commented that in South Africa the destruction of the soil was the worst observed anywhere in the world and that it would, in due course, lead to a national catastrophe. In South Africa, in particular, it was a tragedy in view of the appalling rapidity with which soil erosion followed inconsiderate farming. I am speaking on behalf of the good, considerate and intelligent farmer of South Africa and I may be very critical of the farmer in South Africa who is not using his land intelligently and who is not considerate and responsible in the use of his land. Dr. Kai Curry-Lindahl, Unesco’s famous Swedish biologist and conservationist, records that during the past century water and wind erosion has destroyed an estimated 2 033 million ha of soil in various parts of the world, and that represents 25% of all the usable farm land in the world. Our own Mr. J. C. Ross has stated that in South Africa at least 25% of our original fertile soil has been destroyed. James Clark, one of South Africa’s foremost and best informed environmental scientists, states that it takes nature 6 000 years to produce a ploughable layer of soil from rock. It must be taken into consideration that what it takes nature 6 000 years to produce, we are destroying in a matter of a few years. When Dr. Kokot compared water resources with land and soil resources in 1972, he said: “Water is a resource which is annually renewed, but lost topsoil needs geological ages to be renewed.’’ At the present rate of soil erosion—and this is a fact and not an opinion, a scientific fact which has been deduced by extrapolation—South Africa will lose all its topsoil by the year 2050.

Somebody could say to me that that is not true and that it may be only 85% or 90%, but in effect, at the present rate of the destruction of our topsoil, we may have lost virtually all our topsoil by the year 2050. John Adcock stated in 1966 that the country’s stock-carrying capacity, i.e. its animal protein production capacity—and South Africa’s meat production only goes up by 1,5% per annum—has been reduced by 75% of its original potential. Erlich has said—and this is one of the points I want to make—that while in 1882 9,4% of the earth was desert, by 1952 23% of the earth had become desert. John Adcock records that overgrazing has been the main cause of the Karroo’s 290 km advance since the beginning of the century. In May 1973 the earth resources technology satellite showed that since 1953 the Karroo had advanced a further 70 km on to our grasslands. I think these are all exceptionally shocking statistics, which we should take into consideration. Prof. Midgeley of the University of the Witwatersrand has stated—and many people contest this figure, but he has given it on sound scientific grounds—that 400 million tons of our topsoil is being washed away annually. J. C. Ross said that that was equivalent to a six-inch layer of topsoil over 125 000 morgen. T. C. Robertson said that it was the ploughable soil of ten big farms, each of 1 000 ha. Do you know, Sir, it is estimated that the Hendrik Verwoerd Dam will be filled with silt over the course of the next 50 years.

What has been done by the Government and by South Africa as a whole? It is not only the Government’s responsibility. It is the responsibility of South Africa as a whole to maintain and protect this most vital, most important and most valuable natural resource. It is more valuable than any of the other natural resources, because when the gold mines and all the other mines in South Africa have been exhausted, the natural resources of the soil must still be in a fit state to produce the food which is required to keep our people alive.

In 1946 the Soil Conservation Act was passed and in 1969 a further Act was passed. Heavy fines and prison sentences were provided for, but these have never really been properly applied in order to assist in the combating of soil erosion. T. C. Robertson concludes that persuasion, propaganda and education have failed to stem the tide of destruction, and he warned that we were living off the soil capital of our country. He said that errant farmers were in fact guilty of a very serious crime.

In 1971 Dr. S. J. du Plessis said that the 1946 Act had had no influence at all on soil erosion. He accused bad farmers of being guilty of treasonable activities.

*I quote what Dr. Serfontein, director of the Division of Soil Protection, said about this same matter recently (translation)—

Now, 30 years after this 1946 legislation was put into operation, the director of the Division of Soil Protection finds it necessary to say—

In most cases the primary principles of soil conservation are hot being adhered to. I think it is a very serious matter if Dr. Serfontein has to say this kind of thing. I also think that urgent attention should be given to this matter.

†What can be done about it? Mr. Speaker, the hon. the Minister agrees with me that this is true, that what I have been saying is true. It is generally agreed that it is true. It is not a political matter. It is a matter that is of absolute importance to everybody in this country. The hon. the Minister agrees that what the officials of his department say, is true. It is not only his department and it is not only Dr. Serfontein who say these things. The same comments have been made by Dr. D. W. Immelman, Deputy Secretary of the Department of Agricultural Technical Services. If what all these officials and all these scientists are saying is true, I think it is time that this country takes note of the situation, that the Government treats the situation with the necessary urgency and determination and that steps are taken to save this nation from this disaster which is descending on us.

Mr. Speaker, I think the following should be done. We must take urgent, drastic and immediate steps to stop this situation. We must elevate the preservation and the conservation of the environment to a major discipline within the Government. It should have the responsibility and the functions of a coordinator and a controller of all these other activities, of which agriculture must form a major part. I think, Sir, that it may be necessary to scrap the existing legislation and bring in effective new legislation for environmental conservation, of which soil conservation will be a major function. Sir, this Government is prepared to spend vast sums of money to combat soil erosion, but what they have been spending up to the moment is a pittance as against what is required. I think it is time that South Africa should be reorientated to a national awareness by a vigorous and dramatic programme of education which should be introduced. The whole nation must become conscious of the urgency of this task. In respect of the homelands, too, the Third World which the hon. member for Carletonville spoke about, which is developing around and within us, I believe that an effective multi-racial and multi-national organization should be created to direct and control a comprehensive crash programme in respect of these matters for all of South Africa. The neighbouring States and the homelands and any other countries which form part of the southern African complex should be involved. How many training officers are provided in the homelands in order to combat soil erosion? How many people are trained there? Is it a fundamental aspect of the education of people in the homelands? We must get the job done now, Mr. Speaker, or we must accept responsibility for the total destruction eventually of the habitat of man in South Africa, and that will be a responsibility which will lie primarily on the shoulders of the Government, because they are the authority in the country, and also on the shoulders of the South African nation as a whole.

Mr. Speaker, where the hon. member for Bryanston said at the beginning of his speech that there was not enough appreciation in South Africa for agriculture and for the Department of Agriculture, I want to agree with him. However, if the hon. member for Bryanston shares the fear of the learned person to whom he referred, who alleged that theoretically speaking, South Africa’s farming soil will have disappeared completely by the year 2050, I can give him this reassurance. I do not think the hon. member for Bryanston and his party know the spirit of the farmer of South Africa. Nor do I think that hon. member knows the quality of our Department of Agricultural Technical Services. I can give him the assurance, too, that never in the history of South Africa has so much been done, so much been spent and so much research been undertaken to establish and develop soil conservation in South Africa as at the present time. But not only do we in South Africa show a lack of appreciation for the agriculturist and the agricultural producer and our department; I think there is also insufficient recognition in South Africa of the strategic role which agriculture played in South Africa in the past; because many doors in Africa which have been open to South Africa have in fact been opened by the agriculturist.

Similarly, doors in South Africa are open to technicians from other countries who want to come and see how the work is done in South Africa. Sir, when we allege here today, as has been alleged by some of the members, that there is probably no better farmer in the world than the South African farmer, then these are not just hollow, idle words in praise of a small group of people in a particular occupation in South Africa; they are confirmed by the comments of other people. Sir Henry Plumb, the president of the National Farmers’ Union in Britain, recently visited South Africa, and in his parting speech this very gifted man said that from the nature of his work he came into contact with some of the best farmers in the world, but that he had never found any better farmers than those in South Africa. A well-known French banker visited South Africa three years ago with instructions to conduct certain investigations in South Africa, and when he departed, he told our then Minister of Finance, our present State President, that if he were to categorize the farmers with whom he had had dealings in the world, then he would place among the first five two groups of farmers in South Africa, those in the Boland and those in the Eastern Free State.

We must make use of this opportunity to pay tribute to all the farmers in South Africa, as well as to the Department of Agricultural Technical Services and to the Department of Agricultural Economics and Marketing. I also want to make use of the opportunity to thank our previous and our present Ministry for the development there has been in agriculture in South Africa. When we speak of the strategic value of agriculture and of food, we cannot help remembering that one of the first instructions we received was to till the soil. Those of us who were calm enough to listen to the marriage service will remember that it also says there should be something to give to the poor. We in South Africa are fortunate in not having known want for many decades. We in South Africa are fortunate in having been able for several years to give or sell goods to other countries which are in want. Over the last few years it has become increasingly clear that the strategic value of food and agriculture has become a popular point of discussion all over the world. Not only in South Africa, but all over the world, people must be careful not to allow the production and availability of food to be made a political bargaining factor in negotiations between nations.

When we look at the circumstances in the United States of America, I suppose that no one could deny that that country with its almost inexhaustible riches has been able to finance a large part of its development with the money obtained from the agricultural products it sold. I do not think the American was much mistaken who said that it was in fact food which had paid to have an American walk on the moon. The part which America plays in international politics today can also be related to a large degree to the part it plays in respect of the provision of food. In an investigation conducted by a certain Dr. R. L. Sandor, the chief economist of the Chicago Board of Trade, the following very interesting statistics emerged. The world exports of wheat rose from 26,5 million tons in the early fifties to 74,4 million tons in 1973, fodder grain rose from approximately 15 million tons to 75 million tons and maize and maize products showed an increase of 1,5 million to 40,3 million tons. After this man had made certain comparisons, he came to realize that the United States of America was presently exporting the products of one out of every four harvested hectares. This amounts to 34,4 million hectares which the United States of America can use for providing food to the world. Dr. Sandor then undertook a further investigation. He made a sample of 32 countries. He reduced to one single item the various foodstuffs exported to these countries from America. However, the assumptions he had to make were very conservative. He found that 28% of the people of Peru, 35% of the people of Venezuela, 17% of the people of Norway, 63% of the people of Israel, 36% of the people of Korea, 40% of the people of Taiwan and 53% of the people of Japan were fed by food from America. With this powerful weapon in America’s hands today, one would expect this country to be regarded as one of the prominent powers, not only of the West, but of the whole world. And in many cases the world does respect America as one of the leaders today.

However, considering these resources which it has available, one would expect to be able to say categorically that America is the most prominent country in the world. But if we look today at America and its image in the world, we realize that the strategic strength of a country is not determined only by the availability of food, which can also be used in diplomatic negotiations. However, I shall come back to that. When I look at the achievements in the United States of America, I think that we in South Africa also have the right to be proud of what we have achieved up to now. That is why I feel free to pay tribute to the Department of Agricultural Technical Services, and to thank the present and previous Ministries.

When one looks at the population increase of 2,6% a year and one considers our limited resources—last year, reference was made in a motion to the shocking lack of potential for further expansion of agricultural land with a high potential—one realizes that it has in fact been an achievement for us to be able to provide enough food for 25 million inhabitants. But, Sir, we did not only provide enough for the 25 million inhabitants. As a result of this stable growth—something which is advocated in this motion, and which according to our contention is already established in South Africa—South Africa has also been able to export 29% of its maize products, 42% of its sugar, 45% of its citrus products, 38% of our deciduous fruit and eating grapes, 79% of our peanuts, 15% of our butter and 7% of our eggs. In the small number of cases where we are not self-sufficient, products such as coffee, tea, cocoa beans and other less important products are imported. However, when we look at the strategic importance of our agriculture, we must not ask in South Africa today how we can feed the world and this continent in the future. The responsibility of the hon. the Minister and of the department is first of all towards us, the population of South Africa. When one looks at the projections that are made, in which it is alleged that in 1985 South Africa is going to break even as far as its grains are concerned, one realizes that the strategic role which South Africa can play in the field of agriculture lies rather in making other countries self-sufficient. Consequently we have every reason to expect that the future will bring continued development along the course which has already been taken by agriculture in South Africa.

The hon. member for Bethal referred to the value of the EEC. I think that we in southern Africa also find ourselves on the eve of development in that direction. When one looks at the Treaty of Rome, which established the EEC in Europe, one notices that there are 19 fields in which these countries have tried to co-operate. Today, after several years have elapsed, there has only been progress in one field, and that is agriculture. For that reason the hon. member for Heilbron had reason to remark, when we conducted investigations in Brussels: “These countries cannot afford to wage war on each other.” I believe that we in South Africa will not only have to take the lead in stabilizing and implementing a common agricultural marketing policy or pattern in southern Africa, and subsequently in countries further to the north; we shall also have to go further in an attempt to stabilize and implement a common agricultural production pattern for southern Africa, and subsequently for countries further to the north. We are grateful for the work which is already being done by Sarccus. There are several countries that are making use of South Africa’s skills, and several countries that are making use of the invitation issued by this department in the past.

However, there are fields to which we shall have to give attention in South Africa. Over the years we have developed a system in South Africa in terms of which the South African farmer and the various departments were ready to combat droughts. Perhaps the last few years have shown us that we shall have to give more attention to circumstances which may cause flood damage. When we have succeeded in South Africa in working out schemes for combating this flood damage and in implementing them in practice, we shall be able to share that knowledge with countries in Africa and elsewhere.

Finally, I want to say that there is one very important facet which we dare not forget. I have already said that the United States of America, with its powerful resources, could have been regarded today as the leader, not only of the West, but of the world, because it has the strategic potential for this. However, this goes to show us that the strategic power of a people does not lie only in the availability of food. For that reason we in South Africa dare not forget that in spite of the fact that we have food, and that we are likely to produce more of it in the future, we must go on looking for our strategic strength and developing it in our people; that we must make the food available not only to the scientist, the researcher, the worker, the farmer and the soldier, but that we shall have to keep on ensuring in South Africa that the relationship with the soil gives people something to make them strategically strong when they are threatened. The fact is that nothing binds a person more closely to his people and to his country than that relationship with the soil. We in South Africa shall have to guard against the danger of neglecting this relationship with our soil.

Another important point is that we shall have to ensure that we do not disregard one of the oldest rules of nature. One of the oldest rules is that man must work for his food. Naturally, development has meant that not everyone can be a producer of food, and that there are other occupations which have to be filled, but then we must remember in South Africa that those who do not produce food will pay for it. We in South Africa shall have to guard against the danger of becoming a welfare state where food is made so cheap that people lose their respect and appreciation for our food. May we realize in future that food is strategically important, but that the matter does not end there. The person in South Africa, as well the person higher up in the continent, must realize that although the food is available, that food has a price—either labour or money. When we produce in the future and when we make our contribution in the future towards combating inflation and keeping the cost of living as low as possible, we shall also have to guard against making food so cheap that the standard of living will rise in respect of luxuries and unnecessary things. Let us realize our responsibility in respect of food, and let there be appreciation for what is being done in South Africa to keep our position stable and to make us strategically strong, bearing in mind what I have said.

