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Abstract
The process of restructuring the agricultural sector in Southern Africa will require
a wide range of incentives and subsidies provided by agricultural policies. But it may depend
even more on certain preconditions which have to be fulfilled by general politics, e.g.
protection of human rights, implementation of democratic principles and abolition of racial
discrimination. Economic efficiency in agriculture and- what may be even more importantsocial
peace can only be achieved and maintained if all groups of farmers have equal access
to land, markets, education, technology, infrastructure, political measures, and the process
of policy-making from which decisions on agrarian institutions and policies derive (cf. Van
Zyl & Van Rooyen, 1990:1; Kassier & Vink, 1990:21). Recent experiences in Eastern
Europe have shown that large-scale agriculture based on a non-democratic system lacks
economic efficiency and social stability. Instead, in most industrialised states without central
planning, smaller farms integrated in a pluralistic political framework have become the
prevailing institutional arrangement in agriculture. According to Schmitt (1990:22), "the
dominance and persistence of family farms (in Western countries, K.H.) is explained
economically by flexibility and stability in resource allocation to farm and non-farm
employment as well as household production. Their economic superiority vis-a-vis large
farms employing hired labour or organized by producer cooperatives is explained by lower
transaction costs. Most likely, advantageous transaction costs of smaller family managed
farms are not outweighed by increasing returns due to economics of scale and size of larger
farms".