Finance Minister Tito Mboweni has been urged to consider making more funds available to drive SA’s agriculture export objectives.
Mboweni delivers his medium-term budget policy statement (MTBPS) on Wednesday. While in its recent economic growth strategy document, the Treasury outlined plans to increase agricultural exports by R6bn over the next 10 years, the agricultural sector argues that the government has not done enough in terms of trade promotion and market access.
Many commentators suggest that SA could improve its growth prospects by taking advantage of “low-hanging fruit” such as the agricultural sector.
Jean Kotzé, the chair of the SA Berry Producers Association, said on Monday that one of the core barriers to expanding agricultural exports is the severe budgetary and capacity constraints at the department of agriculture, land reform and rural development.
Of the R7.1bn allocated to the department in the 2019 budget, only R273m was earmarked for trade promotion and market access. To compound matters, according to the latest annual report, the department is operating with a vacancy rate of 19.5%.
“With these budgetary and personnel constraints, it is not surprising that the processing of export protocols is taking anywhere from 12-17 years for one commodity to gain access to one market. Along with revenue and economic growth, these constraints are also stalling employment and skills development in the agricultural sector,” Kotzé said.
Key eastern markets
He highlighted that SA blueberries do not have access to key eastern markets at a time when demand for the fruit is growing phenomenally in those countries. This is largely because SA has not yet complied with the region's export protocols for blueberries.
Between 2013 and 2017, China's imports of blueberries increased by a compound annual growth rate of 71%.
“And our competitors have capitalised on this growth with amazing results. Although blueberries were only introduced as a crop in Peru in 2007, they are now the second-largest exporter of blueberries to China after Chile,” Kotzé said.
He said at the current rate, SA blueberries will only gain access to the Chinese market in 2045. The practical consequence of not being in these markets is the lost opportunity to create an additional 14,000 new jobs by 2023, said Kotzé. The industry is labour intensive and employs three to four workers per hectare.
He added that various other fruits and commodities were struggling with market access delays due incapacity at the department.
“Treasury’s economic strategy acknowledges the need to leverage public-private partnerships to address the constraints faced by government departments and agencies in the implementation of export requirements and in the provision of export documentation and licensing timeously. The industry is ready to play ball and waiting for government to come to the party.”
With his medium-term budget policy statement, Mboweni has an opportunity to ensure that the national budget reflects SA’s economic priorities, said Kotzé.
“In particular, this is a chance for him to back up his economic strategy with the necessary departmental resources to make R6bn in agricultural export growth a realistic, attainable goal.”
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