Mr. Speaker, I wholeheartedly agree with what has been said this morning by hon. members. I believe that hon. members have made very good contributions towards this debate this morning, which deals with a very important subject. The hon. member for Graaff-Reinet wanted to know from us on this side of the House why the price of agricultural land continues to rise. Sir, I do not know of any land or houses or agricultural land in respect of which the price has fallen during the previous few years. On the contrary, the prices continue to rise.

†My answer to the hon. member for Graaff-Reinet is that I can think of three reasons why the prices of agricultural land are continuously rising. The first is, of course, inflation and that we all accept. The second reason is that with the consolidation of land for the Bantu in terms of the 1936 Act much of our productive land has been handed over to the Bantu and has eventually gone out of production today. It is a case of supply and demand and today there is more land in demand than there was before. We heard about it a day or two ago from hon. members on this side. There are farmers who have to purchase other land in place of the land which the Government is now taking over from them. The third reason I can think of is that there are many of our agricultural units that are hopelessly overcapitalized. In many cases the farmer does not have a hope of getting his money back out of that unit. Many farmers are hopelessly in debt. They are carrying heavy bonds on their units. They can never under any circumstances sell their properties for prices that are higher than their bonds plus interest. In many cases interest in arrears also has to be paid. These are the three reasons I can think of offhand.

Economics is the strongest instrument of power we know of today. This has already been mentioned so often during this session. A strong economy is derived from stability. Stability is a must for both the producer and the consumer. It is something that everyone in South Africa desires, but it is not easily attainable, particularly in the farming industry. It is not easily attainable in the consumption and production of our foodstuffs. Everyone wants stability. Every agriculturist craves for stability. It is something we all desire and something we have been working for years. Security, we know, is a nice word, but we must realize that it goes together with a strong economy and stability. At the same time we have inflation. There is only one way in which inflation can be arrested, and that is by increased productivity. How do we increase productivity in the agricultural industry? We know that devaluation has increased the price of our export produce, but by the same token it has greatly increased the cost of production in agriculture. It has greatly increased the cost of imported machinery. It has also increased the cost of fuel and all lubricants, which are a must in the industry. Furthermore, devaluation has greatly increased the cost of repairs to farming machinery. We are passing through an era in which increased production is a must. There is an ever-increasing demand for food. The 25 million people in South Africa today—I am not talking of tomorrow or the turn of the century—enjoy the best living standards in Africa. However, our agricultural industry is going to be stretched to the limit. We see and know of the thousands upon thousands of refugees flocking to safety over our borders. Why are they flocking over our borders? Mainly because they are starving. One has only to look at the people to see how undernourished they are. They know full well that if they have to stay where they are, they will starve to death. They look to us for food, and our farming industry will have to provide the ever-increasing amount of food required. Not only do we have to provide food for the refugees, but we must also provide good wholesome food for our Army. Our increasing population must also be catered for.

Naturally, we have our problems. We realize what our commitments are, but due for instance to the extraordinarily high rainfall we are having at the moment, we are experiencing certain problems. The Wheat Board and the consumers are concerned about the serious damage to our grain crops. Wherever one goes, one hears of the crops having been damaged. Wheat fields, barley fields and maize fields have been flooded as a result of the heavy rain. The delivery of damaged wheat and grain to our mills and elevators is causing endless problems as well. We see that Russia has had a very bad wheat crop, but I am afraid that the prospects in South Africa for a good wheat crop are not encouraging either.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, I was interested to hear the speech of the hon. member for Bryanston on the motion of the hon. member for Newton Park, before business was suspended for lunch. He gave us many quotations and he mentioned the source of his quotations. At other times he did not mention quotations at all, but appeared to be reading his speech from one end to the other, and if he was not reading it, I assumed he could only have received the rest of the information from mink and manure.

What are those notes there?

I was talking about the shortage of labour and the problems facing industry when we suspended business for lunch. Labour is one of the serious problems facing industry today as regards productivity and production. I mentioned that farm labour was becoming more and more scarce and we could not account for this fact. There was a time when many of us had too many labourers on our farms and we had problems in disposing of some of them. Today the position is the reverse. Where they are all going to, we do not know. We realize that this will result in poor management and will of course reduce production. I am reminded of that beautiful song which a notorious Frenchman sang called “Thank heaven for little girls”.

Hear, hear!

Why was he notorious? That was a nasty thing to say.

One thing we learned from that, and this was during the Second World War, is that our South African women can play a very important role in agriculture. For one thing, I do believe that our women are more methodical than most men. They are more meticulous, they are more businesslike and they have the ability to conserve. Our women have taught us one thing, namely that it is not the money you make which brings wealth, but the money you save. This fact was very marked during the last war. Many of our farmers had to leave the land and do their bit during the war years, leaving their farms to the sole care of their women, their wives.

And the Bantu.

Yes, the Bantu, but under the control of the women. It was interesting to see that when many farmers returned to their farms after the war, their wives were able to show them a balance sheet free of debt and what is more, some of them had even paid off their bonds or at least reduced them. This has taught us that we should concentrate more on our womenfolk at playing their part in this very important industry, agriculture. In fact we must capitalize on this. Our women are very practical—I have mentioned all the other good points—and we must go out of our way to encourage women to come into the industry. We have very good financial institutions. I know of none better. We have the Department of Agricultural Credit and Land Tenure, which is at the disposal of the industry, and we have the Land Bank. These are two fine institutions. We have mentioned the large amounts of money being spent on defence, and quite rightly so. I will not say that money on defence would be wasted, but we will not receive the full benefit of the money being spent on defence unless we can provide the essentials, namely good food for our Defence Force and for the nation. I make an appeal to the hon. the Minister to do his best with the hon. the Minister of Finance during the next Budget to make more money available for investment in agriculture through the Department of Agricultural Credit and Land Tenure and the Land Bank. The hon. the Minister knows that these two institutions need the money very badly. If we can obtain a substantial amount from the hon. the Minister of Finance through the budget, it will assist agriculture in South Africa tremendously.

Mr. Speaker, earlier today we had a very interesting debate which ranged over a wide field, and it was interesting to see what degree of consensus was achieved on some of the major issues confronting South Africa today, challenges which we will have to deal with in the future. These are issues which can inherently influence the position of the White Western civilization here in South Africa, questions such as increased oil prices, inflation and the tremendous increase in South Africa’s population, an increase which is accelerating to such an extent that it is gaining on us in spite of the increased production by the farmers. This is a problem as old as the world itself. 2 000 years ago Aristotle said that a nation without birth control was doomed to poverty, revolution and terrorism. And therefore, in my opinion, these two issues are very closely connected: To provide sufficient food for South Africa in the future and our tremendous population explosion here in South Africa. The farmer has played his part very well during the past few years bý means of increased production, by getting more from the soil, by making use of the scientific knowledge which is available. But there is still that great problem of an ever-increasing population, which gradually will overtake those basic natural resources which South Africa has at its disposal. This is one of the most important points to which we will definitely have to give consideration, and which is very closely linked to this matter. The other extremely great challenge which we considered, is that we must be strong in order to withstand the onslaughts of communism here in Southern Africa. We see in today’s newspapers the problem of the 250 000 refugees on our borders who are looking to South Africa to be fed. In this year of floods and water-logged crops, problems exist which South Africa will have to face not only this year, but in the coming years as well. Food is power. A country which is economically sound and which can feed itself and be independent as far as the importing of food is concerned, is a country which possesses one of the most powerful weapons with which to confront the issues of the future. As an ordinary farmer, there is a serious problem which I often find disturbing. When I drive to the Northern Transvaal, I always find it disturbing to see how many unoccupied farms there are on both sides of the road. These are farms which have been ruined by bush encroachment. One sees hook-thorns for miles and miles and beautifully aloes in bloom, but very little or no cattle. If one goes further, into the Waterberg, one sees houses which are falling into disrepair, broken fences and grass this high at the end of the growing season. There are no cattle or sheep to graze on that grass. I can tell you there are many of those farms where there is not a soul at home, not even a non-White. Every year we have the phenomenon that after the first frost the veld fires start and then that beautiful grass, which should really have been served up at the tables of our city dwellers in the form of red meat, is destroyed. Every year the grass is razed to the ground. I should like to know why there are so many empty farms throughout South Africa. Most of them are in fact to be found in the marginal areas, where the land is sour and farming conditions difficult, but the problem is far more serious than this. The problem is serious in the first place because it reduces our production capacity and secondly, it makes us more vulnerable to terrorism and irresponsible elements. We had the case in the Waterberg where a few cattle thieves grazed 25 head of cattle on this farm and on other farms for a month, until they made the mistake of trying to market the animals. Then they were caught by the police of Naboomspruit. They wandered around for more than a month on these farms with 25 head of cattle. This is a serious problem, and I feel that it is essential that we investigate the matter.

The reasons for these unoccupied farms can firstly be due to the fact that some of these farms have been allocated for the consolidation of the Bantu homelands. Many of these farms are also unoccupied because the owners simply cannot keep their heads above water. They have struggled, they have ploughed and planted, but as a result of one bad harvest after the other when they tried to cultivate grain, they finally reached a point where they were unable to get the next crop planted. They were simply unable to afford it. They took out mortgages on their farms and many of them are today sitting in the towns trying to pay the interest on those mortgages from their earnings. These are circumstances which have an adverse effect on our food production and I am convinced of the fact that if we had provided a better education, many of those young farmers would still be active farmers today. Their problem is not that they are lazy, because I have seen some of them working from the early hours until late at night. But I believe that they do not always have the knowledge to know which type of farming to apply in that particular region. This is becoming a serious problem in large areas of South Africa, and if we are striving to achieve a goal of maximum production, i.e. to provide as much food as possible without veld deterioration and soil erosion, we will have to do something about this serious problem.

Mr. Speaker, the hon. member for Newton Park has introduced a motion here in which he emphasizes the stability and the growth of agriculture. As the speakers on both sides have indicated, we are talking more or less the same language today. There are a few things to which I must reply, and I begin with the statement made by the hon. member for Newton Park when he suggested that we should look at the kibbutz system of Israel, at the depopulation of the rural areas and at the necessity for having more White farmers on our borders. He suggested that a system of collective farms, such as the ones in Israel, be established here as well. However, the hon. member must remember that the circumstances on our borders with the Black States are quite different from those in Israel. If our geographical situation is considered, one finds that our extensive stock farms are only found on the borders of the Black areas. It is difficult to have a collective farm there or to build up a community such as a kibbutz. With such a low rainfall and a region which is dependent solely on stock production, one cannot have a system such as the one in Israel. It is easy to make the statement, but to apply it in practice is not so easy.

The hon. member says that the rural areas are becoming Black. We have discussed this before. This phenomenon is not the result of Government action; it is the result of economic circumstances. I have spelt out our policy to you before, and it is not the policy of America or Australia. Their policy amounts to “get bigger, get better, or get out”. This is not our policy. We are a country with a free economy, and the major reason for depopulation is in fact—and here I differ with the hon. member for Benoni—not that the land is not being worked, but that the man has been bought out by his neighbour. This is not the result of action by the State, but something which takes place in the process of a free economy. The successful man has enlarged his unit. For what reason? Because the profitability per unit has decreased. I shall admit quite frankly that as a result of production costs and circumstances, the profit margin has become smaller. If one wants to succeed, therefore, one must have a bigger volume of business. In some cases one can no longer have a small farming unit today; one must increase one’s turnover and have a bigger income. This one can only do if, instead of farming with 300 breeding cows, one farmer aims at farming with 400, 500 or even more. This is a normal economic law which is applicable particularly when one’s profit margin is small. The man has bought out his neighbour as a result of his own action, and we do not have legislation to forbid this. The hon. member says that that depopulation was a big mistake, and I agree with him.

The hon. member for Carletonville made a speech yesterday which to me amounted to the fact that the man who works and occupies the land will also own the land. It is important for us to retain the number of farmers we have, in so far as it is economically justifiable. The hon. member asked that we should have a revival in our country towns. Can the hon. member tell me what we can do to revive a town such as Hofmeyr? Can you give me a practical solution?

Dr. Du Plessis …

Now the hon. member talks about Dr. Du Plessis. Reference has been made here to the Du Plessis report on rural reform. It consists of three parts, and the first part has already been released. It will be freely available, because we do not hide agricultural matters. There is the problem of translating and printing it, but the full report will be published in the course of this year. But I want to tell you that the report does not give us a solution for injecting new life into a district consisting of units which are uneconomic by today’s standards. Now the hon. member asks us to develop the industries in the rural districts. Only three days ago the hon. member for Constantia said that his party was opposed to decentralization. This is what the hon. member said the other day. I sat listening to him. The one says “decentralize” and the other says “don’t decentralize”. I do not want to quarrel with you, but since we have consensus today, we must argue on the same level so that we can understand where we are going.

The hon. member also referred to production costs, and I really do appreciate that. The figures he mentioned were not quite correct, and in some cases they are even higher. I asked last year whether, if I were to try this year more or less to correct the prices of agricultural products after the 30% required by the inflation programme has been deducted from them, they would support me if the price of maize, for example, were to rise?

Of course. I helped you last year too.

But then you must also help me when you hold meetings with the consumers in Johannesburg. Then you must say that you really pity the Minister of Agriculture and you must not tell them, “See what kind of Government this is”, “They make food more expensive”. Then we have to play ball all the way through. If this is our agreement today, I see hope for the future. If the aspiring Minister of Agriculture of the United Party is going to support me this year, if he says that as a result of the increases in production costs, the consumer must realize

I have said so in the past.

