Budget gives more support for agriculture and land reform

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The government has emphasised the need to support the agricultural sector as part of efforts to promote faster and sustained inclusive economic growth.

The sector is seen as crucial in the drive to address the challenges of unemployment, poverty and inequality. 

In his budget speech on Wednesday, finance minister Tito Mboweni said that over the medium term, the government has allocated R495m to the department of agriculture, land reform and rural development to respond to biosecurity threats, and revitalise laboratories and quarantine stations to strengthen inspection services at ports of entry. This will improve compliance with international standards and support exports.

SA was recently hit by an outbreak of foot-and-mouth disease resulting in the World Organisation for Animal Health suspending the country’s disease-free zone status. Neighbouring countries, Zimbabwe, Botswana, Namibia, eSwatini and Mozambique, announced a ban on SA meat imports pending the containment of the disease. The SA beef industry is crucial to the economy and generates more than R2bn in exports a year.

In his speech, Mboweni said an additional R500m is to be reprioritised over the medium term for the department to finalise outstanding land restitution claims. 

This comes amid raging debate on land expropriation without compensation, which has rattled investors. The ANC resolved in 2017 to back expropriation of land without compensation as a way of accelerating land reform and addressing skewed ownership patterns that have changed little since SA’s first democratic elections in 1994. Parliament’s ad hoc committee looking into the matter has published a draft bill to amend section 25 of the constitution, and will begin holding public hearings on Friday.

The department’s expenditure is expected to increase at an average annual rate of 2.4%, from R17.2bn in 2019/2020 to R18.5bn in 2022/2023. According to budget documents, the department’s focus on providing redress and equitable access to land is far reaching in that these provisions contribute to ensuring inclusive and sustainable economic development.

Over the medium term, as part of the land restitution programme, the department expects to finalise 1,411 restitution claims at a cost of R8.7bn, which accounts for 16.3% of the total budget. 

The department will focus on providing landless South Africans access to land and promoting agrarian transformation. 

In this regard, over the period ahead, the department aims to acquire approximately 312,218ha of strategically located land, and provide agricultural inputs and infrastructure to make resettled farms productive. For this purpose, R2.9bn will be transferred to the agricultural land holding account over the medium-term expenditure framework (MTEF) period. 

Since the initiative began in 2008/2009, about 1,675 farms have been created from more than 4.9-million hectares of land acquired. According to budget documents, to streamline the provision of agricultural finance, the department will transfer R1.2bn over the MTEF period to the Land Bank, which will enable the institution to offer blended finance (a combination of government grants and loans at cheaper rates) to emerging black farmers.