by Bennie van Zyl

Between a rock and a hard place

Where do we go from here?

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Agriculture in South Africa is of crucial importance because it provides food and fibre for the country’s population. It is also of strategic importance because it ensures that the country will not be overly dependent on imported food. This latter option is unreliable as it is dependent on so many variables, including the world’s weather, political upheavals, the integrity of overseas producers and exporters, and of course the price. These factors are beyond the control of the food importer.

This is one industry whose product is a daily necessity for SA’s population. In addition agricultural products earn vital foreign exchange. In 2015, SA’s agricultural value added was R84 billion, which was 2% of the country’s GDP. But this R84 billion translated into R1.65 trillion once it was put through the entire supply chain, including retail, wholesale, restaurants, transport, logistics and financing.

Despite the social and strategic importance of agriculture, politicians bandy about statements regarding expropriation of land without compensation (they seem to prefer agricultural land, and productive land at that!), while “Kill the Boer” is loudly proclaimed at public meetings. In December last year President Ramaphosa declared clearly and unambiguously that “we will take the land”. These politicians seem impervious to the harm they are doing to South Africa. But maybe they are not impervious – perhaps they think holding on to power at the next election is more important.

Ideologically-driven politics has no place in a modern economy. If economic principles are not taken into consideration, we are on a path to famine.

The principles of 2005

In 2005, TAU SA presented a discussion document to government where the future of agriculture was mapped out using sound economic principles. The intention was that this document could trigger a process where prudent principles would be utilised across the whole agricultural chain so that both local and overseas investors would have confidence in SA’s future, and where the ANC’s concerns about land for their beneficiaries could be addressed over a period of eight years. Needless to say nothing came of our proposals.

Irrespective of the government in power, agriculture should be conducted based on an immutable principle – the sustainability of food production for the whole population. Certain role players in authority have ignored this tried and tested principle, throwing it overboard to be replaced by policies based on political correctness.

Economic forces operate relentlessly and if the game is not played correctly, the adverse effects will affect everyone in South Africa. Examples of this abound, especially in Africa, and more especially in Zimbabwe, our neighbour.

No debate

There should be no debate about food security, no tinkering with something that works. If South Africa’s 35 000 odd commercial farmers successfully provide food for the country’s population of 57 million, and if there is no other group that can do this, then there should be no debate about “reforming” this formula. President Ramaphosa talks about land for “our people” yet the latest SA Institute of Race Relations survey indicates that only one percent of the population believes that land reform should be a priority of the government. People want jobs and housing and service delivery and good education for their children. They want what most people in the world want. This one percent figure is exactly the same percentage obtained by an Afro barometer survey conducted among 50 000 respondents in 36 African countries. Sixty-eight percent of South Africa’s population is already urbanised, and most of these people don’t want a farm or even a piece of ground.

We are sitting on a time bomb, not as a result of the “land question” but as a result of this “question” being converted into a vote getter for the next election. Unemployment and the failure of the government te create the much needed climate for job creation is the issue, so pandering to poor uneducated voters who are conned into believing that a “piece of land” will be the panacea for their problems is actually fraudulent.

Jobs are created by the private sector, yet the government does all in its power to frighten off investors. It is a strange anomaly. Some have said that it is the government’s aim to keep the masses poor and struggling because if they become, as former President Jacob Zuma declared, “clever blacks”, then they won’t be fooled by the “piece of land” ruse.

Eyes of the world

The world is watching this expropriation threat with interest. On August 4, the New York Times ran a scathing piece on South Africa’s deputy president David Mabuza. It was not flattering. The article outlined his rise to power. “He didn’t become what he is because of his political capability,” said a senior ANC figure in Mpumalanga province. “It was because of money and manipulation, nothing else.” The article outlines an alleged history of misspending, mismanagement, and his education department’s cheating on exam results. The article goes on to characterise the general behaviour of the ANC as being fraught with nepotism, ineptness, corruption and a seeming disregard and even contempt for ordinary citizens.

The Wall Street Journal of August 6 asks whether President Ramaphosa is following the example of Venezuela and Zimbabwe. They pick apart the ANC’s old chestnut of whites owning 87% of the land (who believes that story now?), and they say that “the ANC was founded as a revolutionary party, and the tragedy is that it won’t let the revolution end”. South African columnist Peter Bruce says Ramaphosa’s investment envoys seeking R100 billion overseas “might as well stay home”.

He repeats what TAU SA has been saying for years: “there is simply no rational or workable alternative in an open economy to the sanctity of title”. He goes on to say that “the ANC will not transform itself overnight into a delivery machine. It cannot. It is just too hopeless”.

Criticism of the government is across the board, both overseas and locally. If the SA president doesn’t listen to advice, then no one will listen to him when he goes cap in hand to the world’s financial institutions. They might help but there will be a price to pay, and that price may be too harsh for South Africans already struggling to find even one meal a day. Mr Ramaphosa is between a rock and a hard place. He will have to choose. He can’t please everybody.

TAU SA’s objective remains to establish a harmonious, prosperous agricultural environment. For this we need confidence which will only be possible in a sound policy environment. Will agriculture prosper under these circumstances? We believe it will. But sanity must prevail.

Bennie van Zyl, CEO, TAU SA

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