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Jonas: SA needs formidable farming sector

Aug 18 2014 15:17
Sapa

Johannesburg - Growth in the agricultural sector must become more formidable and contribute to the country's gross domestic product (GDP), Deputy Finance Minister Mcebisi Jonas said on Monday.

"We must continue to transform the agriculture sector and broaden ownership and deepen skills," he said at the release of the Land Bank's annual financial report in Johannesburg.

"We must drive growth in agriculture, increase black farming, and ensure the commercial sector grows. We must drive large-scale commercial agriculture activity in a vigorous way."

He said South Africa had not done well in the sector in previous years, and much needed to be achieved.

"It's something... that should be looked at. We must look at what we can do to increase our global share in agriculture."

He said better support packages needed to be created for farmers. South Africa's output and demand remained stable, but there were factors constraining growth. These included extreme environmental conditions linked to climate change, and water prices, he said.

"Despite this, performance in the agricultural sector has been positive."

Jonas said it was critical for South Africa to take cognisance of what ratings agencies said, and whether they rated financial institutions positively or negatively.

The Land Bank recorded a net profit of R394.3m in the 2013 to 2014 financial year, a 29.4% increase from the previous financial year.

The gross value of agricultural production for 2013 was estimated at R187.6m. This was an increase of 8.5% over the previous year's R172.9m.

In the bank's report, Finance Minister Nhlanhla Nene said agriculture, which was expected to help grow the economy, was one of government's priority areas.

It was expected to create one million jobs by 2030, as stipulated in the National Development Plan, a policy aimed at eliminating poverty and reducing inequality.

Read: Big profit for Land Bank

Nene said the Land Bank played an increasingly important role in agricultural development.

"I am pleased to note that the bank has commenced engagements with the national planning commission to determine how best it can become involved in the proposed land reform initiative, aimed at expediting land transfer to previously disadvantaged individuals," he said.

"It is clear that the Land Bank is indeed in a position to provide much required expertise in providing a proper viability assessment of prospective farmers and farming enterprises that can be supported by government for conversion into commercial farming."

Nene said he had no doubt the bank would continue its upward trajectory and contribute towards GDP.

"Going forward, the bank will support land and agricultural reform... and seek to increase lending to emerging farmers while maintaining sound lending practices."

Last week, some farmers expressed uncertainty about government's proposal that a maximum share of 50% of farmland be allocated to farmworkers.

According to government's recently released policy paper on land reform and restitution, farm labourers would assume ownership of half the land on which they were employed.

This would be "proportional to their contribution to the development of the land, based on the number of years they had worked on the land".

The "historical owner" of the farm would retain the other half.

According to the proposal, tabled by Rural Development and Land Reform Minister Gugile Nkwinti, government would pay for the 50% to be shared by the labourers.

This money would not be paid to the farm owner, but go into an investment and development fund, to be jointly owned by the parties constituting the new ownership regime.

Commercial farmers told ANC secretary general Gwede Mantashe last week they wanted government to introduce a wage subsidy in the agriculture sector, and help building houses and agri-villages for farmworkers.

They wanted government to plan allocation of water before allocating land, particularly for labour-intensive farming.

They wanted government to review water management and provide more storage dams and irrigation schemes to grow the industry.

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