WHILE some work is needed to further expand South Africa’s agriculture sector, access constraints to some export markets continue to present a threat to its growth, according to Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo.
The agricultural organisation was reacting to the Department of Agriculture, Land Reform and Rural Development’s budget vote speech and the signing-off of the Agriculture and Agro-processing Master Plan last week.
Agbiz said work was needed to be done as regards biosecurity, agricultural finance and climate resilience, as well as locust outbreaks.
Regarding the blended finance instrument, Sihlobo said the budget vote speech noted that "the department had transferred R400 million of the committed R1 billion grants to the Agri-Industrial Fund as per a memorandum of agreement with the Industrial Development Corporation".
Agricultural finance was key to boosting inclusion and bringing a new crop of black farmers into the commercial scale.
“However, these funds are rather limited if you want to make a major difference in inclusive growth,” Sihlobo said.
More focused and bolder allocations for blended finance instruments would be instrumental in implementing the Master Plan.
Sihlobo said that, as was typically the case, the budget vote speech for 2022/23 contained a round figure of R17.3bn for the department. This figure included an allocation for the provincial departments of agriculture, and for agricultural entities such as the Agricultural Research Council and the National Agricultural Marketing Council.
Sihlobo said the budget vote speech also gave the sector insight into the department's policy focus, which were areas that would likely use a sizeable portion of the allocation.
“To this end, the speech focused on climate resilience, agricultural finance, biosecurity, locust outbreaks, the hemp industry and market access.
“The positive outcome of the signing-off is that all key stakeholders, except labour, supported the plan. The hope is that labour will join in the subsequent phases. The country is now moving towards the next step of the Master Plan, which includes its practical implementation,” Agbiz said.
The first step was for the government and the private sector to have provincial sessions communicating the Master Plan and ensuring a common understanding of the interventions outlined in it and the allocation of responsibilities.
It said that the planning happened in Pretoria, but the implementation was at the provincial and municipality levels.
Agri SA executive director Christo van der Rheede said they welcomed the signing of the Master Plan.
“This occasion marks the culmination of years of negotiation and consensus building throughout the sector and is a testament to our shared commitment to the success and growth of this crucial sector,” said Van der Rheede.
The plan took a holistic view of the sector and addressed wide-ranging issues, from land reform and infrastructure to working conditions on farms and social security for workers.
He said the interventions of the plan would be divided into six pillars, which were: resolving policy ambiguities and creating investment friendly environment; investing in and maintaining an enabling infrastructure critical to industry; providing comprehensive farmer support; improving food security; facilitating market expansion; promoting trade and improving localisation; and reducing imports.
Van der Rheede said they were pleased by the Master Plan’s commitment to raising an estimated R9.4bn to address infrastructure constraints, and we are encouraged by Minister of Agriculture, Land Reform and Rural Development of South Africa Thoko Didiza’s commitment to work with the sector and other government stakeholders to address this pressing issue.
“Agri SA is, however, mindful that the Master Plan is a theoretical framework and a work in progress. Several aspects of the plan will require further engagement and negotiation, and none of them can be achieved without commitment and collaboration, Van der Rheede said.
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