Yes, but I just want you to hear these words. I want them written over and over again in Hansard. [Interjections.] As far as an agricultural planning board is concerned, I have promised that as soon as we have received the report of the Wentzel Commission on the marketing board system, we shall look at the National Marketing Board and see to it that we get a body which will be able to help us with planning on the long term. I have told you before that you have to help me to get people on that board who will be able to tell me in which way we should plan. So I am not arguing with you on this point. We are going to try to do it more or less in this way. However, it is impossible for anyone to tell me today how much maize we have to export next year; that we must adjust our Joseph policy in such a way as to keep to the minimum because we may have a record harvest again next year. The members of that planning board will have to be people of marvellous insight. I would not have believed last year that we would have so much rain again this year and I think that very few of the Opposition members would have thought that we would have so much rain again this year. This kind of thing is completely unpredictable.

It is the result of our good Minister of Agriculture.

The hon. member for Newton Park says that the solution does not lie in the big companies and corporations. I agree with him. Anglo-American began with Soetvelde. He knows this. Now they are selling them one after another. One cannot sit in a head office in Main Street, Johannesburg, and manage a farm in the Eastern Transvaal over the telephone. Your enterprise has gone to blazes before you have begun.

[Inaudible.]

Yes, Sarge; I shall tell you later what it means. [Interjections.] That is not our policy either. These things which take place in practice originate in a problem of management. I do not want the hon. member to worry about that. He must not think that this is the direction in which we feel we should go.

All the assistance which we render by means of Agricultural Credit, which the hon. the Minister of Finance provides by means of the Land Bank—we shall have a further discussion on this here this afternoon—is deliberately aimed at providing the new entrepreneur, the young man, the man who wants to get into agriculture, with financial support from the State, at cheap, subsidized interest rates. A man with an economic unit can do whatever he likes, he will not get a loan from the State. The system is aimed at drawing younger men to the industry. The hon. member need not be afraid that we shall move in the direction of big enterprises.

I should like to congratulate the hon. member for Bethal. He referred to the achievement of the South African farmer and he said one very important thing. Germany is very well aware of the fact that if it were ever to hurt France as a member of the European Economic Community, it would lose the great source of food in the south of France. The German Minister of Agriculture admits this. He says that such an important source of food will not be cut off again as has happened in the past, because future wars are not going to be waged with guns only. One cannot fight on an empty stomach. The population explosions are in fact taking place.

The hon. member said that we were inter-dependent, and this can apply to the rest of Africa as well. If they can have a commonwealth of nations in Africa, similar to the European Economic Community, we could eventually play a much more important role here with food as a weapon. On this point I wholeheartedly agree with the hon. member for Bethal.

Now I come to the hon. member for King William’s Town. Mr. Speaker, in all the time we have been sitting in this House together, today is the first time that the hon. member has made a positive speech in which he did not berate me once. I wish he could come and address a political meeting for me and say the same things there that he said here. [Interjections.] The hon. member says that we should not give special treatment only to the goldmining industries and to the other industries through the IDC. The strongest of the three legs which he mentioned here is definitely the agricultural industry. For this reason I feel that if the Opposition were to support us when we are sympathetically disposed towards agriculture and when we have to render assistance to a man who wants to produce food, this would be a positive contribution.

The hon. member mentioned that the maize farmers contributed R300 million towards subsidizing the domestic consumer. The hon. member is making a mistake. The domestic price of maize is R56 a ton for the producer and the consumer pays R50 a ton. The world price fluctuates. It has been R111 a ton and last week it was R92 a ton. Freight and insurance are R17 a ton. The average price overseas is approximately R15 higher than here. We use only 5,6 million tons. So the hon. member should not say that the maize farmers subsidized us by R300 million. It will be approximately R121 million or R122 million this year. That is to say if he himself gets that price on the world market. However, it is only for the past three years that we have been exporting our maize at a profit. During the preceding eight years we exported our maize at a loss, which amounted to R64 million over that period. Where did this loss come from? It was because of the price abroad, which was R64 million lower than the domestic price. The Minister of Finance and the Stabilization Fund all contributed—so did the maize farmer. We must see the matter in perspective.

I know the maize farmer is having a difficult time. I know his production costs are high, but as far as this matter is concerned, our figure must be realistic. I believe that the hon. member—I almost said the hon. brother; this is how I feel about him—will also help us this year when we come to determine prices. [Interjections.] This is coming to seem like a meeting of a church council to me.

Mr. Speaker, I have a list here of the research projects, of the tremendous task undertaken by the Department of Agricultural Technical Services—the biggest research department in the Republic and in Africa, as I said the other day. The hon. member for Graaff-Reinet mentioned each of these achievements of the Department of Agricultural Technical Services. Not that they are enough; according to the budget, the Department of Agricultural Technical Services will receive R58 million for research and information services. When the Minister of Finance looks at the essential economizing of every department, he is very sympathetically disposed towards this kind of appropriation which is related to the production of food. I thank the hon. member for Graaff-Reinet for the information he furnished.

The hon. member for Bryanston said: “He is one of my friends and also a friend of the department, the Ministry and the farmers.” I wish to thank him for that, I really appreciate it.

If discussions can be held in this spirit all through the session, we are going to finish very early this year and we should be able to go home by next month. [Interjections.]

†He said there must be a better understanding between the primary producer and the consumer—the townspeople. I agree with him. I think the people in the cities take it for granted that they will always have food. They never think that the day might come when we shall have a population of 50 million in this country to feed. Losing an average of 30 000 to 40 000 ha of land annually to the building of highways and cities, we are not gaining one single hectare of land. This message should be brought to the townspeople. The hon. member can help me achieve that in Bryanston and surroundings where he has a few voters. [Interjections.] I believe the 40 million tons of soil that are lost annually through soil erosion is a bit of an exaggeration. There is erosion and we are concerned about it, but I do not think we should exaggerate it. The hon. member said the Karroo was advancing at a rate of approximately 25 km a year, devouring our grasslands. We are doing a lot towards soil conservation.

*I just want to read you this extract, Sir, in reply to what the hon. member said, namely that nothing practical had been done (translation)—

Within only one year, so much more was done because the farmers had an income and were able to do it. Before a farmer pays his income tax, he first makes contour walls. He then deducts the cost from his income tax. In Natal, contour banks of approximately 2 000 km were made, and on only 142 km of these a subsidy was paid. The rest the farmers did themselves. We shall deal with these matters in greater detail under my Vote.

The hon. member for Bethlehem referred to the achievements in the agricultural field and made projections for the future and concluded by referring to man’s relationship with the soil. Sir, he spoke the language of a man who makes his living from the soil. He is bound to the soil and that is why he made such a speech. I want to convey my sincere thanks to him. The hon. member for East London City spoke of the problems in agriculture. Sir, there will be problems in agriculture, but we are mechanizing so rapidly that unless there is greater industrial development in the homelands and in the White areas, I am afraid that in five to seven years’ time we shall have people who will go about looking for work, because of the speed at which we are mechanizing in agriculture today.

To the hon. member for Benoni I can only say, as regards those farms that are not being cultivated, that 15 years ago we had 8,8 million head of cattle and 31 million sheep. We introduced a reduction scheme to conserve the veld. We spent R56 million on restoring the veld by means of a stock reduction scheme. The stock numbers have been reduced. At present we again have 8,8 million head of cattle, and the number in regard to sheep is 30 million, but we have a smaller number of farmers. You should be glad when you drive about in the Waterberg and you see the grass in seed. Think of the time when that part of the world was dry and bare from over-grazing. Then one feels happy when one sees how beautifully the veld has recovered.

Sir, I want to conclude. I think my time has expired. I just want to say that I have said before—and here I want to associate myself with the hon. member for Newton Park—that our motto at the Department of Agriculture is: “Food for peace, prosperity and progress.’’ I am glad that we have this feeling here today, because to fight communism one needs more than just guns. The first thing one needs is a shed full of wheat and enough cheap food, such as we produce. We must get our priorities straight. For that reason I am glad that we have discussed these things here today. I shudder when I think of famine and I am grateful for the blessings we have had over the past number of years, and when I look at the future, I say that we can feed 50 million people. We have the human material and we have the sympathy of the Government and today we have really and truly received sympathy from the Opposition side as well.

Mr. Speaker, the Minister has given us certain replies to the debate, and since the hon. gentleman says that there are some of these matters which he would like to discuss in greater detail under his Vote, I do not think it would be appropriate for me to go further with this debate, and consequently I withdraw my motion.

With leave, motion withdrawn.

Mr. Speaker, I move—

1. (a) combating inflation; and
2. (b) increasing production.

Sir, I am glad that I am in a position to come to this House this afternoon with this motion under these circumstances. Agriculture is a dynamic industry, in spite of the fact that there are perhaps people who think that this industry is dormant. But I say it is a dynamic industry which is developing, and in view of the increased costs and in this time of inflation in which we are living now, it is necessary that we should consider the position with regard to suitable financing for agriculture in South Africa.

The hazardous nature of agriculture in South Africa because of the varying climatic conditions and the high production costs, especially on land with a low potential, is well known. Only 3,3% of our land has a high potential, and, generally speaking, we have had a small profit margin recently. Therefore I am saying that the risk attached to agriculture in South Africa is high. Other factors which also contributed to making the matter even more difficult, is the injudicious subdivision of agricultural land, undesirable farming practices, disasters and setbacks over large areas in successive years and a small domestic market for a considerable time, with low world prices, especially of export products, and also seen in the light of the circumstances that agriculture is really a little separated from the ordinary economy of the country. It often happens that when economy in South Africa is flourishing, agriculture might be experiencing difficult times because of circumstances which apply within the industry, such as droughts or other disasters and setbacks. This is not to say that when all is well with the economy of South Africa, it also applies to agriculture. Often the reverse applies, because we had the experience in the past that when all is well with agriculture, things are also well with South Africa.

A further factor we have had to consider in recent times is inflation, the extremely high demands made upon the farmer and agriculturalist in this country, and also the financing policy of its Government to be able to provide in the needs of agriculture, in these urgent times when an increase in production is being envisaged. Sir, I emphasize here that we should have appropriate financing for agriculture in this country and that it is essential, in accordance with the policy of the Government, to determine our priorities and economic objectives, also as far as agriculture is concerned—which constitutes a major section of our economy—in order to ensure sound growth and stability by providing appropriate financing. During the past few years agriculture could have benefited greatly as a result of the positive financing policy of this Government, and, as background, I just want to deal with this very briefly.

After the problems in agriculture have been identified on the basis of various investigations, it was laid down, as policy, that all financial assistance which comes from the State, should be brought under one roof, i.e. the Department of Agricultural Credit. We have been enjoying the advantages of this sound policy for the past 10 years. But as far as appropriate financing is concerned, provision for agriculture should be made on three levels. On the first level is State aid, which consists of aid rendered by the Department of Agricultural Credit in various spheres. This is really meant for the farmer who is a beginner and, as our Minister of Agriculture said, who has only one of his feet in the stirrup, and who may perhaps also be in circumstances of economic need because of circumstances beyond his control and who may easily obtain assistance from other institutions, because of the fact that he is not economically strong and does not have a strong balance sheet. Nevertheless these are the people in whom this Government has confidence and who we know will be an asset because, as the Minister said a moment ago, we do not have a policy of “getting bigger”, but a policy of keeping the small man on the land and of providing in his needs. Recently the National Government has provided for those among them who are deserving cases and formulated a policy which provides him with finance at subsidized rates of interest, which resulted in the fact that we can tell many a success story of farmers who bought their first piece of land through the Department of Agricultural Credit. You know, Sir, in agriculture costs are high today and things are expensive. A few years ago an economic unit probably cost R50 000. Today it is well over R100 000. Therefore it is necessary that there should be appropriate financing from the State for these people with limited means in order to enable them to own their own land. Then we also have some of these people who are independent in their own right at present.

On the second level we have the Land Bank, which also provides in the needs of our people. This institution, the Land Bank, is probably one of the financial institutions in South Africa which we can be rightly proud of, because this task the Land Bank is fulfilling, is being carried out with the necessary ability to promote sound and stable growth in respect of agriculture, in the interests of South Africa. The beneficial influence of the Land Bank and its financing policy is a subject which could occupy us a whole day should we want to discuss it, because the Land Bank makes its financing policy felt over such a wide sphere. The Land Bank usually provides funds at a slightly higher rate of interest than that of the Agricultural Credit Board. Long-term loans are provided to farmers on first mortgage for the purchasing of land. Such a loan is usually covered by an insurance policy. Since the inception of this scheme, over R300 million has been paid out to estates. The Land Bank also provides interim capital to farmers in need of financial aid over a short term. Under appropriate schemes financing is also provided for the purchasing of livestock and implements and certain other means of production which qualify for it. The provision of the necessary capital to co-operative societies for the purchasing of means of production mostly falls in the category of short-term provision while certain long-term financing is also provided to co-operative societies. Medium-term credit is a major need in our agriculture. Over and above hypothec loans, which are really medium-term credit, the Land Bank often grants an extension of time to farmers who are unable to meet their obligations over a period of 12 months. A further 12 months are granted via the co-operative societies. This financing is really middle-term credit. The amount annually advanced by the Land Bank to cooperative societies and agents to buy in crops, is phenomenal. During the past year it amounted to approximately R1 400 million.

The broad spectrum of agricultural financing by the Land Bank is pre-eminently characterized by its appropriateness. The distribution is not only over a broad sphere, but also among various farmers with their respective means, so much so that it is the policy of the Land Bank that also the financially stronger farmer should receive financing with a view to obtain a regular feedback of funds to the Land Bank. The Land Bank is often also inclined and compelled to do long-term financing with short-term funds. For that reason there has to be a regular feedback of capital in order, that when agriculture finds itself in difficult times, the Land Bank is in a position to continue financing under those circumstances. The Land Bank also undertakes financing for the establishment of bulk facilities for the storage of grain. This is a very essential service. If this service did not exist, what would the cost of storage, handling and the distribution of our grain in South Africa not have been, and what would the inflationary effect on this service not have been?

We also have financing through commercial banks, financing companies and insurance companies. In this respect it is the policy of the Government that the more financially strong farmers should satisfy the bulk of their finance requirements on short and long term through these bodies. These institutions, together with other institutions, satisfy the needs for the financing of the agricultural sector.

