SONA: Zuma's R2.5bn for drought aid questioned

Feb 10 2017 17:14
Carin Smith

Cape Town - Agri SA questions the amount of R2.5bn mentioned by President Jacob Zuma in his State of the Nation Address (SONA) as having been allocated towards drought aid.

In the view of the agriculture body very little support has actually been received in this regard. It said it will engage with the Department of Agriculture, Forestry and Fisheries on how the amount mentioned by Zuma was calculated.

Agri SA president Johannes Moller said the organisation also has reservations about the intended content of what Zuma called "radical transformation".

"President Zuma did deal with a number of related matters in visionary manner and the principles in relation to transformation expressed by him can, in my view and especially on a cooperative basis between government and private sector, be put into practice," said Moller.

"President Zuma made mention of laudable land reform initiatives conducted by farmers in cooperation with farm workers. He emphasised the importance of the National Development Plan and the Constitution, the very frameworks which Agri SA also used to present workable land reform proposals to government."

“Our farmers went through a difficult period last year because of the drought,” that was about it, from what I read (no, I didn’t watch – couldn’t bear it). Mention was made of government drought assistance, but Agri-SA is questioning whether it was anything like enough (http://www.agrisa.co.za/agri-sa-commentry-sona/) indeed, if it was as much as stated .

READ: SONA: Zuma's vision for a stronger state-controlled economy

Of concern for Agri SA, though, are the uncertainties in relation to the expropriation bill having been referred back to parliament; the intended changes to the Competition Act to deal with concentration of ownership; and the envisaged property practitioner's bill.

"Agri SA, like many other stakeholders, have again prior to the SONA stressed the need for policy certainty, admittedly a tough ask but of paramount importance to restore South Africa as a preferred destination for foreign direct investment," said Moller.

"The president again referred extensively to trade agreements with, for example the European Union, Mercosur countries, Africa, China and some of the Brics members. For the agricultural sector trade and related matters are of obvious importance and I wish to commend government for successes in this regard."

“Our farmers went through a difficult period last year because of the drought,” that was about it, from what I read (no, I didn’t watch – couldn’t bear it). Mention was made of government drought assistance, but Agri-SA is questioning whether it was anything like enough (http://www.agrisa.co.za/agri-sa-commentry-sona/) indeed, if it was as much as stated .

Close involvement

Agricultural business chamber Agbiz said in reaction to SONA that it has been closely involved in the CEO Initiative referred to in SONA as well as in the Presidential Business Working Group, Nelac processes, the development of the new AgriBEE Sector Code and various other policy and legislation platforms to generate inclusive growth, sustainable transformation and a prosperous society.

At the same time, Agbiz said pre-SONA pronouncements on expropriation of 70% of South Africa’s land - government already holds approximately 25% of land - as well as pronouncements on "radical economic transformation" have created considerable uncertainty in the agribusiness sector.

“By better defining ‘radical socio-economic transformation’, and that it will by and large be driven within the existing legislative framework, is useful and at least a good starting point for further engagement. That land reform will be conducted within the ambit of the Constitution, is also a good point of departure. An interesting addition though is the proposed amendment to the Competition Act to address so-called concentration, and Agbiz will participate in that debate,” said Agbiz CEO Dr John Purchase.

“In terms of the necessary structural changes to put the economy of the country on a 4% to 6% growth rate path over the next couple of years, Agbiz sees very little in the SONA in terms of substantive and innovative measures. To the contrary, the more government intervenes and ‘plays’ in the economy, as is its stated intention in the SONA, the more private sector investment will be shy and seek alternative opportunities. While smart incentives and support measures can certainly provide an impetus to inclusive growth, these will need to be well thought through.”

He said Agbiz is in full support of sustainable transformation, but there is also a general concern that the government’s intention to 'utilise to the maximum, the strategic levers of state’ – as stated in the SONA – would ultimately lead to over-regulation in the sector, which in turn, will negatively impact on private sector investment and compromise food security in the medium to long term,” said Purchase.

"All in all, SONA 2017 was not particularly inspiring and concerns exist whether a sound, cohesive a comprehensive economic strategy exists to address the key challenges South Africa faces."

No mention of crisis

Agri Western Cape CEO Carl Opperman said SONA 2017 made no mention of the crisis that agriculture has been struggling with for the past two years.

"Radical socio-economic transformation was given a little more air, but there are still many questions. The comments about land created substantial uncertainties. It is clear from the president's assumptions that the figures which he used to project a future that makes political, but no economic sense, are outdated, said Opperman.

"Agri Western Cape wants clarity on the basis of the figure of 9.8% land transferred. Many claimants have received money. It should be part of the percentage."
Opperman said the state owns uncultivated land that "contributes nothing to food security" and can be used towards transformation.

"The snail's pace demonstrated by the government with the land audit, shows that the facts will not be in their favour. Organised agriculture has always participated in transformation and land reform projects, but there are many frustrations with the department that is not functional to manage processes," said Opperman.

"These processes are further weakened by cadre deployment. Access to title deeds and getting information from the office of the Surveyor General have become a source of income for the state that makes it almost impossible to complete a successful land audit. The recapitalisation year after year of projects without proper business plans or proper repayment capacity of the projects, and the absence of knowledgeable people on the ground, are part of the frustration of many unsuccessful projects that lay like cemeteries throughout the country."

He said to date, more money was spent on land reform than the successes justify.

"Regarding the government's R2.5bn drought relief, we would like to have a detailed statement to see where the money has gone to, because very little got to agriculture in the Western Cape. We are also concerned about the president’s deafening silence about the main source of life, namely water," said Opperman.

"Dam capacity and aging infrastructure that has not been addressed since 1994, are taking a toll on the future and on economic growth. We would have liked to see the president give guidance and direction regarding the country's water crisis. Also, the moral decay of society will not be eliminated by social grants, or with the increase in the minimum wage which is not linked to skills or productivity. We expected statesmanship, but got populism."

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agri sa  |  drought  |  sa economy  |  agriculture  |  sona 2017



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