Agri budget speech reveals exciting progress for cannabis production

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Estimated reading time: 5 minutes

The budget speech delivered by the minister of agriculture, land reform and rural development (DALRRD), Thoko Didiza, touched on several important policy themes.

These included land reform, agricultural land leases, agricultural expansion, finance and the sectoral master plans. An exciting new development that is in the works is the national Cannabis Master Plan.

Agro-processing and cannabis master plans

A major theme of the budget speech was growth of the agricultural industry. The Agricultural and Agro-processing master plan is at its final stages, with sector role-players set to meet for consultation in June 2021. A plan that has not been written about much is the national Cannabis Master Plan.

The minister indicated that “an inter-departmental team comprising representatives from various departments was established to guide the development of the National Cannabis Master Plan with the DALRRD as the convener.

“The Cannabis Master Plan will be presented to the National Economic Development and Labour Council (NEDLAC) before the end of May 2021. As of October 2021, the department will begin issuing and monitoring permits to produce hemp in South Africa.”

Land reform

On the topic of land reform, the minister’s emphasis was on redistribution and applying the beneficiary selection criteria policy that emanates from the 2019 report of the Presidential Advisory Panel on Land Reform and Agriculture. The policy prioritises women, youth and people with disabilities in land redistribution.

This cohort comprises more than two-thirds of the land beneficiaries thus far in the 700 000ha that the government announced for release in October 2020. Thus far, the government has allocated 436 563ha of the 700 000ha. Notably, the minister acknowledged that some of this land is already occupied, and her department only had to formalise the leases in such occupied land parcels.

Land leases

In terms of agricultural land leases, minister Didiza recognised the frustrations that farmers have experienced over the past couple of months. Some black producers were even threatened to be removed from productive farms such as in the Rakgase, Cloete and Zigana cases.

The minister added that the aforementioned cases “had amplified the need for a complete overhaul of our system of property management as a department”. She added, “The deeds registry will also ensure that farm leases earmarked for farmers are registered to create certainty with financial institutions and interested investors.”

In terms of land restitution, minister Didiza committed to accelerating the resolution on old order claims and announced that her department had settled 240 claims in the past financial year, which covered both urban and rural claims.

Disappointingly, there was no update on land tenure developments, which is important in strengthening land rights and necessary prerequisites for investments in agriculture.

Animal and plant health

For agricultural expansion, the minister’s budget speech added to the momentum in the sector, which is supported by favourable weather conditions and increased plantings. There are prospects of another year of solid growth in the agricultural gross-value added, which, at Agbiz, we forecast at roughly 5% y/y from a higher base of 13,1% y/y in 2020.

A significant challenge that has faced the sector, which the minister noted, is animal and plant health. SA has been experiencing frequent outbreaks of brown locust, avian influenza, foot-and-mouth disease and African swine fever. These diseases tend to hinder agricultural trade and cause substantial financial losses for producers.

Unfortunately, the minister did not provide details on the long-term plan of addressing these critical challenges, but instead noted the near-term interventions being made by the state scientists and various programmes of the Agricultural Research Council and Onderstepoort Biological Products.

It is unclear if these two institutions can address the increasing incidence of animal and plant health diseases, perhaps brought about, in part, by climate change, or if there needs to be increased reliance on the private sector to address the deteriorating situation.

Strengthening of extension officers

One of the more pointed interventions on agricultural expansion was the commitment to ensure that land given to farmers and communities as part of land reform processes, is cultivated.

Also, the strengthening of the extension officers complement remains a priority, and the government intends to hire an additional 10 000 officials over the next three years. If the extension officers are well trained, they could help emerging producers in the sector.

To magnify this point, minister Didiza noted that “as committed by the minister of finance, the department and the provinces have crafted a strategy on the employment of extension officers, and we will employ 2 447 in this financial year.

“Noting the importance of regulatory services in addressing biosecurity matters in our provinces, we will employ an additional 50 animal health technicians this year.” The collaboration with private sector role-players who will mentor or provide value chain opportunities for new entrant farmers is also another point that the minister addressed.

Agricultural finances

In agricultural finance, the minister expressed the government’s commitment to stabilising the Land Bank, which has been experiencing liquidity challenges for months now. Minister Didiza said: “The Land Bank remains an important institution in supporting the agricultural sector, and we will do everything possible to secure its future.

“My department is working closely with National Treasury to work out a sustainable financial model to ensure that the Bank continues to fulfil its mandate. In the 2021 February budget, the minister of finance announced that an amount of R7 billion over the Medium-Term Expenditure Framework had been secured to support the Land Bank.

“This allocation will help to resolve the Bank’s current default and re-establish the development and transformation mandate. My department will also ensure that additional resources are diverted to the Land Bank.”

Overall, the budget speech was generally positive as it centred on the theme of private-public-partnership for the development and expansion in the sector and emphasised various programmes on which the social partners are already working collaboratively with the government. – Wandile Sihlobo, Agbiz