Local government service delivery failures make agriculture suffer.
Weaknesses of the provincial government and municipalities undermine the Agriculture and Agro-processing Master Plan’s(AAMP) agenda of expanding agricultural output and resolving inefficiencies within the Department of Agriculture, Land Reform and Rural Development (Dalrrd), says Agricultural Businesses Chamber (Agbiz) chief economist, Wandile Sihlobo.
He said this also meant that the economic vision for South Africa that President Cyril Ramaphosa outlined is hindered.
“Therefore, the Presidency needs to increase its focus on monitoring the delivery by provinces and municipalities and work towards capacitating them speedily. Other industries like mining and automobiles also feel agriculture’s pains. Public-private sector partnerships can be considered to help tackle some of these challenges. The partnership modalities are outlined in various master plans and need commitment and effective leadership,” Sihlobo emphasised.
He said the services of existing small businesses that existed when large industries thrived also suffer due to the failure of governance.
For this reason, he said addressing local government failures should be a top priority for the Presidency in rejuvenating rural towns and communities that supported millions of people but were currently in despair.
South Africa’s agriculture has had a few excellent consecutive seasons. The current 2022-23 season was forecast to continue delivering solid growth again for the sector, although with variation across the different subsectors. Favourable rainfall and the sectors’ ability to cope with the ongoing and increasing load shedding crisis had significantly supported production.
This also meant the export performance would likely be robust, especially with a weaker exchange rate that made South African products more competitively priced in the global market, the chief economist said.
Agbiz said that this positive outlook and the previous years of strong performance that allowed agribusiness to support rural towns and communities had not motivated the provincial governments and municipalities to play a more helpful role in propelling the sector’s progress.
It said the challenges of deteriorating roads, water infrastructure, and rising crime dating back of the past years still persisted and, in some cases, had worsened. The summer rainfall that supported agricultural production was said to have also had the negative impact of exacerbating the damage to the already neglected roads.
Sihlobo said this was not a challenge faced only by large commercial farmers that served a broader clientele, but all farmers. “The emerging or new entrant black farmers, with limited financial resources face it more acutely.
A case in point is the Eastern Cape, where this past week, dairy farmers in the Ncorha area struggled to receive farm supplements, feeds, and diesel because of the poor state of the roads. At the same time, they couldn’t deliver their produce to the market. This has adverse financial consequences for farmers, workers and communities,” Sihlobo said.
He added that this challenge, however, was not isolated to the Eastern Cape but was found throughout the country.
“The roads across the rural towns of the Free State, North West, Limpopo, and KwaZulu-Natal to name a few are also poorly maintained and in bad condition.
Compounding this challenge is the reality that South Africa now transports over two-thirds of its agricultural produce by road, as rail transport has virtually collapsed.
This means the higher agricultural output without functional roads does not yield full financial benefit to farmers and agribusinesses, as some have to fund private construction at their own cost to maintain some roads.
This happens while the municipalities often have the allocated financial budget to cover their infrastructure needs but misuse the funds, as so often reported by the auditor-general.
Water was another aspect that various agribusinesses and farmers often raised as a challenge, both from a policy perspective and, more critically in terms of infrastructure maintenance.
There were examples of towns where agribusinesses have had to play a more active role in the water supply, again taking financial and human capital away from businesses to public services that municipalities should be delivering.
Agribusinesses and farmers had also seen a rise in corruption and crime, forcing commercial farming businesses to tighten security over the years at their own cost because of lawlessness in rural South Africa.
Harvest and livestock theft affected all farmers and were much harder for new entrant farmers without a strong financial position to invest in security and various technical solutions.
Again, tightening security came at a cost, with resources having to be shifted from more productive uses to cover for the government’s shortcomings.
Agbiz said collectively, these challenges highlighted the effects of weak governance across all spheres of government in South Africa.
It said that for agriculture, this was a challenging period as the sector was essentially dependent to an extent on the proper functioning of all these essential aspects to realise its full potential.
"Rural towns, which seriously need economic rejuvenation and employment will struggle to see meaningful economic change without improvements in governance, service delivery and security,” it said.
Sihlobo said South Africa faced a high unemployment rate, at just under 33%, in the first quarter of this year. “Resolving this unemployment crisis requires that all economic sectors perform optimally, especially the primary sectors, with an ability to absorb even the least skilled labour.
Agriculture is one such sector, while agribusiness and agro-processing also present various employment opportunities. But all these hinges on effective service delivery and functioning infrastructure, he said.