Home Food for Thought Between the Headlines Mr President, here’s 16 tips for economic recovery

Mr President, here’s 16 tips for economic recovery

As the build-up towards President Cyril Ramaphosa’s next State of the Nation address begins, 16 agricultural experts list their wish-lists to move South Africa forward. Our question to them was simple: “If you had the power, what would you change immediately to lead South Africa and the agricultural sector to a brighter tomorrow?”

South African agricultural leaders and pioneers share their 2021 agri to-do list for government. Photo's: Supplied/FoodForMzansi

Dear Mr Cyril Ramaphosa

You might not be aware of it, but in the agricultural sector it is often said that our country would be in a better position if farmers ran it. Besides feeding the nation, they also possess a number of qualities that can move South Africa forward.

This includes their bold vision to build an inclusive and integrated rural economy, and a hunger for creating meaningful jobs. As you know, we now have an unemployment rate of about 30% with at least 11 million people of working age who are jobless.

They are growing tired and restless… Agriculture has a proven track record too. In fact, many South Africans are pinning their hopes on the sector to help lead our post-Covid-19 recovery. The sector posted double-digit growth, while the rest of the economy was reeling from lockdowns and other economic and political mishaps.

But, experts say, the agricultural machine needs to be oiled in order to unlock its full capacity to fully support government. As you begin preparations for your State of the Nation address next month, Food For Mzansi asked 16 experts for their top tips which you might want to consider. They are also eagerly awaiting the next budget vote speech of Thoko Didiza, the minister of agriculture, land reform and rural development.

Mr President and minister Didiza, our question to these experts simply was: “If you had the power, what would you change immediately to lead South Africa and the agricultural sector to a brighter tomorrow?”

Cheap imports and high input costs

Lunathi Hlakanyane, an agricultural economist with Stellenbosch University. Picture: Supplied

According to agricultural economist Lunathi Hlakanyane low-cost imports need to be high on government’s priority list as the competitiveness of South Africa’s agricultural sector, both in the export and domestic markets, hang in the balance.

One way of getting around this is by re-negotiating import tariff agreements, says Hlakanyane. Also, “other restrictive measures (should be) imposed on foreign goods as a strategy to adjust prices of imported products to levels that fairly compete with locally-produced goods.

“We need to design a series of strategic support programmes that provide much-needed institutional and technical support to farming enterprises, regardless of scale of operations.”

With reference to input costs, Hlakanyane believes there is a significant correlation between rising input costs and food price inflation.

“Therefore, it stands to reason that in order to increase food affordability to a population that is increasingly finding it difficult to access basic food items, input subsidies should be highly prioritised by agricultural policy.”

This, Hlakanyane reckons, will achieve the double-barrelled outcome of lessening food insecurity at a household level and decreasing farmers’ overall variable costs.

Recipe for successful land reform

Nick Serfontein, chairperson of the Sernick Group. Photo: Supplied

“It will be extremely naive to expect anything from government under the present circumstances and, in particular, considering the state of the ruling party,” says Nick Serfontein, a Free State farmer and chairperson of the Sernick Group.

The former member of President Cyril Ramaphosa’s panel on land reform and agriculture is of the opinion that the ANC never really took note of the agricultural sector, despite again having proved its worth in 2020 during the Covid-19 pandemic.

“There are many priorities, too many to mention, but the one that probably stand out is, successful land reform,” he says.

This, he says, is extremely important and has the best chance of success if the country’s commercial farmers of are involved.

“The recipe is elementary. It includes access to (available) land, access to finance, assistance with basic infrastructure, training, mentoring and monitoring. But government must also show some respect, recognition and appreciation towards this sector.”

Lift the alcohol sales ban

Wanda Augustyn, media and communications manager at Vinpro. Photo: Supplied

Spokesperson for wine industry body Vinpro, Wanda Augustyn, says government should urgently lift their controversial ban on alcohol sales in the wake of the Covid-19 pandemic.

Also, it should address the risks associated with the wine industry’s stock dilemma.

“Opening up the market should be priority as the wine industry contributes a vast amount to the fiscus. The industry faces significant cash flow challenges across the spectrum and the value chain,” says Augustyn.

“This continued ban will invariably translate into job losses, the temporary and permanent closure of tasting rooms and other wine related businesses. Opening up the market will alleviate the precarious situation the wine industry is already in.

Already, as a result of previous sales bans, the industry now has more than 640 million litres of wine in stock, which Augustyn explains is 65% of a normal harvest.

This poses a significant risk to the harvest that kicks off this week with many struggling with cellar space. Furthermore, illicit alcohol trade should be addressed as well as targeted exports in line with Wines of South Africa’s strategic market focus.