From this plan of financing of the Government certain advantages originated which I would like to mention this afternoon. In the first place, the National Party Government has tried, through the financing of the agricultural sector, to afford private initiative an opportunity and to establish itself in agriculture, much more so than in other countries of the world. If there is one thing the South African farmer should be grateful for, it is for this Government’s policy that private initiative should be recognized in the country, not only in other spheres, but also in agriculture and that it is in a position to play the optimum role. This resulted in the agricultural industry being one of the best developed and most competitive industries today; competition takes place between units within the industry itself. The hon. the Minister said a moment ago that one farmer buys out another. This is the healthy state of affairs if there is competition. If we want to combat inflation, there should be sound and strong competition. This is what we have in the agricultural industry in South Africa at present.

The fact that the prices of our products are on the whole based on an average production cost survey, means that inefficiency in agriculture in South Africa is not being subsidized. The policy of average cost gradually eliminates the inefficient man. This is a very important point of which we must take note. Recently we have eliminated many of the problems which exist in agriculture, among others by the consolidation of land to convert smaller units into economic units. For that reason a small number of farmers were able to produce more and more food, so much so that we are able to feed more than 27 million people and then still have some left to export. In many of our industries we can export over 50% of our production. Exports not only earn very welcome foreign currency for South Africa, but—I want to put it very strongly this afternoon—it provides farmers with an income abroad which they might not have been able to earn on the domestic market. Therefore, it is necessary that when a farmer earns something on the foreign market, we should not begrudge him that income. Some of my colleagues will elaborate upon this matter. I would like to discuss a few bottlenecks in this regard. One of the first bottlenecks I would like to discuss with you, Sir, is the high rate of interest pattern we have had in South Africa recently. It is a fact that farmers, new and small industries and houseowners are affected by this. I do not want to single out agriculture, but I think the time has arrived for us to talk sensibly and responsibly about the bottlenecks which are developing. We must spell it out and reflect on it a little this afternoon. As early as in 1970 the Franzsen Commission admitted—and it is generally known to us—that the agricultural sector is unable to bear the present high rate of interest in South Africa in view of the difficult circumstances in which she finds herself. At that time the rate of interest was only 8½%. I further want to make the statement that rates of interest of 12% and 13% are inflationary because they push up the cost structure. While agriculture needs large amounts of capital in the present difficult circumstances, part of the rate of interest is responsible for a major portion of the inflation with which the agriculturist in South Africa has to cope. I want to go further. Interest rates, being as high as they are in this country today, affect the normal flow of the capital in our various sectors. This causes uncertainty and strain and it creates an in equilibrium in the normal capital flow on our capital markets. This is a major problem. One needs confidence for stable growth, for the combating of inflation as well as for increased productivity.

I want to quote a single example to you. A few years ago some of our people took out mortgage bonds, especially with outside institutions such as insurance companies and commercial banks. At that time the rate of interest was 8% to 8½% and today it is 12 to 14%, but this increase did not form part of the calculations of farmers. In 1970 it was calculated that 36% of the loan capital required by agriculture had come from the Land Bank, Agricultural Credit and cooperative societies. 64% of the loan requirements was provided by commercial banks, insurance companies and other financial institutions. At the end of 1974 those figures were slightly different. The 36% changed to 40%, in other words, there was an increase of 1% per year in the provision of loan capital by the Land Bank, Agricultural Credit and our co-operative societies. However, 60% of the capital still had to be provided by the other institutions, and this is expensive capital. Further, bearing in mind that 20% of our farmers provide 80% of the production of rates of interest of 12 and 13% mean on expensive capital, nobody must tell me that the farmer’s own capital is cheap capital, because it is also expensive capital and it is just as expensive as that of the industrialist and any other person. I want to say that 80% of our production of agricultural commodities in South Africa is actually obtained through expensive capital, except that portion which is provided to bigger farmers by the co-operative societies.

I do not want to advance a plea for our bigger farmers, but for stability in agriculture, because our stability is very closely related to fortunes and misfortunes of the bigger farmers. I want to make say that we will have to consider again the position regarding interest in this new and complicated situation, because the increased interest rates of other institutions are also having a negative effect on institutions such as the Land Bank and agricultural co-operative societies because money is being taken away from the later institutions. While we have this fine co-operative agricultural movement in South Africa and because we have seen that agricultural co-operative societies overseas have, to a large measure, their own funds at their disposal and are being utilized by the authorities in the service of pastoral reform, I want our co-operative societies in South Africa to be left alone to form their own capital, because in future we will have to rely to an increasing extent on the Land Bank, Agricultural Credit and our co-operative movements for cheaper forms of financing in agriculture. Therefore, I want to point out this afternoon that the effect of increase in the rate of interest has a very detrimental effect on our co-operative movement and on an institution such as the Land Bank. The Land Bank has to obtain a large portion of its funds on the open market and they are jealous of its fine policy. They have not increased their rate of interest in recent years. Because its rate of interest is so much lower than that of other institutions, pressure is brought to bear upon the Land Bank for more and more funds, so much so that it had to introduce certain restrictions in its loan policy. I do not know of one single person who had qualified on merit whom the Land Bank was unable to help. The same applies to Agricultural Credit, except in recent times because great pressure was also brought to bear for more and more funds, and because funds to purchase land with, were exhausted. I think that we will have to give close consideration to these matters.

From 1970 to 1974 co-operative societies increased their assistance to agriculture from R112 million to R198 million. In this respect I also want to mention that other institutions have reduced the provision of credit to agriculture. Here I want to single out insurance companies which provided R102,6 million in loan capital to agriculture in 1970 and at the end of 1974, only R77 million. I do not think that this is altogether in line with the amount of business insurance companies do in the country districts.

We have a large variety of industries within our agriculture. We have industries which must necessarily import inflation to a large degree in the form of tractors, spare parts, weed killers, sprays and so on. Some of our other industries perhaps do not import so much inflation. Inflation which is imported, must be absorbed and discounted. Some of our other industries export a great deal. I think it is time for us to bear in mind these aspects as far as agriculture policy is concerned, and give credit where credit is due. We, at the southern extremity of Africa, are dealing with agriculturists and people who have shown that they participate in the manifest against inflation. They are co-signatories and are prepared to do their share, but they are also part of a country which has a strong economy, part of a country which should be the leader in Africa and we in South Africa will have to take the lead in the near future. I want to appeal to everyone who has something to do with agriculture, not only the authorities, but also our agriculturalists themselves, that we should put our shoulder to the wheel and do everything we possibly can to create a powerful agricultural industry within the policy of this Government and to act as leaders in the field of agriculture in Africa.

Mr. Speaker, the speech made by the hon. member for Heilbron put me very much in mind of the speeches we had from this side of the House during the past number of years in respect of agricultural financing. The plea advanced by the hon. gentleman in connection with the extremely high rates of interest prevailing at the moment and the fact that other financial institutions are no longer interested in investing in agriculture, have repeatedly been used as arguments by this side of the House. I do not want to blame the hon. member for Heilbron for doing so, because just as we are in a position to be able to determine what constitutes certain bottlenecks for our agricultural population, so that hon. gentleman, who is himself engaged in this industry, who represents a farming constituency and who knows the people, is in a position to do so. For that reason we on this side of the House want to welcome his speech today, because here a bottleneck—as he called it—is developing, a bottleneck which undoubtedly has to have far-reaching effects for our agricultural industry in the long term. It is as clear as daylight to me that the fewer private financial institutions—and it does not matter who they are—are interested in investing in the agricultural industry in the form of mortgage bonds, the more essential it will be for that vacuum they are creating to be filled by something else. The private financial institutions are in a position to make far more profitable investments in buildings and industries than they can in agriculture. The return they receive from such investments, is far higher and they can recover their capital much quicker and use it for a new investment. After all, agricultural investment—and I have in mind particularly the purchase of land—is a long-term investment. Those mortgages are often taken over by the children of the farmer after his death.

After estate tax.

Yes, after estate tax. Then the mortgage bond is usually still higher. After all, this is what happens. I think it is quite normal that one will find the situation that private institutions will be less interested in agriculture and be more interested in the immediate and quicker increase of their money and the more profitable investment thereof. When making his speech today, the hon. member raised the same point (translation)—

The hon. member made a good speech. There is no fault to be found with his speech. As a matter of fact, it is appropriate that he should have made such a speech. However, let us analyse the motion of the hon. member. The hon. member moves—

1. (a) combating inflation; and
2. (b) increasing production.

It will not help us for the House only to take note of it. We have been taking note of it for a number of years. It will not help the hon. member and it is not going to satisfy me. I expected the hon. member to add the cherry to the cream. We should not merely take note of a situation. We should submit certain suggestions or recommendations to the hon. the Minister of Finance, the hon. the Minister of Agriculture or to the Government in general. Although we agree with the purport of the motion of the hon. member, I should like to move the following amendment thereto—

It is not our intention to belittle that what has been done by the Land Bank or the Department of Agricultural Credit up till now. As a matter of fact, we think these two bodies have achieved an enormous amount for agriculture since their establishment, in the year 1960 in the case of the Land Bank. Since 1966, when we amended the Farmers’ Assistance Act and established the Department of Agricultural Credit and Land Tenure, both these institutions have, to my mind, done nothing but good. I do not believe they have ever done anything bad for the agricultural industry in South Africa. For that reason we have always agreed when amendments had to be effected to the legislation pertaining to these two bodies. However, a new situation is developing in South Africa to an increasing extent. During the past number of years the Land Bank has been trying to keep mortgage bonds to more or less within the R100 000 limit. Admittedly, such assistance is not to be sneezed at, but the amount will simply not be able to remain at that level. It is impossible. Neither will the Department of Agricultural Credit and Land Tenure only be able to think in terms of assisting the young farmer. I do not say they are doing this all the time, but that department will have to play an increasingly more important role to relieve the interest burden of farmers. To have a loan with the Department of Agricultural Credit and Land Tenure is to my mind nothing to be ashamed of. Some people think that there is an enormous stigma attached to that.

In the 1970 election …

The hon. member for Pretoria Central should rather confine himself to matrimonial affairs. He is familiar with that kind of legislation. I would rather listen to the hon. the Minister of Agriculture and the hon. member for Heilbron as far as agricultural affairs are concerned. The hon. member for Heilbron is quite right. There is not one single person who obtained a mortgage bond of R100 000 at 6% or 6½%, say, 10 years ago and who does not have to pay a rate of interest of 13½%—in many cases 14½%—at present. Therefore, the interest burden has increased exactly 100%. If one has been farming well and was able to pay off half the mortgage bond, it means that one’s interest burden is still the same as the interest burden one would have had if one had borrowed the money from a private institution at that time. It is no use asking me: If industrialists and businessmen could pay this, why not also the farmers? Well, I have had differences of opinion with my own family on this matter. As businessmen and industrialists they borrowed money from private institutions, and then say: “Yes, you farmers are fortunate. You can obtain loans from the Land Bank at 6%%, and from the Department of Agricultural Credit and Land Tenure at 5%.” However, what those people do not bear in mind is that industrialists and businessmen are in a position to recover the money they have to pay as interest, no matter what such rates of interest are. In agriculture it is not always possible to recover that money. Those same relatives of mine, after they have started farming, admitted that I was quite right, because they could see for themselves what the position was. Personal experience has taught them that there is a vast difference between a person making an investment in industry or in the business world and the person making an investment in agriculture. For that reason it is not the idea of this side of the House—and neither, so I believe, is it the idea of that side of the House—to ask for a form of socialism in order that an exception could be made of agriculture and special assistance could be given to it. However, I must say that I welcome some form of socialism for the farmer, in this respect … [Interjections.] I welcome it as long as it is going to help the farmers to become financially strong, to pay their debts with the Land Bank or the Department of Agricultural Credit and Land Tenure so that the farmer who comes next can be assisted to become financially strong, too, and to stand on his own feet. In this way one will create capitalists in South Africa by means of a small measure of socialist aid rendered to them. In this respect I do not think there could be anything wrong with this form of assistance. After all, the assistance does not remain with one person. As soon as he has paid his debts, the money is immediately used to help the next young farmer on his feet and for that reason there can be nothing wrong with this.

Unfortunately the motion moved by the hon. member for Heilbron does not quite satisfy us on this side of the House. I want to quote an example—and in doing so, I want to conclude because my time in this debate has almost expired—of what has happened recently at a settlement all of us know quite well. It is situated in the constituency of the hon. member for Kimberley North. This settlement was established years ago, in 1936. By means of State aid in terms of the old Land Settlement Act a large number of farmers were established there. Through the years all those people became prosperous. I think that the process of elimination which took place there through the years, proved that those farmers are an asset to the approximately 80 000 farmers we still have in South Africa.

For whom are they voting today?

It does not matter for whom they are voting, even though they would be voting Prog.

They have more common sense than that.

Yes, undoubtedly; I do not think they would do that. These people have experienced a problem recently, i.e. the problem of water-logged ground; there is an excess of water on their land. In this area certain steps will now have to be taken on the part of the State, on the part of the individual farmer and also on the part of, for example, an institution such as the local co-operative society. These people are dependent upon cash crops. If they do not have cash crops it is impossible for them to make a decent living in that area. Now, it is a fact that their crops have virtually been a failure and that they will have to spend a considerable amount of money during the following year in order to restore that land to its former condition. Now, the question arises: If those people were to approach private institutions to borrow money at 13½% or 14%, what would become of them? It is simply impossible. I also ask myself whether the State—the hon. the Minister of Finance will be able to tell me—is in a position to help these people at this stage, and to what extent it can offer assistance.

They can get production loans from the Department of Agricultural Credit.

This is all very well, but one cannot sow seed and apply fertilizer to the soil if the soil is water-logged. This is no good. Special credit facilities will have to be created for those people to tide them over this period during which they will have no income, but only expenses.

All this case does, is to lend added strength to my argument that we need an institution such as a Department of Agricultural Financing which would be able to deal with this kind of problem irrespective of what the cost is going to be. After all, the long-term advantages this entails if we want to assist those people to be independent again, must be to the future advantage of South Africa and agriculture as a whole. For that reason we say that it will unfortunately not help anyone for this House simply to take note of this motion. I want to ask the hon. the Minister that he should once and for all consider the suggestion that a Department of Agricultural Financing be established and tell us whether he agrees with it or not. Let us reach the stage where we shall know that we have an institution, an institution which we can approach for long-term and medium-term loans, and an institution which will be able to help when disasters occur from time to time such as the one we had recently. Once we have the Agricultural Planning Board and the Department of Agricultural Planning, we would, in fact, have a development corporation for the agricultural industry in South Africa, and once we have that, I can only see a bright future lying ahead of us as far as the agricultural industry is concerned.

