Agricultural Market Viewpoint: What to make of Minister Didiza’s latest budget vote speech?

  • 22 July 2019
  • 468
  •  Wandile Sihlobo
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  •  nuus



Land reform perspective

There was little of note in terms of the new policy in the budget speech, but rather a sense of urgency on implementing land reform in a sustainable way. Didiza intends to have close cooperation with landowners – including farmers, companies, and trusts. There was little detail on how such an approach would be carried out. We suspect that the reason might be because there are still ongoing consultative processes amongst policymakers following the submission of the Presidential Advisory Panel report on Land Reform and Agriculture in June.

The immediate focus for Minister Didiza is likely to be on the revitalisation of land reform farms that are currently underutilised – both restitution and redistribution farms – and any other state-owned land. Such an approach would not only be transformational, but it will also ensure that agriculture contributes to rural economic development and job creation.

Minister Didiza also noted that “…in the reorganisation of the new department, we bring requisite skills and capabilities to accelerate implementation. Ethical conduct is also very important in the public sector since we are given stewardship over public resources to enhance livelihoods and create opportunities for our citizens.” This is important because the implementation of land reform has previously been linked to maladministration.

The Department of Agriculture, Land Reform and Rural Development cannot survive in isolation. Hence, we had previously argued that Minister Didiza will have to work collaboratively with the Department of Human Settlements, Water, and Sanitation. These departments have more to gain by working together as land reform is not limited to agriculture but is also crucial for human settlement, especially in the urban areas. There are policy synergies between these two departments that should be fully exploited. But the Minister did not make a pronouncement on this matter in her speech. 

She did, however, announce that the Minister of Environment, Fisheries and Forestry has signed a memorandum of understanding with her department. This will ensure the ease of decision-making in areas of interest within these departments. A similar approach is needed with the Department of Human Settlements, Water, and Sanitation.

Agricultural perspective

The growth of the South African agricultural sector has been export-driven. The country exports approximately 49% of its produce in value terms. This means the areas that could temper with the ease of exports needs to be continuously monitored. One such area in the recent past has been animal health, which includes the recent outbreaks of foot-and-mouth disease and African swine fever in parts of South Africa. 

To industries such as wool, and beef, the former had financial implications as it led to a ban on exports. Hence, we were pleased when Minister Didiza noted that “…focus will be to prioritise biosecurity in order to mitigate risks of animal and plant disease. The national department will ensure that budget support goes towards stepping up surveillance of foot and mouth disease red line zones. This is mainly Limpopo, Mpumalanga and KwaZulu-Natal”.

Still, on the trade theme, Didiza intends to expand South Africa’s agricultural footprint in export markets; develop an agribusiness master plan, and re-look at the poultry industry. We will keep a close eye on the details and progress in these points over the coming weeks and months.

In closing, the role of competition policy is likely to be an addition to the typical policy leavers in the agricultural sector under the new administration. Minister Didiza noted that “the food value chain remains highly concentrated amongst a few players. This is hardly the basis of building a sustained agricultural economy that serves all. We need to work together to open up the sector…” While the implementation of competition policy is outside the Minister’s domain, this matter is likely to dominate debate in the food sector in the coming months.

Concluding remarks

Overall, we view Didiza’s budget vote speech as a measured approach for a good start for the new department – which is the revitalisation of the underutilised government and land reform farms and also increased focus on trade (market access). There were no new bold policy propositions, understandably so as the departments are still in the reorganisation of the internal functions. The emphasis on ensuring private sector participation in the policy and programmes design and implementation is also encouraging.

In the near term, the important matter to monitor is a possible announcement regarding land reform policy. This will in all probability come from the Inter-Ministerial Committee on Land Reform and Agriculture, and the Cabinet. The recently submitted Presidential Advisory Panel report on Land Reform and Agriculture will at best inform the land reform policy discussions in the aforementioned structures.

Essential for all the aforementioned points is the smooth integration, harmonisation, rationalisation and capacitating of the two departments – into what now is called Department of Agriculture, Land Reform and Rural Development. This is to ensure there is a great deal of alignment in their core mandates, philosophical outlook, and priorities.

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