Blueprint for sustainable agriculture
Last week Farmer’s Weekly reported on TAU SA’s blueprint for sustainable agriculture in SA. This week Stephan Hofstätter follows up with a closer look at some of the arguments contained in the document.
Farming under siege
Unfair taxes, corrupt and inept officials, plummeting municipal services, rising labour and other input costs and depressed producer prices are cited as some of the hazards facing commercial farmers in recently released Blueprint for Sustainable Agriculture. T he result is a sector that has shrunk dramatically in the last decade. Net income in 2005/06 shrunk 28,3% – the third consecutive annual contraction. Gross income for the same period is estimated at R68,5 billion, a contraction of 2,2% from the previous year, with costs reaching a total of R59,6 billion. Commercial banks have already adjusted creditworthiness criteria to reflect higher risk. “Rising interest costs as a result of a greater debt burden and rising labour costs because of the minimum wage are the main culprits,” TAU SA’s discussion document says. “Labour costs keep rising despite the fact that agriculture employs fewer workers.” he union calculated that the sector’s demise has led to 400 000 job losses. “This has meant the state has to supply infrastructure and houses for these people in the cities,” the document says. S tate interference in wage price formation was a deviation from free market principles. “Agricultural wages have become too high to maintain long-term food security,” the document says. A comparison with neighbouring countries, where wages are five to 10 times lower, shows SA is out of step with its regional trading partners. Productivity must double if wants to compete with producers such as China and India. “It is necessary to review rigid labour legislation.” High taxes threaten liquidity in the sector and discourage investors. Farmers must pay income tax, water tax, capital gains tax, excise duty, land tax, toll fees, licences for firearms and farming equipment and other levies. he union also fears a land tax will be used to depress agricultural property prices and force farmers from their land. “Taxation must be affordable and fair and in the general interest of the country as a whole to ensure the economic viability of agriculture,” the document says. “It must also be colour-blind, without exempting certain people on racial grounds.” he union believes SA’s tax bill, which will allow the fiscus to spend a projected R472 billion, or 26% of GDP, in 2006/07, does not take into account pension contributions used to finance BEE, the cost to existing company shareholders who subsidise discounted shares for a small black elite, municipalities using middle- class rate payers to subsidise poorer neighbourhoods, and private security costs. “If the total tax burden is compared with other countries it is probably 30% too high,” the document says. “is one of the reasons foreigners are reluctant to invest in SA.” I nefficient spending, and squandering of public resources through corruption, nepotism and financial mismanagement need urgent attention. “Awarding tenders to dubious contractors, family members and friends at inflated prices is grave cause for concern,” the document says. “Of particular concern is that several state institutions are performing poorly because of management deficiencies, low productivity, corruption, poor work ethic, a skills shortage and affirmative action.” he union believes replacing skilled whites with unskilled blacks in the public service sector has resulted in SA’s skills crisis. 1,1 million officials in the public service, 50% are regarded “poorly educated”, 40% “half educated” and only 2% management material, the union says. The union wants appointments at all levels and awarding of tenders to be made on merit alone, not based on race, culture or faith.
Getting our priorities straight
Commercial agriculture has a strategic value that far outweighs its 4% contribution to GDP because food security makes SA less vulnerable to foreign interference and safeguards its independence. This is why a shrinking sector will have serious implications for the whole country. But TAU believes political expediency is behind government’s failure to lend the sector support in proportion to its impact. “is the one industry whose product is a daily necessity for every inhabitant of this country. Without food we will perish.” Yet expenditure on agricultural research and support is shrinking, while social services gobble up 56% of the budget. “The strategic value of commercially producing farmers must be appreciated,” the union says in its document. “government has a responsibility to manage the agricultural environment so that every piece of farmland is used sustainably and productively.” “It is highly irresponsible to replace skilled farmers with people who are unable to produce food,” the union continues. In an increasingly famine-prone continent the government must reflect on its “ideologically driven political policy on agriculture” that has already shown it can cause serious damage to sustainable food production.
