AFRICAN FARMERS ASSOCIATION OF SA (AFASA) RESPONSE TO 2019 BUDGET SPEECH

22 February 2019 –

The African Farmers Association of South Africa (AFASA) has welcomed plans to accelerate inclusive economic growth and job creation from Finance Minister, Tito Mboweni, during his 2019 Budget Speech yesterday.

The Minister said the budget speech was responding to the five tasks given by President Cyril Ramaphosa during his 2019 State of the Nation Address, where he called for (i) the acceleration of inclusive economic growth and job creation; (ii) the improvement of the education system and development of skills needed now and in future; (iii) improving the conditions of life for all South Africans, especially the poor; (iv) fighting corruption and state capture; and lastly (v) strengthening the capacity and capability of the state to address the needs of the people.

Minister Mboweni stressed the importance of agriculture in achieving positive outcomes from taking on these five tasks. He said the state will be supporting private sector investments in agriculture by emerging farmers. He added that R1.8 billion will be allocated for the implementation of 262 priority land-reform projects over the next three years, whilst R3.7 billion was set aside to assist emerging farmers seeking to acquire land to farm. “The Land Bank will support smallholders, and leverage partnerships with other financial institutions. It aims to disburse R3 billion in the next fiscal year,” added Minister Mboweni.

AFASA appreciates the acknowledgment and pledged support from government to smallholder farmers. The organization believes that whilst it is important to allocate enough funds, the state capacity and focus in all spheres of government requires a serious revamp as it is not adequately serving an integrated growth and development agenda for, particularly black farmers. This has been proven by past failures, evidently in the land reform process where over 80% of the land reform project failed or collapsed. The organization, therefore, calls for an alignment of land reform with agrarian reform with a revamp of institutions to be more effective and efficient.

Black Farmers have grappled with the untransformed sector which has mainly served the interests of established commercial farmers since the deregulation period in 1997. This has led to a vacuum for farmer support for nearly 22 years. AFASA supports inclusive growth, the call now is for the amendment of the National Marketing Act to address the unintended consequences of deregulation.

Whilst the Land Bank’s announcement is encouraging, AFASA believes more has to be done to ensure that the bank delivers more on supporting black farmers. The organization would also like to congratulate the Land Bank, particularly its former CEO, Mr TP Nchocho who was at the helm when the bank managed to repay its debt, reducing government’s guarantee exposure. This is proof that we have capable black professionals who can drive the country to prosperity. “We wish Mr Nchocho more success at his current position as CEO of the  Industrial Development Corporation. We hope he’ll continue to drive transformation at the IDC, especially through supporting black farmers/businesses venturing into agro-processing/secondary agriculture,” said Mr Neo Masithela, AFASA chairperson.

AFASA believes that the agricultural funding model has been a total failure that entrenches inequality and perpetuates poverty and food insecurity at the household level. Currently, 88% of the Land Bank loan book serves white commercial farmers. The situation in commercial banks is worse. In terms of government funding, 2017/18 saw the removal of Recapitalization Support with no replacement. When farmers engaged with both Land and Agriculture Ministers, they were told that the new programme of Blended Finance in partnership with the Land Bank would be launched, but this didn’t materialize. This led to a disappointing planting season last year where farmers could not get access to funds or support for planting.

AFASA, therefore, calls for organized agriculture’s involvement in processes that follows the Minister’s speech, especially the plans for smallholder farmer/industry development and growth. “It is fundamentally wrong that anything can be planned for development and growth without primary stakeholders such as AFASA, or the Agricultural Sector Unity Forum. Through the ASUF, the sector could be part of the policy and agri-programmes’ development process, including developing pro-development funding models,” concluded Mr Masithela.

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Issued by Peter Mashala

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