Mr. Speaker, allow me to tell the hon. member for Heilbron, who introduced this motion, that we are highly appreciative of this motion. It is a great pleasure for me this afternoon to support the motion introduced by the hon. member for Heilbron. I also want to congratulate him on his very clear exposition of the present condition in which agricultural financing finds itself. I do not think he left any doubts about the matter.

At this stage I want to say that I do not intend covering the whole area he covered. I shall try to confine myself to a few particular aspects he mentioned. The hon. member for Newton Park said that he and his party support this motion, but on condition that something is added to it. I personally do not believe that we actually need a re-organization of the institutions which provide agricultural credit or agricultural financing. This is not our major problem. What we need, is money. The machinery exists and it is adequate enough. In 1976 agriculture finds itself before a challenge as seldom before, internationally as well as nationally. On the one hand the whole world is asking for food for its rapidly increasing population and, on the other hand, the world economy is in the throes of an inflation and, at the same time, a recession which almost borders on a depression. In order to stimulate production while at the same time containing inflation, is the dilemma of the governments of the Western world. As a result of various factors—these were pointed out by the two previous speakers—agriculture in the hands of the individual farmers has become an unpopular sphere of investment for the financial institutions. This is a fact; we cannot get away from it. Both the previous speakers drew attention to that fact. The reasons for it are obvious. On the one hand it is as a result of the risk attached to these investments and, on the other hand, a result of the small return. When considering the economic history of countries, we find that countries normally started with a predominantly agricultural economy and that the majority of citizens had to make a living out of agriculture and that the authorities therefore had to give serious attention to the welfare of the agricultural industry. Perhaps this constitutes the real reason for State interference in the free economy. Up till now I know of no single country in which agriculture operates without State support. The State is compelled …

We are not socialists.

It is not socialism when the State supports an enterprise. The State is compelled to support the agricultural industry by means of various measures so that the rest of the population can be provided with sufficient food. Yet, the agricultural industry does not lend itself to nationalization or a totally socialist system. Proof of this is the extent to which the Russians made a failure of their agricultural industry.

It is very difficult to determine the optimum size of a farming unit. I believe that the agriculture of this country should be in the hands of financially sound individual farmers and not in the hands of large co-operative societies, trusts, or cartels. Also the hon. member for Newton Park expressed his concern about this matter this morning. In a recent report submitted to his Congress by President Ford, he said that he would endeavour to maintain the family farm. Our hon. the Minister said this afternoon he believed our agriculture should be in the hands of individual and financially sound farmers. I have already pointed out that agriculture in the hands of the individual has become an unpopular sphere of investment. But this has been the case for a long time and our farmers have realized this at an early stage. They began to realize that they should, to a very large extent, depend on their own capital and in cases where it was impossible for the authorities to grant financial assistance, they turned to the system of co-operative societies. I firmly believe that the present co-operative form of enterprise, together with the other partner, the State, has become the ideal partner of the farmer. I should like to point out briefly the role of the co-operative society as a short-term financing resource in agriculture. The agricultural co-operative society has two objectives. On the one hand, to provide means of production to its members at the lowest prices possible. The second objective is the handling of its products and to market these at the best possible prices. It is unfortunately a fact that in its endeavour to achieve this second objective, the agricultural co-operative society is being hampered by our system of control boards and its attendant price control. I do not have the time now to go into the merits of the matter; this should be dealt with in a separate debate. In view of this it is obviously imperative for the agricultural co-operative society to endeavour to achieve its first objective as efficiently as possible i.e. the provision of means of production at low prices. Now, the co-operative society has problems. Its major problem is capital. Agricultural co-operative societies granting credit to its members, need considerable working capital and as a result of inflation but also as a result of normal growth, the amount required by co-operative societies is increasing all the time.

I want to tell you, Sir, that in the case of a large co-operative society close to us here the outstanding members’ accounts increased by 40% during the past year, and I believe this is a tendency throughout the country because the prices of agricultural requirements increased phenomenally as a result of particularly imported inflation. For example, the price of tractors increased by 110% over a period of three years. The question is: Where do the co-operative societies get this capital from in order to finance agriculture? Let us consider for a moment the capital situation of an average co-operative society. Its share capital will amount to 1% of its total capital requirements; its reserves approximately 14% and its long-term loans with the Land Band 6%. Loans from members and members’ funds will be approximately 11%; overdrafts at commercial banks 17%; short-term financing loans with the Land Band 43%; and other creditors approximately 8%. These are the capital requirements of an average cooperative society which has to be satisfied. Own funds are cheap money. It is the cheapest money. Our aim should be—and this should be the aim of every co-operative society—to build up reserves. We should also guard against—and there is talk of possibly levying a tax on co-operative societies—not making it impossible for co-operative societies to build up their own funds. This is important. We should encourage members of co-operative societies to invest their savings with cooperative societies. We should also make it possible for them by giving them the necessary incentives. Furthermore, we should encourage members of co-operative societies to make less use of credit if this is in any way possible, or to pay cash for their requirements as far as possible. As I have said, the co-operative society is dependent upon the Land Bank for the bulk of its funds. The role played by the Land Bank in the financing of co-operative societies is extremely important. It is quite clear that the Land Bank is playing an important role in the financing of co-operative societies. One is extremely grateful for this institution, the Land Bank, and it is hard to imagine how South African agriculture could exist without the Land Bank. The hon. mover of this motion drew attention to the enormous amount the Land Bank was making available to agriculture. Attention has been drawn on cash credit loans, which amount to as much as R1 400 million this year. It is also interesting to note that, according to the report, it amounted to R1 200 million in 1974; it is an enormous increase. Just as the pressure on our co-operative societies for more credit is increasing, for more credit for their members, so the pressure on the Land Bank has increased for more funds for co-operative societies. High rates of interest is the main reason for this. Independent co-operative societies which have not made use of Agricultural Credit for years applied again. We want to ask the hon. the Minister of Finance in all earnest—while he is sitting here listening to this agricultural debate this afternoon—that he should take good care of the Land Bank in his Budget. Investment in the Land Bank is anti-inflationary. It is anti-inflationary because this cheap money will enable our farmers, through the co-operative societies, to produce cheaply. This is what we are looking for in this time of inflation.

Investments with the Land Bank by control boards or co-operative societies, particularly when it can be done en bloc will make considerable funds available. A considerable cash flow can be obtained cheaply if we stand together and invest agricultural funds with the Land Bank. A shortage of capital in agriculture will lead to wasteful exploitation, inefficient production and inflation. We should be careful to utilize our funds correctly. I am concerned about the creation of monopolies in agriculture. I am concerned about vertical integration. I am concerned about capital used by large concerns which may lead to monopolies in agriculture. I am also concerned that, in our present system, we attach too much value to subsidies. Probably it has become necessary for us to reconsider the entire system of subsidies. I want to ask in all earnest this afternoon that we consider a subsidy such as the subsidy on white bread. I have never been able to find any justification for a subsidy on white bread. I think it is money we could save. We should give close consideration to this matter. It is estimated that the average farmer has to provide to an increasing extent for future expenses on machinery. For that reason I also want to ask in the final moments available to me that we should thoroughly consider funds for replacement, a replacement allowance, other than merely the normal wear and tear allowance on our agricultural machinery and that we should also consider special replacement allowances. If we do not do that, we are going to experience problems in agriculture in future.

Mr. Speaker … The sound that comes from the other side of this House when I rise to speak reminds me of a kennel at feeding time when the inmates make a considerable amount of noise. I have listened, Mr. Speaker, with considerable interest to the various comments in the course of the debate in this House today. The points made by the hon. member for Malmesbury in regard to co-ops will, I believe, have general support because the co-op situation is complicated at the moment and the question of finance to them is most difficult. When he asks for a review of the attitude towards subsidization of the various products, I agree with him once more, although perhaps my attitude would be to approach the matter from a different angle, certainly when he talks about the subsidy for white bread. On this point, I agree with him, but when it comes to the subsidy on bread as such, and I am talking about nutritious brown bread, I think the hon. member must bear in mind that there are hundreds of thousands of poor people in this world and in this country who should be enabled to purchase this type of bread cheaply. If he specifically refers to white bread, then I would agree with him. I have listened, too, to the hon. member for Heilbron, who moved his motion dealing specifically with agricultural credit, the Department of Agricultural Credit and the Land Bank, and I also agree with him as does the member for Newton Park, when the people in agriculture are faced with interest payments at the rate of 12,13%, it makes it absolutely impossible for any farmer to operate. It is absolutely unrealistic in these days to expect this sort of interest rate to be paid. I am glad he also included the small industrialist and the house-owner, because they are feeling it just as much.

I want to approach this matter from a slightly different angle. The motion refers to suitable financing for agriculture with a view to combating inflation and promoting increased production. I think it is correct that we should look at the way we are spending our money at the moment, particularly the way in which the Department is spending its money because the question is whether this money is being well spent and whether it is a worthwhile investment. We in these benches would like to express our approval of the tremendous work being carried out by the various sections in the Department of Agriculture. We of course do not approve of the hon. the Minister himself, but this is a different matter. Perhaps we would approve of him as a farmer, but not as a Minister, although there have possibly been worse Ministers. We do not approve of any of his policies. As far as his department is concerned we consider this to be a very good department indeed. I am not being as effusive as the hon. member for Bryanston, who believes that he is a very good Minister. In spite of the hon. the Minister and his Government the department is doing some very fine work indeed. We have heard a great deal of discussion in this House today on the important role of agriculture in the economy and that if it is to receive the necessary financial stimulation, every cent of the available funds must be spent in the most effective way possible.

I would like to draw the attention of this House to the splendid work being done by the Department of Agricultural Technical Services in the field of agricultural research. Certainly, if money is made available, this is a field which brings considerable reward and constitutes a very fine long-term investment. Examining the work of the department’s research team, it is most interesting to see what sort of matters are being examined. There is, amongst other things, the improvement of various field crops, such as wheat cultivars, and this has been of immeasurable benefit to South Africa. I found it tremendously interesting when driving through the Eastern Free State a few months ago, to see the huge area of arable land which is now under wheat. One only has to cast one’s mind back into history, to the disastrous results of the attempts of the British settlers to grow wheat when they arrived in the Eastern Cape in 1820. We have come a long way and we have to understand just how far research has brought us and what it has meant to South Africa. I was interested to read the other day of a successful experiment in dry land wheat farming carried out in the bushveld areas of the north-western Transvaal. It apparently works very well, admittedly in a season when more rain than usual fell, but there seems to be considerable confidence that this could well work out successfully even in a year with a smaller rainfall. On the whole, research is having tremendous benefits for South Africa. I was also interested to see that research was producing gem squashes, “lemoenpampoentjies”, that do not yellow for up to three months. Last year, when I mentioned to the hon. the Minister that gem squashes were being retailed in Pretoria at a mark-up of approximately 600%, one of his excuses was that gem squashes which had turned yellow were virtually unsaleable to the housewife. The Minister’s own department is now depriving him of the use of that excuse in future and he will have to think of a new excuse when he defends his marketing policy in future.

Talking of marketing, I believe that it is important that we should realize that if money is going to be spent well on agriculture in South Africa, we will have to produce a better marketing system, and I am pleased to hear on the grape-vine that the report on marketing is, at last, likely to appear before us. I hope the hon. the Minister will be able to tell us when. I asked the hon. the Minister a year or so ago whether it would not be possible for the commission at that stage to produce an interim report, because I believe that the question of marketing and the resultant effect on food prices in South Africa was so serious that it warranted an interim report. However we hope that the commission has come up with several suggestions and that the hon. the Minister will act very fast on those suggestions, because the situation is very serious indeed at the moment. I do not believe that our marketing system is good, because I believe that money is being wasted and that there is a proliferation of waste in the various marketing organizations which are at present in existence. I think that there are cheaper and better short-cuts.

Going back to the subject of research, I believe that this sort of expenditure is vital and that in any list of priorities, research expenditure is vital. I must urge the hon. the Minister that even in these inflationary times, cut-backs on research must be avoided. If we are to fight inflation by the production of cheaper and better foodstuffs, research must in fact be increased to give the farmer the opportunity and assistance to produce more and to increase his productivity. There are other ways in which research helps too, for instance in the field of plant protection against pests and the protection of animals against disease of one sort or another. This is of course a field which requires constant attention. I found it very interesting indeed that the integration of chemical and biological research and biological measures reduce the cost of pest control by a considerable degree. This is of course another blow in the fight against inflation, viz. first the anticipation of and then the solution of the problem. When it comes to the practical use of the results of research, I believe that the division of agricultural Production and Economics has a tremendously important role to play. I will again say that this is money well spent. I followed with a great deal of interest the activities of this division, for example the advice it makes available on field husbandry, horticulture and animal husbandry. This advice must be of immense benefit to the general efficiency of our farmers. The educative role played by the section dealing with information and training and the work done by regional economists in agricultural colleges, must inevitably lead to an improvement of farming standards and be of benefit to the whole country. Even the information gleaned from the mail-in record section, which I am not certain receives as much attention as it should, must be used to help farmers in the continual battle to keep prices low enough to suit the consumer’s pocket and to keep them within reason. My point is that money spent by the department at present, is money well spent. The hon. the Minister must ensure that this continues to enable our farmers to improve productivity which, in turn, will keep inflation at bay. One must not of course forget the tremendous role being played by the Department of Water Affairs. Money spent on irrigation systems, resulting in increased productivity, is never wasted. It is money that is being spent to the benefit of South Africa.

My hon. colleague from Bryanston spoke at considerable length about the question of soil erosion. I do not think anyone can quarrel with the necessity of spending money on stopping soil erosion. The hon. the Minister seems to think that what the hon. member for Bryanston put forward is not such a problem, but one only has to look at our rivers to see the vast quantities of silt that are carried down every year and to realize that there is no room for complacency at all in this direction. I think this speaks for itself.

I support the hon. member for Bryanston when he says that the Government must do far more than it is doing at present in this direction. I know it is doing a very good job as far as things go, but I believe that more has to be done, and I agree that our list of priorities must ensure expenditure of every cent possible to preserve that which is virtually irreplaceable—and that is our soil.

