In his budget speech to be delivered in Parliament tomorrow, Finance Minister Tito Mboweni needs to announce concrete steps to increase agricultural exports.
In his economic strategy document released in August 2019, Minister Mboweni set a target of increasing South Africa’s agricultural exports by R6 billion over the next ten years. The time has come for Minister Mboweni to say how his budget will enable the sector to realise the targeted growth.
Market access for exportable agricultural products is vital if Treasury is to meet its agricultural sector growth target. Efforts to grow production will be in vain if we fail to expand the markets for our farmers to sell their products.
In 2019, only 3,8% of the Department of Agriculture, Land Reform and Rural Development’s R7,1 billion budget was earmarked for Trade Promotion and Market Access. This is clearly not sufficient to expand agricultural exports by R6 billion within ten years.
South African blueberries, for example, have a remarkable international reputation for their quality. Our berries are in huge demand all over the world, including places where we do not yet have access such as China, South Korea, Thailand and Vietnam.
The South African blueberry industry is one of the few industries creating new jobs in South Africa. Between 2014 and 2019, employment in the blueberry sector increased eightfold from 1,000 to 8,000.
In the coming months, we expect to announce an increase in our production and export figures, exceeding our previous projections. These numbers could be so much higher, and we could create so many more jobs, if we obtain access to new markets in the east.
However, the Department’s budgetary and capacity constraints mean that it can take anywhere from 12 to 17 years for a commodity to gain access to one market. This is stifling both export revenue growth and employment in the sector.
If export protocols continue at this pace, South African will ship its first blueberries to China in 2045. And while we wait, we will have forgone the opportunity to create 14,000 new jobs by 2023, losing out to producer countries like Chile and Peru.
In addition to expanding market access, the Department of Agriculture, Land Reform and Rural Development needs to establish clear processes for the prioritisation of goods for the export market, and to simplify and fast-track the processing of export protocols.
SABPA is committed to working with government to address these challenges facing the industry. In partnership with government, we can far surpass Treasury’s target growth. This cannot happen, however, with an under-resourced and under-capacitated department.
Apportioning additional funding to expand market access and fast-track the processing of export protocols is fundamental to achieving the growth the country desperately needs. With so much of the expenditure by the state representing sunk costs into failing entities, an investment into expanding market access has the potential to attract excellent returns for the country.
Minister Mboweni’s national budget has to reflect South Africa’s economic priorities. Now is the time to back Treasury’s strategy with the funding to bringing the vision to fruition.
