Given the economic environment at a time when the globe continues to grapple with the worst pandemic in history, we welcome some of the interventions tabled in the medium-term budget policy statement (MTBPS). However, an opportunity to harvest low-hanging fruit has been missed.

After the president’s recent address when he highlighted that the agricultural sector would be one of the main sectors to kick-start the economy, we expected that the Treasury would be more robust in its support for the industry.

The sector is one of the biggest employers in the economy given its labour-intensive nature compared with other sectors, accounting for about 4.6% of total labour, and as such presented an opportunity for further investment into the sector to drive up employment.

Cutting fund allocations — a R5m deduction from the Ilima/Letsema projects grant and the R980,000 from the land care programme grant — does not bode well for this objective, alongside market entry for smaller players.

We welcome the government’s commitment to cut its wage bill by R310.6bn over four years, including the R36.5bn cut for 2020, as this shows intent to alleviate pressure on the public purse. We also welcome the R7bn additional allocation for the Land Bank, but more could have been done.

The allocation of a further R10.5bn to SAA is a setback as these funds could have been channelled to industrial development and localisation, in accordance with the reconstruction and recovery plan set out by the president.

Effective implementation remains critical in the quest for a prosperous economic future for all.

Christo van der Rheede and Kulani Siweya
Agri SA 

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