Commercial farmers say proposed regulations to introduce compulsory black shareholding requirements for new water licences could devastate the sector. But an association representing emerging farmers said such a move would help to level the playing field.
Potential policies that bring uncertainty to food production have added to the woes of the farming sector. Stats SA’s GDP data for the first quarter of 2023 shows that the agriculture and food production sectors contracted 12.3% — the worst quarterly contraction since 2021.
The revised regulations for procedural water use licence application requirements were published in May and propose black shareholding of between 25% and 75% depending on the size of the farm applying.
African Farmers Association of South Africa (Afasa) CEO Thandeka Mbassa said while it would study the contents of the proposed regulation, the association supported interventions that aided the redistribution of resources to assist previously disadvantaged farmers.
“Afasa is behind this bill by the department 100%. The National Water Act came into place to ensure that water be used efficiently but, most importantly, to ensure equitable distribution of resources. The department picked up that in 2004; 98% of our [water] resources were in white hands,” said Mbassa.
Janse Rabie, Agri SA’s legal and policy executive, said water is the most vital input for the agriculture sector and that if farmers lost its lawful use through these proposed regulations, it would be catastrophic.
“Agri SA acknowledges that water belongs to all South Africa’s people and appreciates the importance of achieving an inclusive and representative agricultural sector in our country.
“The consequences that the draft regulations in their current form will have, with respect to agriculture and food production in South Africa, will be fatal as it will force the transfer of ownership of the ability to lawfully use water, commercial agriculture’s most crucial input factor,” said Rabie.
Rabie said these regulations were unlikely to achieve transformation in the sector as this required creating an environment that supported meaningful growth and investment in agriculture.
“This effort by the government cannot have come at a worse time for the sector and the economy, which is already reeling from the impact of load-shedding, rural crime and deteriorating public infrastructure,” he said.
In a statement, the department of water & sanitation said written comments on the proposed regulations must be submitted within 60 days from June 5.
“The amendment is to effect reforms in relation to equitable allocation of water use,” it said, adding: “The revised regulations have introduced proposed thresholds of abstraction volumes of water against the level of black ownership in applications submitted for new water use allocations. This is done to ensure that there is transformation of water use allocations to address the disparities in access to water use from apartheid.”
Access to water cannot remain a preserve of the few. There are other farmers who need access to water and that will be done in the interests of ensuring food security … but also in building an inclusive economy
— Khumbudzo Ntshavheni, minister in the Presidency
Reggie Ngcobo, spokesperson for the department of agriculture, land reform & rural development, said the proposed revision of the regulations would be the outcome of extensive consultation with affected parties.
“Various stakeholders raised a number of issues with respect to equity and accessibility of water licences … by developing farmers and beneficiaries of land. South Africa is a water-scarce country and therefore irrigation has a major role to play in agricultural development, growth and transformation as signified in the National Development Plan,” he said.
Ngcobo said the department hoped that during the consultations, users put forward their input as the department had confidence that minister Senzo Mchunu would give each due consideration.
Responding to questions at a post-cabinet briefing on Thursday, minister in the Presidency Khumbudzo Ntshavheni said Mchunu would undertake a thorough consultation process on the planned black ownership requirements before any proposal was implemented.
“Access to water cannot remain a preserve of the few. There are other farmers who need access to water and that will be done in the interests of ensuring food security … but also in building an inclusive economy,” said Ntshavheni.
In parliament on Wednesday, minister of trade, industry & competition Ebrahim Patel said his department had introduced funding mechanisms and Competition Act exemptions for farmers to collaborate in their response to energy prices to keep food prices down and maintain food security.
Patel said the department was monitoring food prices and food market operations, and assessing the effect of government decisions on prices in the sector.
“We have trade remedies and trade adjustments that are made. They include food products. In those instances, we engage with those firms affected to make sure that they make commitments not to increase prices unduly if tariffs are either increased or reduced,” said Patel.
Commenting on the weak performance of the sector in the first quarter, Agricultural Business Chamber of South Africa chief economist Wandile Sihlobo said the GDP numbers show that field crops had a tough start to the season. Excessive rain disrupted and delayed plantings by more than a month in some areas. He was optimistic about crop recovery but remained concerned about livestock.
“The cattle industry still feels the adverse effects of foot-and-mouth disease, leading to a decline in slaughtering activity. We see similar issues of animal disease challenges in the pork industry. One cannot underestimate the impact of load-shedding disruptions on poultry production.
“However, the government has introduced measures to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain and, most recently, the launch of the Agro-Energy Fund,” said Sihlobo.
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