Agriculture hits the headlines

Picture credit: African Business Communities.

But does the rhetoric stand up to scrutiny?

Editor’s comments in italics.

THE past six weeks have seen a flurry of announcements regarding the future of agriculture in the country, with a further development expected next month from the USA Consulate on export partnerships.

The first was the announcement during May of the unveiling of a ‘New Agriculture Agro-processing Masterplan to transform the sector’ from Thoko Didiza the Minister of Agriculture, Land Reform and Rural Development, who said upon signing: “…[it] will allow government to reimagine a sector that South Africa wants – one that is both globally competitive and inclusive.”

The Masterplan announcement however, was a little light on detail although contained the usual hackneyed platitudes such as ‘social compacts’ and the role of financial institutions and government’s ‘achievements’ to date which said Didiza “ ..the department has transferred R400 million of the committed R1 billion grant to the Agri-Industrial Fund as per Memorandum of Agreement (MOA) with the Industrial Development Cooperation (IDC).

“In our first year, the facility has funded nine projects to the value of R384 million.

“All of these projects are black owned and operated and four of these are women owned.

This facilitated 229 new jobs. (That means each job cost the taxpayer more than R1,676-million to create!)

“There are currently 31 transactions in the pipeline requiring R2.2 billion, of which R623 million is grant funding.

“It is envisaged that 1 371 new permanent jobs will be created through these initiatives. (Each job cost R1,45-million to create. Readers can draw their own conclusions regarding value for money.)

Africa Agricultural Strategy for the Western Cape.

The statement reads: On Friday, 27 May 2022, the Western Cape Department of Agriculture launched its Africa Agricultural Strategy for the Western Cape.

Western Cape Minister of Agriculture Dr Ivan Meyer said that the strategy focuses on co-creation within economic development, job creation, and food security.

Meyer: “The African market offered great trade opportunities and was essential to South Africa and the rest of the world. We aim to unlock agricultural opportunities in Africa and the Western Cape Agricultural Sector, including agricultural trade products, inputs, services, technology partnerships, information, skills development, training and logistics.”

Meyer continues: “Africa is the third-largest market of the Western Cape’s primary agricultural exports, accounting for R4.3 billion in 2021. The African market imports share of 41% for agricultural exports comes from South Africa. Globally it accounts for 2.9% of global imports and contributes 2.8% to the world economy. Furthermore, during 2012-2017, the average annual GDP growth increased by 4.3%, the second fastest-growing economy after Asia at 4.5%.”

Siobhan Thompson of Wines of South commented: “South Africa’s wine exports to other African countries increased from about 15,5 million litres in 2020 to 23,4 million litres in 2021. For example, between 2020 and 2021, volumes traded with Nigeria increased from 1,9 million to 6,6 million litres, while Kenya’s volumes increased from 3,5 million to 4,8 million litres, and Tanzania’s from 2,2 million to 3,4 million litres.”

CEO of Agri-Western Cape, Jannie Strydom, says that his organisation is committed to supporting the WCDoA’s African Strategy. 

Again, plenty of Government speak but no cast iron details. 

Agri SA partners with Motsepe Foundation to drive commercial partnerships 

The third announcement had a little more meat on the bone and described AGRI SA’s launching of two pioneering projects in Limpopo and Mpumalanga to boost the sector’s transformation efforts. It reads:

“The projects are the culmination of a joint initiative with the Motsepe Foundation to reimagine development funding and foster greater collaboration to accelerate the inclusivity of the agricultural sector.

The Motsepe Foundation and Agri SA, through its subsidiary Agri Enterprises, have identified access to capital as a key constraint facing projects with real potential to support and advance emerging farmers. 

Due to legal and tax requirements and because of the commercial nature of these projects, the Motsepe Foundation facilitated approximately R70-million of funding for the first two projects through a company established by the Motsepe family.

The Agri SA statement says that this initiative will create 1 541 new jobs at a cost of R45 425 per job – substantially less than those “created by Government” which only emphasises the well-trodden path that Government’s job isn’t to create jobs and when it tries, well, the numbers don’t lie. The Government’s route to job creation is more than 30 times more expensive than if left to the private sector. The full Agri SA statement can be found in Cape Business News July 2022 issue.

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