Bothaville - The continued involvement of the government in the free functioning of market forces has unfortunately brought about serious threats to the food security of the country, according to agriculture economist and biofuels adviser Fanie Brink.
"The most important economic principles are based on the free availability and mobility of the four basic production factors which are neccessary for production namely, land, capital, labour and management," said Brink.
"The prices or the rewards for these prodution factors are determined in a free market by supply and demand and are freely allowed to move to alternative employment opportunities where its productivity and earnings are the highest."
At the same time the reward of an entrepreneur can only be either a profit or a loss.
Land as a production factor
"The political objectives of the government of land restitution and redistribution were big failures over the past 20 years, mainly because of the high level of curruption, insufficient funding for the aquisition of land as well as the inability and failure of government support and extention services to developing farmers by unqualified civil servants," said Brink.
The accusation that farmers themselves were responsible for the increases in land prices over the past 20 years and, therefore, contributed to the problem that the government could only achieved 8% of its initial target of 30% for the redistribution of land, is just not the truth, according to Brink.
"The facts of the matter are that the prices of agricultural production are mainly determined by market forces of the supply and demand in national and international markets over which farmers have no control at all," he said.
"Agricultural producers do not have a mechanism through which they can pass price increases on to the consumer as it is possible in almost all the other industries outside the agricultural industry."
Willing buyer, willing seller
Legislation in terms of which the principle of a "willing-buyer/willing-seller" will be abolished was adopted by the National Assembly in March this year, said Brink.
"The implementation of this proposal must be seen against the background of the failures in the establishment and management of various projects in the redistribution process as well as the inability and failure to establish a meaningful number of small black farmers," said Brink.
"This will no doubt pose a serious threat to the sustainability of food security in the longer term."
Minister of Rural Development and Land Reform Gugile Nkwinti, recently published the governments latest proposals on land reform in the Government Gazette for commentary by April next year.
"This proposal for a transfer of 50% of all farm land to farm workers must be seen as the expropriation of land without exceptable compensation," said Brink.
"The fact that land reform is a pure political objective without taking into account the economic implications that it will have, will pose the most serious threat to food security."
Interest rates
Brink said the sharp and unnecessary increases in the SA interest rates over the a period when the international crude oil price and food prices reached new highs, also impacted very negatively on the agricultural industry, specifically to produce food on a sustainable and profitable basis.
Labour as a production factor
The increases in the mandatory minimum wages for farm workers have had a very negative effect on job creation in the agricultural industry compared to other industries in the economy, according to Brink.
"The agriculture industry could not just absorb these higher costs and had to reduce the number of farm workers," he said.
"All these additional production cost which the government forces onto the agricultural industry such as minimum wages, taxes and levies will eventually destroy the capability of the industry to produce enough food for the country."
He said the capacity of the agricultural industry to employ and support more people is even less affordable than in the other sectors of the economy, "especially if the profitability and sustainability of food production are more and more treatened by the political objectives of the government".
Furthermore, mechanisation in the industry has also replaced many farm workers over time and will replace even more.