Market access, biosecurity and infrastructure

Fhumulani Ratshitanga is the CEO of Fruit SA. Photo: Supplied

For Fruit SA chief executive Fhumulani Ratshitanga a number of issues, including market access, biosecurity and the infrastructure of ports and dams, require government’s care this year.

Ratshitanga says while they appreciate the department of agriculture, land reform and rural development’s on-going efforts to support markets access applications, Fruit SA would like to see work towards agreements with foreign countries, especially in the East.

“These should be a priority as we need to grow the economy inclusively, particularly in this difficult socio-economic environment. This includes job creation, earning foreign exchange and developing as well as stabilising the rural environment. Attending to these issues is critical for this inclusive economic growth to happen.”

Ratshitanga also seeks clarity on what South Africa really benefits from the Southern African Customs Union. This, she adds, is important in the event that Mzansi should negotiate trade agreements which might not meet the approval of other members.

Resources for farmers in aquaculture

David Fincham, director of David Fincham Aquaculture in Gauteng. Photo: Supplied

“Farmers with land, but no resources are not farmers,” says David Fincham, director of David Fincham Aquaculture in Gauteng.

For this reason, Fincham believes that access to finance and funding for new farmers, especially small-scale farmers, should be among government’s top priorities.

“New farmers must have the means to build infrastructure and to acquire the inputs, services and support to establish themselves and to grow. The bottom line is, we need to rebuild our economy and agriculture will be a great start.”

He adds that government should assist fish farm in buying expensive equipment.

Also, there needs to be a clear focus on the development of agricultural schools and curricula and to back this up with extension services to the sector.

What about the big L?

Prof. Elmien du Plessis is a leading expert in land and expropriation law. Photo: Supplied/Food For Mzansi

Constitutional law expert Prof. Elmien du Plessis believes government’s land reform to-do list might be long, but finalising the expropriation bill could move the country forward.

“Government should finalise the expropriation bill and conclude the process of amending section 25 (and) give clarity and finality to the section process – whether it is an amendment or not – in order to restore a level of certainty,” she says.

Issues surrounding communal land rights, including the Ingonyama Trust, also require policy clarity, believes the North West University lecturer. Clarity around black farmer security (long-term leases or ownership) is also needed, followed by sufficient support.

Commercialisation of black farmers

Wandile Sihlobo, chief economist at Agbiz. Photo: Supplied

According to Wandile Sihlobo, chief economist of Agbiz, this year’s agricultural agenda will likely be dominated by issues surrounding agricultural finance, the commercialisation of black farmers and the development of rural areas.

In Agbiz’s weekly note on the agricultural markets, Sihlobo states the agricultural finance discussion will probably build from the Land Bank’s liquidity challenges, and broaden in search of new and efficient financing methods.

In terms of the commercialisation of black farmers, he says “this could gain momentum, but not necessarily at the expense of smallholder farmers’ support and initiatives.”

Furthermore, the microfinance targeting the most vulnerable subsistence and household farmers, announced by government late last year is fresh thinking, says Sihlobo.

This, he is certain, “will build a group of new smallholder farmers that can later be financed by private financial institutions and agribusinesses.”

Support for indigenous crop farmers

Dr. Ethel Phiri, agronomy lecturer at Stellenbosch University. Photo: Supplied/Food For Mzansi

“Government should focus on providing more support to local farmers who grow indigenous crops, particularly grains,” remarks Dr Ethel Phiri, an agronomy lecturer at Stellenbosch University.

“In 2018, the United Nations Food and Agriculture Organization endorsed India’s proposal to declare 2023 as the International Year of Millets.

“In the Southern African context, we need to focus on the production and protection of our own millets. This includes sorghum varieties (red, white, sugar/sweet), finger millet, pearl millet, teff, finio etc.,” she says.

Millets are a group of highly variable small-seeded grasses, widely grown around the world as cereal crops or grains for fodder and human food.

By supporting these farmers producing on marginal land, the country will subsequently showcase alternative grains to wheat and oats. This, Phiri says, can be used as staple foods for healthier diets.

Affordable agricultural financing

Christo van der Rheede, the executive director at Agri SA. Photo: Supplied

Meanwhile, Agri SA’s executive director, Christo van der Rheede, believes agricultural financing should be government’s first priority.

“Without cheap financing and a sustainable blended financing model consisting of a grant portion and a loan with low interest rates, it will be very difficult to establish new commercial farmers,” he says.

Also, sustaining the current crop of commercial farmers who are dependent on the Land bank for cheaper financing is a priority.

Van der Rheede is bothered by the fact that subsidies for commercial farmers are almost non-existent. This, while the US, European Union and many other countries subsidise their commercial farming sector.

“In the absence of a comprehensive subsidy system, access to cheap agricultural financing becomes all-important, and especially (so given troubles at the) Land Bank. A new model for the Land Bank based on a public-private partnership must be investigated and implemented as soon as possible.”

