Mzansi Agriculture Talk

Economics

Ambivalence of the 2021 budget speech to agriculture

The 2021 Budget Speech delivered by the Minister of Finance Tito Mboweni was dressed with few details for agriculture. 

The allocation of R16 billion expenditure for agriculture was simply not adequate for a sector that pulled economy from the doldrums during the hard lockdown. Asian market opportunities were screaming and demanding for more South African agricultural products and government’s silence on this was deafening. 

Modernising the six busiest border posts was arguably the best approach to penetrate markets in the neighbouring countries and ease congestion, as more of mechanized products like tractors, seeds, agri-equipment were in high demand in the SADC countries.

Treasury Vote 29 of agriculture, land reform and rural development suggests that much of the expenditure costs at the department would be driven by compensation to employees, transfers and subsidies. Furthermore, the reasons to prioritize restitution claims was rather political than constructive

“Government plans to finalise 1409 restitution claims at a cost of R9.3 billion over the next three years to achieve redress and equitable access to land. The Department of Agriculture, Land Reform and Rural Development has also set aside R896.7 million for post‐settlement support. This will include the recruitment of approximately 10 000 experienced extension officers,” said Minister Mboweni.

Government agricultural extension services were known to be in a disastrous state as compared to NGO and private sector extension services. To use government extensionists to drive restitution was akin to be throwing tax payers money down the drain.

The department said it is currently working to reduce the ratio of extension officers to farmers from 1:850 to 1:250 and would help recruit the approximately 10 000 extension officers.

Yet, the South African Council for Natural Scientific Professionals (SACNSP) confirmed that only 203 (9,2%) of government extensionists had a BSc Agri qualification as compared to 53% of non-government extensionists who held the qualifications and had honours degrees. It begged the question how the 10 000 extension officers would serve farmers if the current government crop of extensionists were under qualified. 

Minister Mboweni also came to the rescue of Land Bank with a R7 billion injection to address its debt challenges. But more promising, was Treasury allowing for the bank to revisit its original mandate of being a development bank than operating as a mainstream bank.

“This allocation will help to resolve the bank’s current default and re‐establish the development and transformation mandate. This amount will not affect the expenditure ceiling but will be offset through an expenditure reprioritisation process,” added the Minister.

In the next coming weeks, Minister Thoko Didiza will be delivering her budget speech and all eyes will be on the infrastructure and market access bible – Agriculture and Agro-Processing Master Plan.

About R2.3 billion has been allocated for five irrigation schemes in crop production in rural areas, and the 21 fresh produce markets across the country. More pertinently, access for emerging farmers in these fresh produce markets has been largely stifled by ‘generational relationships’ dating as far back as the 70’s.

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