Success of Ramaphosa’s agriculture stimulus plan depends on land reform outcome – economist | Fin24
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Success of Ramaphosa’s agriculture stimulus plan depends on land reform outcome – economist

Sep 21 2018 20:54
Carin Smith

Current land reform discussions and the direction the policy takes will be key determinants of the success of President Cyril Ramaphosa's proposed action points for stimulating the South African agricultural economy and the economy at large, according to agricultural economist Wandile Sihlobo.

Sihlobo is the head of agribusiness research at the Agricultural Business Chamber (Agbiz), and has also been appointed to President Ramaphosa's new 10-person land reform advisory panel

Ramaphosa announced his economic stimulus and recovery plan for the country on Friday to boost the country's sluggish economy, restore investo confidence and create jobs.

The plan emphasises that agriculture has massive potential for job creation in the immediate and long term.

The stimulus measures re-prioritise funding to be directed towards investments in agriculture, as well as economic activity in townships and rural areas.  While the president did not go into much detail about funding, he said reprioritised expenditure and new project level funding would amount to R50bn in total.

The agricultural interventions announced by Ramaphosa at the Union Buildings include a package of support measures for black commercial farmers to increase their entry into food value chains through access to infrastructure like abattoirs and feedlots. 

The president said a significant portion of the funding to flow to agriculture would go towards export-oriented crops that are highly labour intensive. 

Blended finance will be mobilised from the Land Bank, Industrial Development Corporation and commercial banks.

According to Sihlobo, broadly speaking, these are encouraging developments, and to some extent, in line with the theme of Chapter six of the National Development Plan.

"I have previously discussed the role of agriculture in job creation, and to bring underutilised land in communal areas and land reform farms into commercial production, expand irrigation systems and identify and support agricultural expansion in areas that have a high potential for growth and employment," he commented in a blog post. 

"This will require investment and strong and efficient institutions."

Janine Myburgh, president of the Cape Chamber of Commerce and Industry, welcomed Ramaphosa's plans to develop agriculture, but warned against simplistic views on land reform. 

“Successful agriculture depends on water and how it is used. This means investments in modern irrigation systems and the use of sophisticated technology to increase productivity," she said.

"Simply changing the ownership of land will not produce any more food, but intensive productive farming methods will.” 

The Land Bank is currently concluding transactions that will create employment opportunities in the agricultural sector over the next 3 to 5 years, Ramaphosa said on Friday. 

Ramaphosa has announced that he had appointed an advisory panel on land reform that will guide the state's current Inter-Ministerial Committee (IMC) on Land Reform chaired by Deputy President David Mabuza. 

The 10-person panel is to advise government on the implementation of a fair and equitable land reform process that redresses the injustices of the past, increases agricultural output, promotes economic growth and protects food security.

In an later statement, Ramaphosa said the ten members of the panel were “eminently qualified by virtue of academic background, professional experience, social entrepreneurship or activism related to the agricultural economy and land policy”.

“The panel is expected to provide perspectives on land policy in the context of persisting land inequality, unsatisfactory land and agrarian reform and uneven urban land development," he said. 

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