We have spent the past couple of months drafting a growth strategy for SA agriculture that will take the sector to greater heights even than the gains we have seen since 1994.
The sector has more than doubled in value terms since 1994. The lagging part of this growth has been including black farmers at the commercial level. They still contribute roughly 10% of SA commercial output.
The growth strategy, which incorporates the government’s Agriculture & Agro-processing Master Plan, not only aims to boost the share of black farmers' participation in the sector but to support established commercial farming to ensure a robust, inclusive sector in future.
This growth will be delivered through various interventions, including resolving policy ambiguities; ensuring food security, expanded production and employment creation; and developing localised food, import replacement and expanded agro-processing.
These are broad points, but the document takes a commodity-based approach and identifies key hindrances to inclusive growth and potential expansion areas. This makes the plan generally distinct from some of the plans we have seen in the past.
Notably, the master plan for the sector is a co-creation process of government and all social partners. Such an approach ensures that each key stakeholder takes responsibility in the implementation process.
The burning question will be finance as we proceed towards the implementation phase or phase two of the process. Some of the instruments government has at its disposal are blended finance and its budget, but it will also have to rely on the support of social partners on some occasions.
This is also an area where Land Bank will play a crucial role in the coming years. Admittedly, the organisation has had some challenges since the start of 2020. But the finance minister appointed a new board at the end of 2021, which seeks to work towards stabilising the organisation and ensuring that it remains the prime player in SA's agricultural economy.
Efforts to stabilise Land Bank should be supported. The organisation has a long history of supporting the agricultural sector, although in the past more than two thirds of its business has been with commercial, mainly white farmers. From now on it should play a crucial role in development while maintaining its commercial presence.
Other financial organisations also have a role to play, but Land Bank's role is distinct because of its developmental mandate. There is also a business case for Land Bank. Agriculture holds great potential for growth, and over 2-million additional hectares of land could come under commercial production in the coming years.
With global demand for food and agricultural products set to remain solid for the coming years, investing in the agricultural sector is a positive step. Importantly, focusing on high-value crops would be even more rewarding, while also creating employment, a positive social good.
Plans are in place to grow SA's agriculture, but for this agenda to succeed agricultural finance is crucial. At the heart of this is the revival of Land Bank and not undermining this important organisation, which could be instrumental to inclusive growth.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA.
