South Africa’s department of agriculture, land reform and rural development has put forward a budget of R17.3 billion. Delivering her budget speech yesterday (Thursday, 12 May 2022), minister Thoko Didiza said her department would use the coming financial year to empower citizens to participate in the agricultural economy, to ensure tenure security for all and to stimulate integrated rural development.
“Our interventions in policy, legislation and programmatic intervention must bring us closer in building an inclusive society, without leaving anyone behind,” Didiza said, and added that the country’s historic challenges of poverty, unemployment and underdevelopment should challenge her department to continuously find solutions.
She visited commercialisation of black farmers, hemp farming and blended finance as among the prominent issues to stimulate participation in agriculture, and listed climate change, biosecurity challenges, the global effects of the Russia-Ukraine war and disasters such as the recent locust outbreaks as challenges to overcome. She also reiterated her commitment to the empowerment of women in government’s quest to create an inclusive agricultural sector.
Moving on to numbers, Didiza said a sizeable portion of the R17-billion budget would be transferred to the provincial departments of agriculture, as well as agri-related entities. The following transfers will be made:
- Ilima /Letsema Conditional Grant – R610 million.
- CASP (Comprehensive agricultural support program) – R1,2 billion.
- CASP Extension Services – R304 million.
- Commission on Restitution of Land Rights R3,7 billion.
- Agricultural Research Council – R1,2 billion.
- National Marketing Council – R48,5 million; and
- Ingonyama Trust Board – R24,4 million.
Smaller budget, used more efficiently
“It has to be acknowledged that the department’s budget has declined in real terms for a number of years,” Agbiz CEO Theo Boshoff tells Food For Mzansi. “This is not surprising given the tight fiscal space that South Africa is in. That being said, it is also an opportunity to ensure that the budget is spent in the most cost-effective way on projects that will yield the greatest dividends. In this regard we will be watching the specific allocations closely in the coming weeks.”
He adds that Agbiz believes the budget must be used where it will have the biggest impact on unblocking bottlenecks that affect the private sector.
“This speaks to critical regulatory functions that are currently under-capacitated. The minister’s reference to biosecurity is a prime example, as modest investment to secure our biosecurity will unlock real growth in the livestock sector and hence repay the state through increased export and tax earnings.
We welcome the minister’s reference to improving rural roads. Expenditure on network industries is a real investment as it unlocks economic opportunity. We would, however, have liked to see more concrete commitments to the blended finance scheme as it has great potential to unlock inclusive growth in thee sector.”
Boshoff says it’s very significant that it coincided with the signing of the Agricultural and Agro-processing Master Plan (AAMP).
“We have been part of several previous processes where sound policy recommendations were made… but the AAMP is the first multi-stakeholder process to accurately quantify the investment needed into various catalytic interventions to unlock the sector’s potential for inclusive growth.”
On the land reform front, Agbiz says it welcomes pragmatic statements on communal property associations and the announcement of a summit on communal land rights. “Providing legally secure tenure to communal farmers should be seen as low-hanging fruit as it can unlock economic growth and investment through policy changes that are largely fiscal-neutral.”
Public-private partnerships
Speaking to Food For Mzansi, Nkanyiso Gumede, a researcher at the Institute for Poverty, Land and Agrarian Studies (PLAAS), says that a budget idea for public-private partnerships is a good one, but that the department will need to ensure that it maintains its presence and closely monitor such partnerships.
Gumede believes that power relations tend to tilt towards private sector partners who end up capturing most of the value. “Farmers will continue to suffer if support will not be crafted according to their needs and the challenges they face.”
Gumede feels that the budget failed to address the challenges of water and electricity within the agriculture sector.
“Some farmers are struggling with access to water… some are struggling with expensive electricity,” he says, and notes a lack of clarity on how the department would deal with these issues.
Another of his concerns is that no mention was made of the establishment of the Land Reform Agency which “has been touted as what will save the land reform programme in South Africa.”
Gumede believes it is important that the budget supports inclusivity and is more geared towards the poor and vulnerable.
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