After being in a National State of Disaster for the past 750 days, Mzansi’s agricultural sector can finally breathe again. The disaster declaration on 15 March 2020 may have been in response to a global health crisis that posed a threat to millions of citizens, but it also brought many agricultural business to financial ruin.
As President Cyril Ramaphosa officially closed the two-year chapter last night (Monday, 4 April 2022), industry leaders and Food For Mzansi revisit the Covid-19 lockdown mistakes that should never be repeated.
Wine and beer industry lost millions
The country’s wine industry, specifically, suffered significant setbacks when government imposed a complete ban on alcohol sales as a measure to curb the spread of Covid-19. This was despite repeated calls by industry leaders for government to provide reasoning behind its decisions.
Wine producers and growers also found themselves scrambling not to dump 250 million litres of unsold wine to make room for the new harvest.
Role players in the industry, which provides employment to about 269 000 people and contributes R55 billion to the economy, felt that government did not make sound policy decisions or create an enabling environment for wine businesses to recover.
“We appeal to our government, going forward, not to apply restriction shock and cause further harm to the domestic economy by imposing unsound economic restrictions in the coming weeks,” Kurt Moore , South African Liquor Brand Owners Association CEO told Food For Mzansi in November last year.
Beer brewers also had it tough. Many brewers operate on a small scale and quickly found themselves in large amounts of debt, defaulting on loan repayments, with depleted savings accounts and facing threats from landlords. Many breweries closed down.
After months of earning little to no income, South Africa’s first black woman to have owned a microbrewery, Apiwe Nxusani-Mawela, was among those who called it quits.
The impact of alcohol sales bans was so severe that South Africa’s only supplier of a variety of speciality malts to beer brewers was forced to close its doors forever.
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Support to farmers failed
The Presidential Employment Stimulus Initiative (PESI) scheme, meant to provide relief for subsistence farmers, turned out to be more of a headache than a help, beneficiaries had told Food For Mzansi.
Pesi vouchers were supposed to help farmers buy agricultural inputs as a means to soften the pandemic-induced blow but farmers soon started reporting that they were being charged exorbitant fees by suppliers when buying production inputs.
In turn, this led to some resorting to selling or exchanging their vouchers for cash, an action the department deemed punishable.
At first the validity of the support vouchers had to be extended multiple times due to supply chain disruptions and administrative delays. Then, in a shock announcement, the department of agriculture, land reform and rural development said that beneficiaries would no longer be able to redeem their vouchers to purchase inputs and implements while it addressed farmer concerns.
The vouchers have since been activated once more, but not without two more months of frustration had passed for subsistence farmers across the country.
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Cigarette ban encouraged illegal trade
Illegal cigarette trade in Mzansi quickly went rampant when a ban on the sale of tobacco products were introduced.
Not only was it costing the country billions of rand in tax, but it was also jeopardising the existence of tobacco farming in the country.
Black Tobacco Farmers Association (BTFA) chairman Shadrack Sibisi said, “The practice is costing taxpayers and hardworking tobacco farmers…Illegal cigarette trade now constitutes almost half of all tobacco sales in South Africa.”
Furthermore, many producers in the multibillion-rand industry were forced to watch helplessly as their planting season passed.
Farmers were unable to plan the next cycle in the year-long process of tobacco growing while there was no indication when the coronavirus-related ban would be lifted.
“This illegal trade is taking food from our mouths and killing our businesses,” were the words shared by Zachariah Motsumi, spokesperson for the South African Tobacco Transformation Alliance.
Ironically, farmers blame national government – who continuously stated its good intentions – for enabling rapid growth in the illegal tobacco product industry.
ALSO READ: Mzansi at war with illicit cigarette trade
Little consideration for informal traders
Informal food traders were heavily restricted. Informal food trading accounts for at least 40% of Mzansi’s township economy and supports more than 500 000 people through direct earning.
Yet their trading hours were completely erased in the first seven days of hard lockdown, and then limited during following lockdown stages. Their trade also declined as overall economic activity slowed.
More stumbling blocks were added when the minister of cooperative governance and traditional affairs, Dr Nkosazana Dlamini-Zuma, announced that informal traders would be allowed to trade with a valid permit from their municipalities.
According to Lunathi Hlakanyane, a Stellenbosch-based agricultural economist, the service that these traders provide is not only essential, but critically important to the economy.
“Job losses in the formal employment sector led to an increase in the number of workers who create their own jobs through self-employment in the informal sector. So, in this sense, the informal sector acts as a shock-absorber in times of economic instability,” he said.
Professor Andries du Toit, director of the Institute for Poverty, Land and Agrarian Studies (PLAAS), told Food For Mzansi that 40% of the South African population were essentially either unemployed or in the informal sector and that lockdown extensions were detrimental to their livelihoods.
ALSO READ: Informal trade lockdown creating explosive situation
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