WANDILE SIHLOBO: Slow structural reform in agriculture limits growth

Despite all the commendable government work in opening up export markets, helping to control the spread of animal diseases and supporting smallholder farmers, agriculture has been lurching from one crisis to another. The crises have limited potential growth.

Last year the big challenge was load-shedding and its effects on agricultural production. Later in the year there were widespread animal diseases and crises at ports, railway lines and roads. Many government programmes aimed at boosting the sector’s long-term growth thus remain on the periphery as government officials and the private sector focus on more pressing issues. Implementation of interventions needed for the long-term expansion of the sector contained in the agriculture & agro-processing master plan for example have been limited. 

The launch of the Land Reform Agency, aimed at releasing government-owned land to carefully selected beneficiaries with title deeds, has been delayed. This process should be a vital catalyst to the expansion of the agricultural sector. The government has about 2.5-million hectares under its proactive land acquisition strategy that could be transferred to new entrant farmers and boost production in various value chains. President Cyril Ramaphosa has spoken about setting up this agency in various state of the nation addresses, yet there has been limited progress in delivering on these promises to the nation. 

Delivery on crucial issues such as reforming and modernising the registrar’s office, and the efficient registration of new agrochemicals, has also been delayed. These are just some of the challenges that have caused profound unhappiness among sector stakeholders.

The months ahead are likely to offer little delivery because of two challenges, among other hindrances. The elections are two months away, and the political leadership of various government departments that are crucial for the cross-cutting aspects of the master plans are likely to be focused on re-election. In an ideal situation the election cycle should not be an issue, and government officials would continue implementing already adopted programmes.

Scant rainfall

Another challenge this year is the change in agricultural conditions, the financial impact of which on farmers and consumers is likely only to show in the coming months. Parts of SA have been unusually dry and extremely hot. This week marks nearly two months since some regions received adequate rainfall.

Throughout February and March rainfall has been scant countrywide, with an intense heatwave that made the summer crop growing conditions difficult. These months are also critical for crop pollination, a growth stage that typically requires higher moisture levels.

We have now gone through pollination with limited moisture, reinforcing fears of a potentially poor summer crop this year.

Another challenge of the 2023/24 season is the difficulty in forecasting the size of the summer crop as we face a moving target and continuous unfavourable weather conditions.

While there is profound uncertainty in many areas the department of agriculture, land reform & rural development would do well to focus on a few aspects that could still uplift the mood in the sector and illustrate government’s commitment to its programmes and stakeholders. These include: 

• Clear communication about modernising the Fertilizers, Farm Feeds, Seeds & Remedies Act of 1947 that is intended to provide for the registration of fertilisers, farm feeds and sterilising plants. This issue perpetually comes up in various farmers’ meetings, and the government must step up to provide direction. 
• The department must also urgently address the assignees’ issue, as one often hears much unfavourable talk about the Leaf programme, which should be reviewed. 
• Clarity about the Land Reform Agency is essential.
• The director-general must call a meeting and guide the sector about the status of the agriculture & agro-processing master plan and the direction for the implementation process now and after elections.

• Sihlobo, chief economist at the Agricultural Business Chamber of SA and author of ‘A Country of Two Agricultures’, is senior fellow in Stellenbosch University’s department of agricultural economics.