South Africa’s agricultural sector could have grown beyond what has been observed over the past decade if there had been no inefficiencies in state administration, infrastructure backlogs, a lack of security in rural areas and prevailing uncertainty, the Agricultural Business Chamber said yesterday. Picture: Henk Kruger/ANA/African News Agency
South Africa’s agricultural sector could have grown beyond what has been observed over the past decade if there had been no inefficiencies in state administration, infrastructure backlogs, a lack of security in rural areas and prevailing uncertainty, the Agricultural Business Chamber said yesterday. Picture: Henk Kruger/ANA/African News Agency

Agriculture growth is hampered by inefficiencies - Agbiz

By Given Majola Time of article published Jun 22, 2021

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SOUTH Africa’s agricultural sector could have grown beyond what has been observed over the past decade if there had been no inefficiencies in state administration, infrastructure backlogs, a lack of security in rural areas and prevailing uncertainty, the Agricultural Business Chamber (Agbiz) said yesterday.

The chamber’s chief economist, Wandile Sihlobo, said the current growth momentum in the country was not a development of the past two seasons only.

“If one casts an eye back to 2010, just two years before the official publication of the National Development Plan, the agriculture sector’s aggregate volume of production in 2020 was 19 percent higher compared with that year. This was spread across all sub-sectors - that is, horticulture, animal products and field crops - although at varying levels, with field crops having shown more modest growth.

“If there is one thing the sector could be faulted on over the past decade, it is that focus on the inclusion of new black farmers into the commercial level has taken somewhat of a back seat,” said Sihlobo.

He said although this might be true overall, some partnership programmes between the government, farmers and agribusiness had yielded positive results in integrating black farmers into commercial farming. From a policy perspective, he said that inclusion, in addition to growth, was an underlying theme in the government’s programmes, such as the Agriculture and Agro-processing Master Plan.

Sihlobo said the spread of Foot and Mouth Disease and African Swine Fever highlighted the significance of having an efficient and agile response mechanism to animal disease.

He said this matter had reached policymakers, and thus industry leaders and the government were working together to establish mechanisms to respond more efficiently. The enforcement of agricultural products standards and an inefficient staff complement were some of the issues that should be addressed to strengthen the state’s effectiveness.

Agbiz said the farming sector’s infrastructure challenges included poorly maintained road networks in the central regions of the country and almost non-existent road networks in the areas of the former homelands. These challenges have implications on market access for new entrant farmers, and increased transaction costs for commercial farmers. Inadequate water infrastructure in some regions was another challenge for the sector as was the need for a more agile management of water rights allocation.

Sihlobo said there was also the need for cost-effective and reliable electricity. The recent reforms in the energy space, with the government increasing the threshold for the exemption of licences for self-generation by companies to 100 megawatts, should help ease the energy constraints over the medium to long term.

Agbiz said South Africa was experiencing an increase in rural crime, which included stock theft, farm attacks, theft of cables, pumps, fences, and other vital equipment needed in food production and farming more broadly.

Agbiz said the uncertainty about the long-term policy was another factor that had to be addressed urgently.

“South Africa’s agricultural sector has expanded notably over the past decade and is currently having another strong season. However, there is still potential for further expansion in the future through the scaling up of underutilised land and the strengthening of various partnerships that could be formulated between new entrant farmers and existing commercial ones,” said Sihlobo.

The Agbiz/IDC Agribusiness Confidence Index reached a record high in the second quarter since its inception 20 years ago to reach 75 points from 64 points in the first quarter.

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