Fix rural safety first

Dr John Purchase, the CEO of Agbiz. Photo: Supplied/Food For Mzansi

John Purchase, chief executive of Agbiz, believes there are a number of pressing issues, both non-agricultural in nature and in the agriculture value chain.

Overarching high-priority issues, he says, include sorting out the South African Police Service.

“Rural safety is a particular concern. (There are) huge leadership problems, both political and operative, in SAPS. Our general criminal justice system has been highly compromised through the state capture years,” he says.

Also, on his to-do list for government is getting the economy going and to stop using blunt instruments such as the alcohol sales ban that has a disastrous impact on the economy.

Purchase says government should also “finalise the blended finance mechanism. In light of the Land Bank’s challenges, this becomes very important.”

Agricultural finance, in general, is in a much riskier space than what it has been for many years and Purchase reckons this will need focused attention.

‘Don’t make decisions from a distance’

Afasa president, A.J. Mthembu. Photo: Supplied/Food For Mzansi

AFASA’s newly elected president, A.J. Mthembu, calls on government to not make decision from a distance without engaging with relevant stakeholders and farmers on the ground.

This is to ensure that government does not action what he describes as a “false prescription diagnosis” where farmers’ problems and needs are assumed.

“Our expectation from government this year is to not do things for us without us. Already, so much money has gone to waste because people think from a distance.”

End the alcohol sales ban

Chief executive of the Beer Association of South Africa, Patricia Pillay. Photo: Twitter

The Beer Association of South Africa (BASA) also believes government’s main priority should be to protect lives without sacrificing livelihoods.

BASA chief executive Patricia Pillay says an end to the blanket ban on alcohol, the protection of a million livelihoods and relief measures for small business owners need to be prioritised if government is truly committed to economic recovery.

“If urgent interventions are not made soon, several more businesses will be shut down permanently, job losses will increase dramatically, and further divestment will occur.

“If government does not prioritise the recovery of the alcohol industry, we will see irreparable damage across the local beer sector in the immediate future.”

Re-examine agricultural development 

Qinisani Qwabe is an agricultural researcher at the Mangosuthu University of Technology’s (MUT) Institute for Rural Development and Community Engagement. Photo: Supplied

According to Qinisani Qwabe, an agricultural researcher at the Mangosuthu University of Technology’s Institute of Rural Development and Community Engagement, disadvantaged farmers who do not benefit from development initiatives need to be prioritised.

Most of these farmers do not get support because the department requires a trail of evidence to prove that agricultural enterprises are registered entities.

“People in underdeveloped communities do not register their businesses. They produce for subsistence purposes, to sustain their livelihoods and achieve food security,” he says.

Also, people in rural communities are often uneducated, unemployed and not technological savvy. These barriers make it almost impossible for them to reap the benefits of development initiatives.

Support black commercial farmers

Sinelizwi Fakade, an Eastern Cape farmer. Photo: Supplied

Eastern Cape farmer Sinelizwi Fakade says government should implement measures to support black farmers who are “factually and practically” commercialising.

“The direction of government should be to vigorously identify and support individual farmers or farming groups that have a solid trajectory in terms of growth. From a policy direction, government must be unapologetic that black commercial farmers’ potential are financially supported.”

Opportunities for agricultural graduates

Nono Sekhoto, the CEO of GrowthShoot. Photo: Facebook

Agripreneur and managing director of GrowthShoot, Nono Sekhoto, believes government should focus on building real capacity in order to implement agricultural plans well.

“Currently, those employed are not necessarily well equipped to do so and I believe government should really make a concerted effort in building future capacity,” she says.

Sekhoto suggests that government focuses on building a robust and sustainable programme that brings young interns into the department of agriculture, land reform and rural development. These interns should be “young people who have graduated in agricultural studies, so that we ensure that those entering the sector are well-equipped.”

Stop illegal land grabs

Amanda Gouws, professor of political science at Stellenbosch University. Photo: Supplied/Food For Mzansi

Political science professor at Stellenbosch University, Amanda Gouws, says illegal land grabs should be high on government’s priority list.

“It should be a priority, but I think the pandemic is trumping it as a priority. If agricultural land is grabbed, it may have a serious impact on food security for all citizens,” she says.

Gouws believes that land grabs are encouraged by certain political parties. However, warns, this should not delay government in speeding up land reform.

Land reform, and not necessarily land expropriation without compensation, is crucial, “so that people who do not have land to build a house on can attain that. It is unjust that people live in squalid informal settlements with nowhere to go.”

Furthermore, Gouws argues that “land grabs are not for agricultural land, but for land to live on. We see more land grabs in semi-urban and urban areas.”

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