Looking at the money spent by the Department of Agriculture and by the Department of Water Affairs, the tremendous dedication and the ability of thousands of people in South Africa directed towards improving productivity and combating inflation in the agricultural industry, I think we must all agree that South Africa can be proud of what has been achieved. However, I am confident that the hon. the Minister is not going to become complacent, that he will continue to do his best and that the necessary finance will be found.

I have every respect for the hon. the Minister when it comes to the beautiful potatoes he grows. I saw a wonderful picture of the hon. the Minister with some of his own produce and it looked very impressive indeed. However, I would quarrel with some of his attitudes as a Minister, although I do not want to quarrel with him as an individual now. I want to quarrel with the whole Government, represented by the hon. the Minister in this debate, because we in these benches believe that the geographical area of southern Africa should be seen as a whole from the agricultural point of view …

But not from the military point of view.

Somebody there is begging the question and making a very clever remark. Would he agree with the contention that it should be seen as a geographical whole or not? That hon. member has no difficulty with that. Obviously all the difficulties he has had to contend with over the past couple of years have been in other directions.

You have got them now.

We believe … [Interjections.] The hon. member’s comment that we have them now should be seen in the context of an ability to deal with situations. We can make effective use of what we have. It is obvious that the party on my right is quite unable to do anything with any of the material it has and is quite ineffective in using it.

I want to get back to the debate in hand, however, and forget about these extraneous matters. I would just like to repeat the point that I was making, viz. that we in these benches believe that the geographical area of southern Africa should be seen as a whole from the agricultural point of view. We further believe that effective stimulation of the agricultural industry should be applied to the whole geographical area within our present borders. We also believe that the services available to farmers in the Republic should be available to all farmers. It is so wasteful that services rendered to White farmers should have to be rendered to Black farmers by another department, the Department of Bantu Administration. In their own way they are doing a very splendid job and a very good job, but again I believe it is wasteful when one proliferates bureaucracy, when one has to have two departments doing the same job in the same geographical area. This, of course, is getting worse as we go along. As far as the Transkei, KwaZulu, Bophuthatswana and Gazankulu are concerned we have a proliferation of departments of agriculture throughout the whole geographical area of southern Africa, and this could only be wasteful.

In our opinion, the only intelligent thing would be to avoid duplication of administrative operations and the resultant unnecessary duplication of costs, because there is a duplication of costs. It would be intelligent to operate all agricultural services for the country as one co-ordinated operation. I am aware that a considerable cross-fertilization of ideas takes place, and that there is co-operation, but inevitably there is inflationary waste because of duplication.

We not only believe in one economic policy for the whole of South Africa, but also in only one agricultural policy for the whole of the country. I think the hon. the Minister will agree with me when I say that any farmer can tell one that, however good conservation methods on his own farm or in his own area may be, his solutions will not always be completely efficacious unless his neighbours also pay some attention to the problem and pull their weight.

One sees this in so many of our rivers, that originate outside our territorial borders and are already silt-laden when they get to our country. One sees this in so many areas. One sees it particularly in many of our Bantu homelands, where there are too many people on the land, where land is overgrazed and where a considerable amount of soil erosion is taking place. The rivers that flow through those areas are becoming silt-laden in those areas. This has an effect on the whole of the rest of South Africa. One cannot see these as individual little areas. Look at the geographical make-up of KwaZulu, for instance, where rivers flow through one area into another area and out again to another area. I believe it is of vital importance that one should have coordination and that money should not be wasted. One must have co-ordination, and this is best achieved by one department of agriculture.

I now wish to proceed to another point, and that is the question of education. I specifically want to talk about Black education in agriculture, and I am not referring only to the education of Black people within the homelands. I am referring to Black farm labour without which our farms could not operate. I want to put it to the hon. the Minister, and to members on that side of the House, that it is vitally necessary that money be spent on the education of Black people who are likely to be involved in farm labour. It has often been said to me by members of the other side of the House, and people outside the House, that much Black farm labour is only worth what is paid for it today. I believe that that is its worth simply and only because it is unskilled, untrained and uneducated labour. Such labour is perforce expensive labour. It makes it more difficult for the farmer to produce things cheaply. I believe it would yield us immense rewards in South Africa if we were prepared to invest our money in the education of our farm labour. I am not only referring to the White farmer himself, but also to the Black labourer. I do not think that enough is being done. I believe there are individual farmers who do a very fine job of education of labour, but unless this comes from the Government as a policy operation on a tremendous scale, our farmers are going to suffer because they will have to contend with unskilled labour which is expensive labour.

I would commend this idea of the hon. the Minister, because I think it is an important one. I would, incidentally, fault this Government on one other aspect of policy which affects the farmer to a great degree.

It may surprise hon. members, but I do have many farmer friends and supporters … [Interjections.] The hon. member for Boksburg, that rural constituency of Boksburg, of course knows all about farming. Many of the farm labour problems that are being experienced by farmers at the moment, are the direct result of Government policy, in that Black farm labourers know that if they remain farm labourers living in a White area, their children will find it very difficult indeed ever to go to an industrialized area in so-called White South Africa and get a job there. They will be restricted to that farming area to a large degree. Many Black labourers on farms are now going to the homelands to ensure that their children will have the opportunity of going to the cities and getting well-paid jobs. A lot of the problems farmers are experiencing in this field of farm labour are directly as the result of that. I believe that money is not being well spent on that sort of policy put forward by the hon. the Minister and his colleagues and this Government.

I listened to the amendment moved by the hon. member for Newton Park with fairly mixed feelings. I do not really think that it is necessary to have a Department of Agricultural Finance. I am always against the proliferation of bureaucracy, and I tend to think that the amendment moved by the hon. member would involve just so many more civil servants. I think at the moment the Department of Agricultural Credit, a the Land Bank and the other organizations which finance farmers are doing a reasonable job. I do not entirely agree with the hon. member for Heilbron when he says he knows of no cases at all which on merit have been turned down by the Land Bank. I think there are many meritorious cases which have been put forward and which have been turned down for reasons which I will not enumerate at this time, but of which I think many of us on this side of the House are very suspicious.

Mr. Speaker, I would like to make use of this opportunity to congratulate the hon. member for Heilbron on the motion he proposed and on the way in which he explained it to this House. The hon. member for Orange Grove joined the debate and praised the hon. the Minister of Agriculture for his research policy in the Department of Agricultural Technical Services. I found it very interesting that the development of gem squashes in particular had impressed him tremendously. Now one is inclined to come to the conclusion that this would be the reason why there are so many political gem squashes present in this House nowadays. In any case, the hon. member regarded this as money well spent on agriculture. The hon. member was further concerned about the fact that we do not have a uniform agricultural policy in South Africa. He wants South Africa to be seen as a whole and he wants us to have one Department of Agriculture which would serve the whole of South Africa, and I assume the homelands as well. This is typical of the arguments of those hon. members, because they do not know the mentality of the Bantu. They are unfamiliar with the type of farming he practises, the type of farming which is still at a developing stage. One has to make special provision for their farming and their agricultural circumstances under a special department, namely the Department of Bantu Administration. As he rightly said, they are making a good job of it, and I think the hon. member should leave them alone so that they can make a good job of it. It is not practicable to incorporate them under the same department. I just want to add that this surely does not mean that the Department of Bantu Administration never has any contact with the various agricultural departments. I think there is proper contact to help them in this respect. The hon. member also mentioned agricultural training. This is probably a very important facet to encourage productivity and to combat inflation by doing so. It is in keeping with this motion. I also want to tell the hon. member in this regard that large amounts are spent by the Department of Bantu Administration to establish agricultural training centres where Bantu can be trained, for instance to handle the expensive machinery which is used in agriculture today. In the Cape Province we already have such an organization, Komarie, where Coloured agricultural workers are trained.

But I would like to come to the amendment of the hon. member for Newton Park. I find it interesting that the hon. member moved an amendment at this stage in which he asks for the establishment of a Department of Agricultural Financing. But the hon. member was very vague about this big idea of his. He did not explain to us how this department should function or where it should find its capital. Nor did he tell us, in advocating this proposal, in which respect he feels that there cannot be effective action in certain financing areas with the present financing institutions which we have. In other words, I do not see the need for it. He did not make out a case to me for the establishment of such a department. But we should look at the different areas of financing. We have quite a number of financing levels. Financing in South Africa with its special agricultural circumstances is extremely specialized. The Department of Agricultural Credit and Land Tenure is a department which undertakes specialized financing for agriculture under particular circumstances, because, firstly, it finances the farmer who wants to enter into agriculture, at subsidized interest rates. But very important is the fact that it undertakes specialized financing in respect of emergencies such as we had during the droughts. The example of the stock reduction scheme which cost millions of rands was mentioned here today. There are also certain emergencies concerning flood damage, etc. In other words, there are special circumstances under which this capital is applied at special subsidized interest rates. There is for instance the conservation of the soil in South Africa, soil conservation. This is specialized financing. For that reason I think we should leave this type of financing with the Department of Agricultural Credit and Land Tenure.

But another very important principle is involved, namely that this type of financing can only be done by the Government. This is expensive financing and it is risky financing and it can only be the function of the Government and not of private financing institutions or even of a semi-Government financing institution like the Land Bank. They cannot do it; it is a function of the Government. But I think the hon. member’s problem is that he feels there is not proper coordination between the different forms of financing. I want to give him the reassurance that there is in fact co-ordination in this field. If the hon. member wants to acquaint himself with the facts, he will remember that there was a recommendation in the third report of the Du Plessis Commission that an advisory coordinating council for agricultural credit should be created for the Minister of Agriculture. This council was introduced two or three years ago and it is proceeding with its functions and drawing up a programme for the very purpose of establishing co-ordination between all the financial institutions which are concerned with agriculture. The council exists of the Department of Agricultural Credit, which takes the lead. It is presided over by the chairman of the Agricultural Credit Board. He draws up the agenda. The Reserve Bank is also represented on the council, for a very special purpose. The purpose of this is to bring these institutions together so that the economic and monetary position in South Africa can be determined properly. The Land Bank itself, a very important financier of agriculture, is represented on this coordinating committee. Representatives of the commercial banks of South Africa also serve on it. Finally, its members include representatives of the S.A. Agricultural Union, in this particular case representatives of agricultural co-operatives. This co-ordinating committee meets time to time to discuss the financing needs in South Africa under the particular circumstances which prevail at that stage. From that committee the agricultural financing policy can then be conveyed to the Minister of Finance and to the Minister of Agriculture, so that financing can be done effectively in South Africa and so that it can contribute to the productivity of agriculture and the combating of inflation. But there are specific factors which have a bearing on financing. There are very specific factors which play an important part in determining a financing policy. In the first instance we have an agricultural policy in South Africa which is geared to vertical expansion. In other words, the object is to intensify agricultural production, which naturally leads to capital intensiveness. Capital intensiveness again involves greater risk. These are factors which should be considered very seriously. The other aspect which we should keep in mind when we are dealing with agricultural financing, is the policy which our Department of Agricultural Technical Services adopts concerning optimal soil utilization. This basically means three things: Firstly, that one should farm in harmony with nature; secondly, that one should not destroy the natural agricultural resources in the process; and, thirdly, that one should be able to farm economically in South Africa on these units. For that reason it is important that one should take the different aspects into consideration when one undertakes agricultural financing.

The Department of Agricultural Credit concentrates on the rehabilitation of farmers and on assistance to disaster-stricken areas. The Land Bank, which to my mind, and also according to the hon. member for Heilbron, is the most important financing institution in South Africa, also works selectively. It tries to adapt itself from time to time to the changes in the agricultural structure in South Africa. I want to allege that the Land Bank cannot undertake short-term and production financing effectively, unless it has the agricultural co-operatives as its partners in this process. Agricultural co-operatives in South Africa are directly concerned with the financial position, the production method and the particular farming activity of every farmer. Because the Land Bank finances the purchase of production means, like fertilizer, seed, etc., and because the co-operatives in turn have to recover the debt—the law gives them the right of pledge, the preferential right to those claims—it is their function to see to it that the capital is applied as effectively as possible. A very interesting development recently took place in the co-operative world. The cooperatives entered the field of agricultural guidance. The Department of Agricultural Technical Services now recognizes the cooperatives as partners and as institutions which can give guidance to the South African farmer on a rational basis.

As an extension.

It is an extension of their activities. Where it is necessary to apply the funds effectively in the production process, the Land Bank can expect the co-operatives to invest their production means correctly and the question of intensiveness in agricultural production to be acknowledged.

We have one particular basic problem in the vertical development of agriculture. If we wish to increase production, we will have to invest more and more capital in mechanization. To replace machinery under inflationary circumstances in South Africa has become nearly impossible. The prices of tractors and agricultural machinery have increased tremendously during the past year. I want to point this out as one of the obstacles in agricultural financing. Last year the Land Bank made medium-term financing easier and more liquid by means of legislation, by providing that the farmer now only has to sign a promissory note. Therefore it proceeds from the standpoint that if the farmer’s balance sheet is sound and he has a good repayment ability, he could probably qualify for this kind of financing under certain conditions.

My request to the hon. the Minister is that we should supply sufficient capital to the Land Bank so that the process of mechanization can take place more rapidly and can meet the enormous needs which are continuously developing. Here once again we have the co-operatives as partners of the Land Bank to see to it that the funds are applied correctly in the right production process. This capital should be applied correctly in co-operation with the Department of Agricultural Technical Services.

In conclusion: I think we have reached a particular stage in agricultural financing. I do not want to ignore the important service rendered by the commercial banks and the private sector in agricultural financing. In fact, I think they play an important role today, in spite of the enormously high interest rates. We have the situation that due to the intensifying of agricultural production in South Africa, agricultural financing is becoming too risky for these people. One has the position that the banks supply short-term financing to the farmers. The farmers may experience disastrous circumstances, and then the short-term financing becomes medium-term financing, and long-term financing if need be. This makes the private financing institutions, such as banks, hesitant to invest their money in agricultural production in the form of short-term financing. Therefore we shall have to expand by means of the Land Bank and the agricultural co-operatives to be able to meet this increasing need in future.

