Photo by LOUAI BESHARA/AFP via Getty Images.
President Cyril Ramaphosa’s State of the Nation Address last week gave us some nutritious nuggets to chew on. Although South Africa’s agricultural sector has grown tremendously over the past three decades — more than doubled — it faces some challenges.
Some of the sector’s problems include port inefficiencies, deteriorating roads, rural crime and stock theft, rising global protectionism and inept municipalities. Ramaphosa outlined the government’s plans to address many of these in his speech.
The need for the professionalisation of civil servants, the planned improvement of water infrastructure, the simplification of regulations, ongoing reforms of Operation Vulindlela in the broader network industries, interventions on logistics and improving safety and reducing crime were some areas he highlighted.
The president captured the core of agricultural matters by stating: “By supporting our farmers, improving our logistics network and rural supply chains, and opening new export markets for products, we can significantly expand our agricultural sector.”
The aspect of opening new export markets is vital in the current environment of heightened trade friction. South Africa’s agricultural sector is export-oriented, exporting half of its produce, in value terms, every year. This keeps the existing markets at the forefront of my mind and widens South Africa’s agricultural exports to other countries.
The primary focus for agricultural market expansion should be through forming a Brics agricultural trade agreement — or any arrangement that addresses the higher import tariffs in these groupings.
Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh. Importantly, South Africa should not forget that the EU, Africa, broader Asia, the Middle East and the Americas remain valuable trading partners for our agricultural sector.
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I believe South Africa’s agriculture will see its gross value-added fortunes expand by 30% in the coming years, creating more jobs.
Still, I think the one fundamental area that the president should have highlighted is the urgent release of the 2,5 million hectares of agricultural land held by the state to appropriately selected beneficiaries, with title deeds.
The release of this land, combined with the reforms outlined in Ramaphosa’s address and the opening of export markets, would help us grow the sector and end the dualism that has made South Africa a “country of two agricultures“. Another vital intervention would be an increase in blended finance, which the Landland, and commercial banks run collaboratively with the Department of Agriculture, could provide.
The current disparity limits the agricultural sector’s growth potential and must be addressed urgently. The Agriculture and Agro-processing Master Plan outlines the appropriate approach for inclusive growth.
A more inclusive sector would have a much stronger shared vision and possibly grow faster. The land on the government books is one area where the inclusive approach could be initiated, including more young people and women and closing racial disparities.
Environment
Another point on which the president was silent, but which has been broadly discussed in agriculture is sustainability. You see, South Africa has already made inroads in improving the farming methods. We must continue caring for our farming environment to ensure the land sustainably serves the next generation.
Our efforts to improve farming methods will also provide continuous access to key markets such as the EU, where environmental issues in agriculture are becoming a big debate.
While agriculture only got a brief mention in the State of the Nation address, the president addressed the most fundamental matters.
Wandile Sihlobo is an agricultural economist.