WANDILE SIHLOBO: This is how Cyril Ramaphosa’s speech affects agriculture

My agricultural take on President Cyril Ramaphosa’s state of the nation address (Sona) is threefold.

The president reaffirmed the government’s commitment to the various sectoral master plans that are being developed, with specific mention of the textile and clothing, sugar, and poultry master plans. These are industries that have been under pressure in the recent past, partly because of rising input costs and stiff competition from imported products.

Trade policy has a role in stabilising these industries. It is highlighted in the master plans that leveraging public-private partnerships is key to ensuring that plans are not just drafted on paper and shelved but that there is a commitment to execution.

The president also noted that the government will implement recommendations from the presidential advisory panel on land reform and agriculture to accelerate land redistribution, expand agricultural production and transform the industry.

Not all proposals made in the report will require legislative amendments — a long process that requires wide-ranging consultations. The following do not require legislative amendments, merely political will and stakeholder commitment:

Create innovative financing mechanisms;
Create a land register to house donations;
Identify and release state land;
Conduct a land audit;
Subdivide land already acquired by the state;
Provide tenure grants for certain occupiers;
Root out corruption in the department of agriculture, land reform & rural development;
Reallocate water rights in conjunction with land allocation; and
Finalise outstanding restitution and labour tenant claims.

The ongoing debate about section 25 of the constitution is the most contentious issue in SA’s land reform and agricultural policy circles. I hope an unequivocal policy direction will emerge in the next months as the parliamentary ad hoc committee on section 25 finalises its work and reports to the National Assembly. Whatever decisions will be taken, legislators should recognise that SA’s agricultural sector is capital intensive. Hence, to achieve growth and prosperity the policies the country adopts must attract capital investment.

The president noted that “this year we will open up and regulate the commercial use of hemp products ... thereby providing opportunities for small-scale farmers, formulating policy on the use of cannabis products for medicinal purposes and building this industry in line with global trends. The regulatory steps will soon be announced by the relevant ministers.”

SA is not the only African country that is taking an interest in cannabis. Several African countries have in the recent past reformed their cannabis regulations, moving away from it being a prohibited drug to a source of income as an exportable commodity. This seems to be particularly the case for SA, though it is still unclear how much revenue the country can derive from this plant.

Such countries include Lesotho, which was the first African country to issue licences for the cultivation of medical cannabis in 2017. Zimbabwe issued its first cannabis licence in March 2019. Zambia is the latest country to legalise medical cannabis, announcing in December 2019 that medical cannabis for export would be permitted in the country. Eswatini has also put in place a draft bill regulating cannabis. Uganda has taken positive steps towards legalisation of medical cannabis, looking at formalising the process in 2020. Malawi is making strides in putting in place its own licensing regime.

As these agricultural focal areas of the state of the nation address present relevant policy areas that could expand SA’s agricultural fortunes, they should resonate with agricultural and agribusiness stakeholders as well as venture capitalists. Swift formulation and implementation of policies will be critical.

• Sihlobo is chief economist of the Agricultural Business Chamber of SA and author of Finding Common Ground: Land, Equity and Agriculture.