While many sectors are on their knees because of Covid-19, global conflict and rising operational costs, agriculture has remained resilient. It is because of this resilience – despite countless hurdles – that some believe government can boost farmers without turning to subsidies.
This month’s repo rate and petrol price increases were the latest factors to turn up the heat for farmers, reigniting the debate about similar subsidies to what farmers in foreign countries receive.
Agri SA economist Kulani Siweya says that calls for subsiding farmers had been a long-standing issue, particularly from organised agriculture. Yet, despite little to no support from government, the sector has remained competitive compared to its counterparts in the global market.
“The sector has remained resilient in difficult times, but more can be done. There are many practices from [elsewhere in] the world that could work in the South African context.
“We can look at the tax side of things, such as taxation laws. The government is currently in the process of amending the tax bill and one of the [plans] is to limit assets losses. That will be detrimental to the agricultural sector, given that the industry benefits from [it].”
Siweya says the Russia-Ukraine conflict has also sparked calls for the suspension of fuel levies – temporarily until the situation calms down. “That will be one of the ways government can support the sector to insulate and take some of the external shocks.”
Create a conducive environment first
Free State Agriculture operations manager Jack Armour says dependency on government might cause new control measures that could keep the sector from growing.
“Messing with the market is never a good idea. According to world trade organisation rules, you can subsidise inputs, but you can also protect local producers with import tariffs.”
Armour believes it is more important for government to create an enabling environment for farmers to conduct business, and for government to attract investment.
Key fixes would be roads, the unblocking of port bottlenecks, and paying for disaster repairs and losses to get devastated farmers back on their feet again.
“We need government to ensure that crime is dealt with, to reduce red tape such as the cost and risk of doing business,” he says. He also believes government needs to play a more critical role in controlling market collusion, price fixing and anti-competitive behaviour.
Small-scale farmers will welcome support
In the small-scale farming sector, subsidies might be welcomed. Northern Cape farmer Onthatile Nkunika says it will take time for her to be sustainable amid the rising costs of almost every input.
“Feed is becoming expensive, petrol is rising, livestock need medicine occasionally. It is going to be extremely difficult, going forward, to be a sustainable farmer in the rural areas. Everything is just so far.”
Farmers are trying their utmost to minimise costs and to come up with innovative ways to remain in business. These include partnering with others to buy feed in bulk. Yet, Nkunika feels that subsidising farmers on aspects like feed will go a long way in making sure that farmers remain sustainable and able to create jobs.
Still on the right track
Meanwhile, Siweya says farmers need to be aware of evolving sustainable farming practices. “Such practices are not only for suppressing the impact of rising costs but also for building resilience against other factors like global warming and climate change.”
He believes South Africa is still on the right track in terms of food security. “On a national level we are a very secure country. We produce enough for our own citizens and we still have enough to export to other countries. Our sector is very resilient to stand firm amid what is happening across the globe.”
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