Mzansi Agriculture Talk

Agriculture

Farmers should dismiss any new non-costed agricultural plan

The OECD Producer Support Estimate (PSE) shows that South African farmers receive less than 2% of support as a share of total farm receipt, except sugar producers.

South Africa is a signatory to the 2003 Maputo Declaration which gave birth to the Comprehensive African Agriculture Development Programme (CAADP) that compels African States, including South Africa to allocate 10% of government expenditure to agriculture and rural development activities. This continental goal was recommitted in 2014 when the African states adopted the Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods. Despite South Africa being a signatory to both Maputo and Malabo Declarations, its expenditure on agriculture and rural development is R30.7 billion for 2019 which is equivalent to 1.6% of total government expenditure. The limited support to farmers, in particular black farmers, has perpetuated their exclusion in the formal agricultural production and markets. Consequently, inequality, unemployment and frustrations within the sector is growing fueling the radical calls for accelerated land reform and transformation.

South Africa’s public expenditure on agriculture is low in any form of measure implying farmers, both white and black, are not supported adequately. The OECD Producer Support Estimate (PSE) shows that South African farmers receive less than 2% of support as a share of total farm receipt, except sugar producers. However, farmers in the USA, Europe, Japan and other Asian countries receives anything from 15 to over 50% farm receipts from government support. The farmer supports come in the form of policy support, direct payments, insurance protection, research and development, market access support and other non-direct payments supports. In Europe farmer support programs are guided by the Common Agricultural Policy (CAP) and 40% of total EU budget is allocated to support and protect farmers using CAP as policy framework. From 2020, the EU commission has set aside €365 billion to support farmers for five years.

Similar in the USA, the state’s support and protect farmers through the Agriculture Improvement Act also known as Farm Bill. In December 2018, the USA government set aside $867 billion for the next five years to support farmers and improve their agricultural sector. Coming back to South Africa, there are good and progressive policy frameworks that have been promulgated to support farmers and stimulate inclusive agricultural growth. This include the Comprehensive Agricultural Support Programme, Land Reform, Agricultural BEE Charter and Commodity Associations through the Marketing of Agricultural Products Act. The challenge with these policies they are not costed and becomes difficult to implement them due to funding constrain. In essence, South Africa’s government creates progressive policies and programs and do not finance them which exacerbates poverty and exclusion of black farmers that do not have resources. A solid lesson from Western and Eastern countries is that an agricultural plan needs to have a clear costing and adequate public funds must be allocated to implement the plans. South African farmers need to start asking difficult questions regarding prioritization of the sector in terms of budget allocation. Any new plan that seek to growth the sector on an inclusive basis, should be well costed and the source of financing must be clearly defined to bring hope on both white and black farmers in the sector.

By Dr. Sifiso Ntombela

Farmers should dismiss any new non-costed agricultural plan
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