Mr. Speaker, I agree with much that the hon. member for Bethal said, and I hope that I shall be able to enlarge on a few of the things he said during the course of my speech. I do not believe that there is much difference between what the hon. member said and what the hon. member for Newton Park said. While the hon. member was speaking, I wondered whether he would not concede, as a point for discussion, that the work of the department could be done far more efficiently if a department for the financing of the agricultural sector were to be established. The question boils down to one thing, and the hon. member for Malmesbury put it to us very clearly: How does the farmer obtain and retain his independence in spite of the present rates of interest? This is the question: How is it possible for anybody to farm these days with the rate of interest that has to be paid? There should be assistance from the State so that the farmer can develop his own capital by means of his farming operations, which should then be retained within the closed field of agriculture. If we cannot obtain the capital to assist the farmer in one way or another, the burden will be placed on the State to pay out subsidies to the consumer on a large scale. At the present rates of interest it is impossible for us in South Africa to produce food at a price which the consumer can afford. It is absolutely impossible. Therefore the motion which is before the House is in the very best interests of the agricultural industry and of the population as a whole.

†It comes down to the problem of the capital structure of agriculture. Earlier on today the hon. the Minister mentioned the fact that big companies, e.g. Anglo American, who had gone into agriculture on a large scale, were now pulling out. The financing of agriculture by big companies is a very important factor. Not only is financing by big companies important, but also financing by people with a lot of money, people who earned their money outside agriculture. I wonder whether we have considered enough what is, to my mind, one of the most inflationary factors in the financing of agriculture, viz. people who have money earned outside agriculture and who invested part of their money in agriculture for the tax benefit they derived from losses on agriculture, set off against their income from other sources. Anybody who knows anything, for instance about the production of vegetables, will know—I have been concerned with that for years and remember the finding of the SAPD, the co-operative which was designed to bring all farmers together to ensure that vegetables would be produced and marketed in a rational manner, etc., to help the farming community—that it failed completely. The housewife in this country today eats vegetables at the expense of farmers who go broke or who are losing money by producing vegetables. I do not think that we have paid enough attention to people who can afford to lose money in agriculture because they can offset losses against something else which is outside of the agricultural sphere.

I believe that this is one of the problems which we shall have to look at, because at a rate of 15% interest one simply cannot produce food at a figure the housewife can afford. It is impossible, and one wonders whether we are going to reach a stage where there will be a closed capital pool inside agriculture, incorporating all the bodies concerned with agriculture, which will perhaps have to be supplemented by the department or by the State. However, we shall have to isolate the capital market, as far as agriculture is concerned, from the normal market rate of interest. That is the problem the hon. the Minister has got. How is he going to do this? We have the Land Bank today, which puts money in at a low rate of interest, and we have Agricultural Credit doing so at an even lower rate of interest. One of the problems, however, is that both those departments are being used today as rescue operations. There is the case of the perfectly ordinary farmer, a man who is economically sound, who may need money to expand because he has a bad harvest. This man has to find money immediately to carry him over the period of the next few years. As the hon. member for Bethal quite rightly said, short-term money suddenly becomes long-term money, and the perfectly ordinary farmer, who has a sound capital base, may have to go into debt at the rate of 12% and 14%, and this may render him no longer capitally sound. I do not think we have yet reached that plane of thought that we are going to have to reach, where the influence of the State, and the amount of money made available to farming, becomes much greater and goes beyond what I regard as rescue operations by Agricultural Credit, and to an increasing extent today by the Land Bank. I think that we are going to have to look at this very seriously indeed, because, as the hon. member for Heilbron mentioned there is a distortion in the capital market. The whole business of financing agriculture is totally distorted. The banks and ordinary private investors simply cannot afford to support agriculture by loans and this kind of thing, because inflation simply makes it impossible to pay off the ordinary commercial loans which have been undertaken by farmers. This has made farming not only a bad risk, but an almost impossible risk. The problem is that it destroys confidence in the whole of the farming operation as a business risk. I think the question raised by the hon. member for Newton Park about a department of agricultural financing is, one we are going to have to consider. I would welcome an assurance from the hon. the Minister that he will at least give serious consideration to this. Perhaps some kind of investigation could be undertaken.

Under which Minister, the Minister of Finance or the Minister of Agriculture?

I think it must come under the Minister of Agriculture, because, with all due respect to the hon. the Minister of Finance, at the head of affairs one needs a farmer who understands the particular concerns and problems visited upon farmers from time to time. One of the problems, of course—and we had the question this morning—is why the price of agricultural land is getting higher all the time. It is because people are buying it as a hedge against inflation. Another problem is that so much big money from outside farming is going into farming as a hedge against inflation. As I have said before, people are not particularly concerned with the actual return they get on their money. They invest it for the good name they get. One must confess that people living on farms have a very reasonable way of life. It is a wonderful way of life, and at the same time they can invest as a hedge against inflation to protect the price of their money.

One of the bulwarks of capitalism is landholding, but the ordinary independent small landholder today stands in very great danger of disappearing from the scene. I think we have to take the most serious cognizance of this fact. We had a debate on it only this morning. The hon. member for Newton Park was talking about the presence of White farmers on the land being the best guarantee of security for White civilization, the Black man and everybody else here in South Africa. I think we must have a very good look at the financing of this industry. The hon. member’s motion does read that there should be suitable financing to increase production. The hon. member for Orange Grove mentioned research. I heard the other day that where one has a grain crop, which produces a certain amount of protein for human consumption, there is thrown away, in the leaves and stalks of that particular crop, seven times the crop’s protein. This protein would be available if it could be recovered by technical processes. Seven times as much is thrown away in the stalks and leaves of the plant, as is available for use in the grain. These are the things we are going to have to take very serious cognizance of. I have raised the question of fattening cattle before, and want to know how long we can continue fattening cattle by feeding them grain when we have a population which is expanding and making demands on that very same source of grain. How long is red meat still going to be even a proposition for us here, and not only here but all over the world? We have spoken a lot about the agricultural planning council and the use of water. Recently there was a survey conducted in my constituency about whether one should plant timber or sugar. Which is of maximum benefit to the country—with the use of water now—timber or sugar, sugar which is an export crop, or timber which saves on imports. It was calculated that to plant timber is nine times more advantageous to the local economy of our country than to plant sugar. This is the type of problem one has to face in the agricultural industry, and I think it requires closer investigation, closer planning and detailed attention.

I welcome the chance to take part in a debate like this. One has so very few minutes in which to take part, but I welcome the chance to do so. I would like to commend the hon. member for Heilbron for introducing the motion. I also commend to the hon. the Minister the amendment which has been put forward by the hon. member for Newton Park.

Mr. Speaker, I listened with great interest and very carefully to the speeches we heard this afternoon during this very important debate, and I must say that I found them very interesting. I want to extend my heartiest congratulations at once to the hon. member for Heilbron, who moved this important motion, not only on the motion but also on the way in which he moved it, especially with regard to the necessity of suitable financing, aimed at combating inflation and at the same time increasing production. The hon. members who participated in this debate will not take it amiss of me if I am unable to refer to everyone individually, although I nevertheless hope to be able to deal with their respective contributions here and there. I was really impressed by the standard of this debate. It is certainly not necessary for me to talk about the importance of the agricultural industry here this afternoon, because I think that this is generally accepted. However, I should just like to say that the agricultural industry is the largest employer of labour in the country. It is by far the largest provider of employment of all the sectors of South Africa. Another important criterion of an industry is whether it earns foreign exchange. The agricultural industry is one of our major earners of foreign exchange and it will continue to be so to an increasing extent. One must also look at the product—food—which is being made available to the public here. It is absolutely essential for man’s survival. Therefore I want to raise an important point today, and I want to put the case very clearly so that everyone may know how I feel about it. I regard the agricultural industry, seen as a whole, as the most important single industry in the Republic. It is the most important industry in the economy. This is my approach in the discussion of an important motion like this one. The development of agriculture has a very long and honourable history in South Africa. The financing of the industry was undertaken on a reasonably broad basis in earlier years, but as the need for an organized and specially adapted system of financing at a reasonable rate of interest revealed itself more and more in the farming industry over the years, the demand for financing through the Land Bank and the Department of Agricultural Credit and Land Tenure increased systematically.

I want to come at once to the amendment moved by my friend the hon. member for Newton Park. In all the years that I have been in this Parliament, the hon. member for Newton Park has moved similar amendments.

Never say die!

For years he has been advocating a separate Department of Agricultural Financing. He does not, however, always give the same reasons for his proposal. This time he emphasized the matter of the settlers near Kimberley who had suffered losses because of the flood-waters. I can assure the hon. member that we shall look after those good people—and also after others who have suffered losses as a result of floods or other disasters—as this Government has always done. There will be money available for this. In my opinion, however, this does not justify this amendment. The hon. member said that it was not enough to say “this House takes note”, which is the wording of the motion. I must say that I find it very difficult to understand that argument. Here is the hon. the Minister of Agriculture, here am I, and there is the hon. the Deputy Minister of Agriculture, other Ministers and members of this House. When a motion such as this is moved, we do take note, but we do not simply leave the matter at that. A motion such as this is too important simply to be discussed here and then forgotten. Of course we shall take a motion like this further. I therefore do not believe that this is an argument which justifies an amendment of this type. The vital question to me is why the hon. member for Newton Park now wants to take a retrogressive step. He actually wants to go back 64 years, because he now wants to return to the system which we had prior to the establishment of the Land Bank. He wants to go back to the years prior to 1912. There was such a department at that time. The financing which is now undertaken by the Land Bank was in fact a function of a Government Department at that time. Sometimes our ancestors have more wisdom than we do.

You’re telling me!

Yes, that goes for the hon. member as well; not only for us. My hon. friend must not think that he has the monopoly when it comes to wisdom. In any event, our ancestors deemed it fit to establish an institution—a State Corporation, a Land Bank—and this was one of the most important decisions which they probably could have taken as far as the advancement of the agricultural industry in this country was concerned.

For a few moments I should like to concentrate on the Land Bank, this very important State Corporation, because in my opinion this is where the very crux of the dialogue on agricultural financing is to be found. In a private initiative economy such as ours, any farmer is free to obtain his capital requirements wherever he may think fit. I want to agree with what some hon. members have said—I am thinking here specifically of the hon. member for Bethal—when they referred to the important role played by commercial banks and certain other financial institutions. By far the most important institution in this respect is, of course, the Land Bank.

†Now I just want to refer very briefly to the short, clear speech by the hon. member for Mooi River. I doubt very much whether the solution to the very important issue raised here today, i.e. the financing of farming in South Africa on a reasonable basis and on a sufficiently large scale, can really be found by trying to isolate the whole agricultural activity, in particular the capital market. I think the economic history of the world shows that by trying to isolate certain sectors from the broad trends of the economy as a whole, in fact causes more distortion than any possible benefits. I think that what the hon. member was obviously emphasizing was that perhaps in that way one would get a greater concentration of attention on these problems. However, let me say at once that the House should have no illusions about the seriousness with which the Government views this matter and the attention being given to it. I want to assure the hon. member for Mooi River and others that the Department of Finance and the Department of Agriculture—in the persons of my hon. colleague and I—have a very close working arrangement as far as these issues are concerned, very close indeed. I do not think it could be better, and I am very pleased that that is so. This close working arrangement will certainly continue while I have the honour to occupy my present position and, I know, while he occupies the position he does with such distinction.

*At the time of its establishment in 1912 and for several decades after that, the Land Bank was entirely dependent on Parliamentary appropriation for its capital. In the nature of things adequate funds could often not be made available and this was one of the major problems. For that reason, amongst others, the Land Bank was established in 1912. Originally the Land Bank could not obtain sufficient funds in this way, i.e. through vast Parliamentary appropriation of capital. Then serious consideration was given to the question of how an improvement could be effected. The turning point actually came in 1959, because in 1959 the Land Bank Act was amended and the Land Bank was empowered to raise money for its activities by means of bond issues on the capital market. This was a particularly important decision. In the same year—in 1959—the Land Bank drew R30 million in new capital with its first bond issue which enabled it to grant no less than 7 657 long-term loans totalling R63 million to individual farmers in that year alone, as compared to the previous highest amount of only R10 million in the previous year. Since 1959 the Land Bank has raised a total amount of more than R1 000 million by means of bond issues on the open market and R446 million of this is still in use today. If this specialized, efficient institution, the Land Bank, with its highly qualified staff which has gained much experience over the years in this sphere, had not been established, would a Government Department have been able to make capital available to farmers on a scale approaching anything like this? This would been impossible. A Government Department cannot do bond issues on the scale on which the Land Bank is doing it at present. I think one should keep this in mind.

I do not want to bore hon. members with too many figures and I have only a few more minutes available—my friend, the hon. the Deputy Minister of Agriculture will also participate in this debate—but I want to quote a few more figures nevertheless. In 1960 the Land Bank made available R35 million in the form of long-term loans and in 1975, fifteen years later, it made available R77 million. What is the position in respect of medium-term loans? As the hon. member for Bethal rightly said, this is a very recent development in methods of financing and what we have done in the last few years in this sphere, is also very important. In 1960 medium-term loans to the amount of R9 million were granted and in 1975, R17 million. Now we come to the short-term loans which in the nature of things, are very important. In 1960 short-term loans to the amount of R132 million were granted from all applications received. In 1975, 15 years later, R1 558 million was granted. This is truly something which we should keep in mind. Over a period of 15 years short-term loans have increased from, say, R130 million to almost R1 600 million. If one takes all loans, excluding loans to co-operative societies, one finds that in 1960 loans totalling R176 million was granted and in 1975 loans totalling R1 652 million. I ask once again: Can one conceive of any other body or institution which can cope with financing on this scale at present?

There are a few other matters on which I also want to touch. I am very pleased that the hon. member for Malmesbury made it very clear today what a very important role the co-operative societies were playing as sources of finance for farmers in their activities. As far as the Land Bank is concerned, during 1960 it received applications for long-term loans to the amount of R672 000 from co-operative societies and control boards of which R631 000 was granted. In 1975 these applications amounted to almost R22 million of which approximately R16 million was granted—as against approximately R600 000 of 15 years earlier. One could continue to supply all these figures, but I do not want to say too much about this.

