ICYMI: These agri policy discussions will dominate 2022

The implementation process of Mzansi's Agriculture and Agro-processing Master Plan is set to dominate policy discussions this year, predicts Agbiz chief economist Wandile Sihlobo. The debate on land reform is also still firmly on the agenda

What does South Africa's agricultural policy landscape for 2022 look like? Supplied/Food For Mzansi

The implementation process of Mzansi's Agriculture and Agro-processing Master Plan will dominate policy discussions this year. Supplied/Food For Mzansi

The likelihood that Mzansi’s master plan for agriculture will be launched within the first half of this year, is high. According to chief economist of the Agricultural Business Chamber of South Africa (Agbiz), Wandile Sihlobo, what this means is that discussions of the policy process will dominate for most of 2022.

In his weekly newsletter, Sihlobo pointed out that the success of the implementation rests on the buy-in of all social partners.

While the Agriculture and Agro-processing Master Plan process has primarily been discussed at a national level, the real work will be in how the implementation is executed at provincial and municipality level.

“The priority for the government should be to ensure that those local structures have a similar understanding of the division of responsibilities and vigour to implement as the national department, which has led the discussions with social partners,” Sihlobo cautioned.

According to the economist, this is particularly important considering the dysfunctional state South Africa’s municipalities finds themselves in, a dysfunction he believed to be increasing. This, however, adds a cost burden to the agribusinesses in some towns which have assumed public responsibilities such as road maintenance and water supply.

Trade also high on agriculture policy agenda  

On top of this, the debate about the improvement of local governance could also be prominent in policy spaces, predicted Sihlobo.

Wandile Sihlobo, chief economist at Agbiz. Photo: Supplied/Food For Mzansi

This is because many experts believe that local government’s inefficiencies present a risk to the agribusinesses, broader agriculture and other sectors of the economy and is therefore considered a key area to watch this year.

“It also dovetails well with the poor roads’ infrastructure, which is an additional cost burden for agribusinesses, as some commodities are heavily reliant on roads. Consider the grains and oilseeds industry. In this subsector, roughly 80% of the produce is transported by road,” Sihlobo said.  

On the trade front, for South Africa’s agriculture and agribusiness the major focus is opening export markets to various countries such as China, India, Bangladesh, Japan and Saudi Arabia, amongst others, Sihlobo highlighted.

According to him, the balancing act from South African policymakers will be in attempting to widen the export market even while domestically focused on the localisation policy.

“Other countries that will want reciprocity could find the South African approach unfriendlier,” he cautioned. “This trade policy focus will likely tie up with the logistics challenges, specifically the rail and port efficiencies.”

Government could increase the security focus on the vandalisation occurring at Transnet infrastructure, Sihlobo believes.

“But the collaboration with business in ports facilities will most likely remain an important focus this year as Transnet has already signalled its openness to such discussions.”

Land reform discussions to continue

The big agriculture policy debate, of course, is the discussion on land reform which will remain part of the policy discussion this year, Sihlobo wrote.

First, the Land Reform and Agricultural Development Agency could be launched within the first half of the year. This is another crucial area that the private sector might have to collaborate with the government in towards implementation, Sihlobo said.  

Secondly, the governing African National Congress (ANC) will have its policy conference this year.

“One of the contentious issues that emerged from the last conference was the adoption of a policy resolution of expropriation of land without compensation, with specific qualifications, such as ensuring that the policy doesn’t negatively affect the economy and food security at implementation.”

The ANC is likely to revisit this discussion at its policy conference later this year after failing to amend the Constitution to expressly allow for land expropriation without compensation. The failed result was widely celebrated.

Sihlobo believes the result of this policy conference is worth watching as it will have implications for the agriculture sector and agribusinesses beyond this year.

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