Missed opportunity on low hanging fruit

Agri SA notes the Medium-Term Budget Policy Statement tabled by Minister of Finance, Tito Mboweni in parliament on Thursday 28 October 2020. Given the current economic environment at a time when the globe continues to grapple with the worst pandemic in history, we welcome some of the interventions tabled in the mini budget however an opportunity to harvest low hanging fruit has been missed.

Following the President’s address where he highlighted that the agricultural sector would be one of the key sectors to kick start the economy again, we expected that national treasury would be more robust in its support for the industry.

The sector is one of the biggest employers in the economy given its labour intensive nature compared to other sectors, accounting for approximately  4.6% of total labour and as such presented an opportunity for further investment into the sector to drive up employment. The reprioritizing of fund allocations, i.e. R5 million deduction from the Ilima/Letsema projects grant and the R980 000 reduction from the land care programme grant does not bode well for this objective alongside market entry for smaller players.

Agri SA welcomes government’s commitment to cut its wage bill by R310.6 billion over four years, including the R36.5 billion cut for 2020, as this shows intent to alleviate pressure on the public purse. We also welcome the R7 billion further allocation for the Land Bank however more could have been done. The further allocation of R10.5 billion to SAA is a setback as these funds could have been channelled to industrial development and localization as per the Reconstruction and Recovery Plan set out by the President.

Effective implementation remains critical in the quest for a prosperous economic future for all.


Christo van der Rheede

Agri SA Executive director

083 389 3492

Kulani Siweya

Agri SA Agricultural economist

084 018 6019