Ramaphosa receives first advisory report on despondent agricultural sector

President Cyril Ramaphosa and his deputy David Mabuza received a report from the advisory panel on land reform and agriculture on Tuesday.

This came as one of the panel members called on Ramaphosa to clear “any lingering uncertainty” about land reform policy as businesses are downbeat about conditions in SA.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber (Agbiz), said that certainty would help boost rural economies and unleash the full potential of the agricultural industry, which bled 12,000 jobs during the first quarter of 2019, and during which the GDP declined by 3.2%, or R56bn.

The panel was appointed in September 2018 to advise the inter-ministerial committee on land reform, chaired by Mabuza, on policy matters, land reform, restitution, redistribution, tenure security and agricultural support.

On Tuesday, presidency spokesperson Khusela Diko said Ramaphosa and Mabuza have received the advisory panel’s report, which will be tabled before cabinet before being released publicly.

“This report is an important step forward in our quest to right the original sin by developing solutions that are not only uniquely South African but, most importantly, build a society in which all may share in the wealth of our land,” said Ramaphosa. 

Last year, the National Assembly and the National Council of Provinces adopted a contentious report that called for a constitutional amendment to make it explicit that expropriation of land without compensation could be used to address skewed land ownership patterns dating back to the colonial era. However, analysts slammed the government for not providing certainty on the matter, spurring Ramaphosa to appoint the advisory panel last year.

Data released by Agbiz on Tuesday revealed that the Agbiz/IDC Agribusiness Confidence Index fell by two points to 44 in the second quarter of 2019. The index is used by agribusiness executives, policy makers and economists to understand the perceptions of the agribusinesses sector.

Sihlobo said a level below the neutral 50-point mark implies that agribusinesses are still downbeat about business conditions in SA. The survey was conducted between May 27 and June 6 on agribusinesses operating in all agricultural sub-sectors across the country.

In the fourth quarter of 2009, during scandal-prone former president Jacob Zuma’s tenure as head of state, the composite index was 40. It surged to 58 in the fourth quarter of 2014, during his second term as president. When Zuma resigned in February 2018, the index was at 58 but eased to 54, 48 and 42 in the second, third and fourth quarters of 2018, respectively.

Sihlobo said while there are a number of factors that influence agribusinesses decision makers, the erratic weather conditions that led to a reduction in summer crop plantings and “the lack of clarity on land reform policy and water rights remain the key factors” underpinning despondency in the sector.

A persistent decline in confidence is typically followed by a similar movement in investment, “but fortunately this has not been the case in SA agriculture thus far”.

The data comes almost a week after Thoko Didiza, minister of the newly reconfigured agriculture, land reform and rural development department, and her two deputies S’dumo Dlamini and Mcebisi Skwatsha, met with the executives of entities falling under the department.

These entities included the National Agricultural Marketing Council, the Agricultural Research Council, the Office of the Valuer-General, Onderstepoort Biological Products, and the Perishable Products Export Control Board.

A note from the department read: “Minister Didiza acknowledged all the excellent work done by the entities in fulfilling their respective mandates. Under the sixth administration, minister Didiza asserted the need for the state-owned entities to support the governing party mandate in transforming agriculture, developing the agricultural economy, and ensuring food security.”

mkentanel@businesslive.co.za