I want to refer briefly to the question of rates of interest, because this is very important. This is a matter on which the hon. member for Mooi River also touched amongst other things. In past years, the Government has made appropriations from the Loan Votes to the Land Bank’s capital funds at very low rates of interest for the very purpose of enabling the Bank to maintain its normal conservative rate of interest in the financing of agriculture, in spite of the upward trend we have been experiencing in past years, and, especially in the past two years, in the rate of interest pattern. Whereas the bank rate was increased in January 1974, the Land Bank did not increase its interest on loans to farmers. Only after that, when there were increases in the bank rate in August 1974 and again in August 1975, the Land Bank had to make certain adjustments. Hon. members will know what the rate of interest on commercial loans is today. The Land Bank’s rate of interest on short-term loans to agricultural co-operative societies and control boards is 8,5% per annum at present, while the rate of interest on short-term and medium-term loans to individual farmers is 8% per annum.

Finally I want to say that, in my opinion, the South African farmer does not have a better friend than the Land Bank which is a State institution. I think that the few facts which I have mentioned here, prove this. Let me just say that the Government, the hon. the Minister of Agriculture and I myself will continue to do everything possible to look after the interests of our farming community at all times, because we realize the importance of this matter.

Mr. Speaker, it was very nice to see the hon. the Minister of Finance take part in this debate. Now I have an idea why the hon. Minister did not take part in the Durban North by-election. He probably has ideas of fighting a farming seat now. Who knows, he may be the next member for Vryheid or Zululand.

I do not understand the hon. the Minister’s logic when, referring to the institution proposed by the hon. member for Newton Park, he said it was rejected in 1912 and that our forefathers therefore showed a great deal more wisdom than we did. Conditions then were certainly not the same as conditions now. Such an institution may not have been suitable then, but we consider it suitable now. The S.A. Agricultural Union has also asked for it on subsequent occasions.

We agree that the finance of agriculture should be as cheap as possible. There can be no doubt about that and I am sure no one would wish to argue the case. In this regard we should like to point out that the 2½% subsidy that was granted on loans made by recognized financial institutions, is no longer effective today. Those interest subsidies which were granted on loans that carried an interest of say, 8½% or 9%, today apply to loans carrying an interest of 14% to 15%. We should like to ask the hon. the Minister of Finance and the hon. the Minister of Agriculture to consider the possibility of raising this figure. At the same time, if this figure were to be raised, I should like to ask whether some thought can be given to the possibility of stopping these institutions from also raising their interest rates immediately.

I should like to point out that there are other farmers beside the farmers involved in borrowing these large loans. To these other farmers the matter of financing is perhaps not a first consideration. There are many other factors that have caused the costs of production in farming to be raised, factors to which the Government could attend. I should like to point out that these factors also contribute to higher production costs. Let me just mention a few of these factors in passing. The hon. the Minister of Agriculture has a unique outlook on the solving of the problems of higher production costs. I should like to quote from a speech he made at Overvaal when he spoke of higher production costs. On the occasion he said—

But you tell them it is the Government’s fault.

No, we do not tell them that.

†I want to say emphatically that we in the United Party are very fond of the hon. the Minister of Agriculture and his department. During the recess I went from meeting to meeting defending this hon. Minister and his department when I found my farming constituents becoming obstreperous. By the same token, however, I went from meeting to meeting defending the farmers when the townsfolk became obstreperous. The townsfolk say to me: “Look at the farmers all getting rich. They drive around in big Mercedes Benzes just like Cabinet Ministers while we cannot afford to buy food.” [Interjections.]

Mr. Speaker, we admit that the factors affecting agricultural costs are common to many sectors of South African industry. The question could be asked why we feel that the farming sector should be favoured above other sectors. The answer to that has been given several times today. The hon. the Minister of Finance has just given it again. The answer is simple. I feel, as do all of us, that food is more important than arms. Our first defence is food. If we cannot feed our people, it is no good trying to fight anyone else.

I should like to mention just a few of the causes of inflation as we, the small farmers, see them. The first, of course, is the question of imports, which has already been mentioned in this debate and has, in fact, been discussed the whole of this week. I must say that this matter baffled me completely, because we have been told by the hon. the Minister of Finance that devaluation was to the advantage of the South African farmer. One wonders how it can be to our advantage when agricultural machinery and the spares for that machinery are becoming more and more expensive. Farm requisites such as medicines and drugs, as well as many other things that are imported, are becoming more and more expensive and beyond the reach of the normal farmer. I should like to say that we feel the Government can do something in that regard. I feel that the high import duties on farming equipment should be removed or reduced a great deal. An exception should be made in respect of the importation of farming goods, including spares. While we have the opportunity of paying lower prices because of the recession overseas, spares should be imported to a greater extent so that a store of these goods can be built up. Mr. Speaker, it was possible only recently to import steel at a lower price than the steel produced at Iscor costs. Why could we not have stockpiled steel at these low prices, instead of stopping its importation? I am not an economist, but to me this is common sense, because when the price goes up and we are short of steel, we shall have to pay higher prices.

Another factor which is pushing up the cost of farming is, of course, the cost of ground. We were asked today why we blame the Government for the increased cost of ground. The answer is simple. The consolidation plan of this Government has forced up the price of farming ground, has made farmland scarce, has caused farms to lie idle, and, in the case of farms which are producing, has caused them to be quite inefficient. The cost of housing for farm labour is another factor. In Natal a great deal has been done in respect of housing for farm labour, but we feel that the standards laid down in various areas are completely beyond what is required. In my particular area, for instance, ablution facilities in the Native compounds have to have white glazed tiles. I am certain that it is possible to build adequate ablution facilities and eating houses without having to glaze the walls.

Another factor is the cost of farm requisites. Much was said at the last meeting of the S.A. Agricultural Union about the price of fertilizer. It was felt that the four firms producing fertilizer are in a combine and that they are taking the farmers for a ride. There is also a lot of unhappiness about the export of phosphates. It is said now that we are going to export phosphate fertilizers over the next 10 years to the extent of about 1¼ million tons. The price of phosphates has gone up overseas from about $41 per ton to nearly $300 per ton at present, and we will one day be buying back the very phosphates to produce our fertilizers. It is these things which we feel are causing inflation.

Mr. Speaker, I could hardly have imagined bearing in mind the fact that I have been in Parliament for ten years now, that I would experience a day like this, a day in which two very positive motions were debated for a full sitting-day. To begin with I want to thank the hon. member for Heilbron who introduced the motion, and then, too, all the members who took part in the debate. In the second place I also want to thank the hon. member for Newton Park, who did everything in his power to differ from us a little. But since all he did was drag out the old story of the agricultural planning board, we shall excuse him, because we believe that in fact he will still support the hon. the Minister as he promised to do this morning. We also want to thank the hon. member for Mooi River for his positive contribution. He was very serious about it and it was a very sound contribution. All these members have already been replied to by this side, and I must refer to the solid contribution by the hon. member for Malmesbury, a contribution which was undoubtedly appreciated by most members. The hon. member for Bethal, too, made an exceptional contribution in his usual thorough way. I should like to thank all of them.

Since at the end of the day I have an opportunity to say a few words, I want to avail myself of the opportunity to tell all the bodies and persons for whom it is a serious matter to report on the events in Parliament from day to day—and that, of course does not exclude the Press—the members of the House who are interested in agriculture, news media and radio and television, that today they have had the opportunity of listening to an agricultural debate in depth. Many facets of agriculture were discussed here today in a manner worthy of the House. If the news media want to do their duty towards agriculture, too, then they have had the opportunity today to take due cognizance of the standpoints raised in today’s debate. If what was said here today is distributed by the news media, they will be performing a service to our country. Food is so important today that I want to go so far as to say that whereas it can often be seen or felt nowadays that agriculture is not really newsworthy, I foresee the time when people are going to prick up their ears at the sound of the word “food”. I do not want to be pessimistic. On the contrary. I regard myself as one of the optimists. The role played by research was rightly raised by the hon. member for Orange Grove, and although I have grave doubts as to his knowledge of farming, nevertheless his contribution was a solid one. I suspect, after listening to the hon. member for Bryanston, that they consulted the same source. Nevertheless they really made a sound contribution, although I had the feeling that they were not really at home in this field. But as I say, I was very impressed by the contribution made here by the hon. member in regard to the role played by research. I want to emphasize that we in this country are today in the position where the farmer will be able to provide ample food for this country as long as the finances are available and as long as the stakes are raised. There is no doubt about that. If I have interpreted it correctly, this was more or less the underlying theme, the thinking, behind every speech made today in this debate.

I do just want to refer briefly to the two legs of this motion. In the first place I should like to refer to inflation, because I believe that this is important. Because I have only a few minutes at my disposal and because I have already had to discard most of the good points I wanted to make, since they have already been mentioned, I shall only refer to them by way of summary. Basically, there are two aspects of the combating of inflation. On the one hand, an attempt is made to achieve a higher degree of efficiency in order to produce at a lower unit cost. Surely that is quite obvious. On the other hand, expenses must be reduced by limiting expenditure to essentials and by delaying other non-urgent and non-essential expenditure. I think that this is a neat summary and that it defines the situation very clearly. On the production side, the Government has always endeavoured to make economical farming units available to farmers by way of research and extension programmes and agricultural financing, in order to promote efficiency in agriculture. This is the endeavour of the Government and I believe that we are all agreed on that score, despite the few points of criticism raised here in the debate. Although all possible efforts have been made to cut Government expenditure, these measures do not apply in the case of essential services and services with specific purposes, whether it be research, extension or financial assistance.

At the moment the Government is introducing a system of target budgeting. Among the points of criticism raised here by certain members of the “these benches” party, was that the departments could still save here and there. This system is aimed at evaluating the utilization of funds and in addition, relating them to priorities in regard to research and extension in agriculture. In my opinion this is a very important step in the right direction.

It is hoped that in terms of this policy more attention will be given to the basic problems of agriculture. As far as financing is concerned, the judicious utilization of funds in order to promote production is given special attention. Here, too, higher efficiency and the lowest unit cost are aimed for. Interest subsidies, the provision of funds for the storing of grain and for the training of farmers, are further measures calculated to bring about cost savings for the farmer and promote higher productivity.

As far as farming requisites are concerned, the policy is to exercise control over the prices of these things, for example in the case of fertilizer, diesel oil, certain packaging materials, cattle fodder, etc. Furthermore, transportation rebates are granted on certain fertilizers.

A further point I want to discuss is research. Research is also aimed at money-saving measures on the farm. The agricultural engineering division of the Department of Agricultural Technical Services pays special attention to rationalization of the utilization of agricultural implements in order that they may be utilized efficiently. Close contact between this division and the Import Control Board has resulted in the importation of a variety of agricultural implements being limited as far as possible. For example, since 1961 the number of makes of tractor has already been reduced from 34 to 14 and the number of models from 200 to 100. This is an exceptional achievement, and if we can continue in this way and in other facets of the national economy as well, then we may as well do so, because a drop in production costs inevitably follows.

This division has also given intensive attention, over the past year in particular, to the planned use of labour and implements, which together are responsible for approximately 60% of the farmer’s expenditure. In this regard, too, the Government has decided to assign eight training centres—and the hon. member for Orange Grove said that nothing was being done—to the agricultural industry, the first of which will be opened near Potchefstroom this year. Then, too, there is the training centre for Coloureds at Kromme Rhee. Taking into account these training centres, which are supplementary to those which already exist, special attention will be given to the training of farm labourers who have to handle mechanical equipment. This is a tremendous forward step, and in my opinion will satisfy everyone.

In addition, the division has recently given intensive attention to fuel conservation measures on the farms. An enormous task has been performed in this respect, and it is already paying dividends. On the marketing side, positive efforts have been made to combat inflation. Approximately 83% of agricultural production is marketed under the Marketing Act and a further 8% under specific legislation. Various boards have already effected savings without derogating from efficient marketing. In addition, various boards have made a positive contribution towards the combating of inflation by not insisting on full price increases for their products. I can only consider this to be an exceptional contribution on the part of the farmer.

It must be borne in mind that injudicious financing is one of the evils which promotes inflation. This is a very important aspect. That is why it is the policy of the Government to give attention to essential and purposeful financing, often indirectly, in order to allow normal agricultural development to continue at all times.

I still have a few minutes left and I should like to say a few words about productivity. The Government is in fact well aware of the importance of food production in the Republic, particularly in view of the factors mentioned in the motion. That is why constant attention is being given to the judicious exploitation of natural resources and to increasing the efficiency of agricultural production and marketing. I realize that the enormous amount of energy our officials have put into this has already yielded such results that owing to the fact that the yield per morgen has increased by so much, it has been possible for the boards and the Government to make downward adjustments in the prices of commodities. In this regard I want to mention one exceptional achievement. This concerns a scarce type of fruit which is not really of particular importance, but concerning which the results have been so phenomenal that it can in fact be regarded as an ideal to strive for. The fruit in question is the strawberry. Merely by making the strawberry planting material virus-free, it was possible to boost the yield to 40 tons per hectare. In the normal course a yield of 20 tons per hectare is regarded as an exceptional achievement. This increase was brought about merely by making the virus-free material available, something which can of course be done as a result of research. This is a pattern we should like to follow. We want the results to filter through to the farmer so that we may combat inflation in that way. I think that this is one of the most effective ways of doing this and, what is more, of utilizing the available land more intensively—it is limited in South Africa and can only be extended through water conservation and which, as far as we can see, may reach saturation point by about the year 2000. We have no choice but to bring about higher production per hectare or unit, or else we shall not be able to feed the nation, and we shall in fact to able to do so if we operate in this way and if we provide our farmers with guidance so that they have the knowledge, as is the case today, and if we can influence all the other facets of society with a bearing on agriculture to co-operate. Finally, we must be able to persuade the consumer to be willing to pay a higher price for the sake of his own continued existence, and so that the farmer will be able to produce.

I want to conclude with this very sound quotation: “In times of hunger, people sell gold to buy food, if they have got the gold.” To me, this sums up the situation in the world today, particularly in Africa. If we have the gold, we shall in fact be in a position to produce the food, but it will be at a premium. Let us have no illusions about the fact that this is the direction in which we shall have to move, and let us believe that we shall succeed in this.

Business interrupted in accordance with Standing Order No. 34 and motion and amendment lapsed.