The land reform programme is not delivering sufficiently on any of the essential requirements for agriculture to act as an engine of economic growth, according to Nick Vink, chairperson of the Department of Agricultural Economics at the University of Stellenbosch.
Vink told parliament’s finance portfolio committee these requirements are new farmers with new ideas and new initiatives, investment confidence, farmer support services in poor areas and irrigation.
However, he told MPs that although agriculture’s contribution to gross domestic product (GDP) is small and declining, the agro-industrial complex provides as much as 10% of GDP. Physical output has increased since the early 1990s, and the value of output has increased.
On the negative side, he said agricultural exports have declined in the 2000s, and agriculture is using more of the foreign exchange it generates to pay for its own imports. Johan Pienaar, Agri SA’s director of economics and trade, offered a different view, saying final consumption spending on food, drinks and tobacco can be viewed as a “multiplier”. He pointed out that for a 1% growth in the agriculture sector, the non-agriculture sector responds by more than 1%. “These empirical results support the argument of President Mbeki that SA should follow an ‘agriculture-led’ growth strategy for successful development,” he said. The committee is holding hearings on the contribution that various sectors of the economy are making to growth. – Michael Hamlyn