Head of Santam’s agricultural business unit, Tobias Doyer, believes finance minister Trevor Manuel’s budget speech was a stinging rebuke to his leftist critics.
Manuel makes it clear SA is weathering international economic turbulence precisely because of sound policies that balance welfare responsibilities with fiscal discipline. oyer believes land prices will continue to rise as farmers consolidate holdings to benefit from economies of scale, and new entrants place more pressure on the land market.
Investment in rural infrastructure has never been a government priority, and the focus on urban areas remains. But the little investment promised in farming districts is better than nothing, he says. Doyer believes Manuel remains a steadfast rock of fiscal policy in stormy seas. “We’re in for an interesting year,” he says. Absa’s head of Agribusiness Ernst Janovsky fears the introduction of an electricity levy of 2c/kWh is the beginning of a sin tax on energy, which will hurt irrigation farmers.
Meanwhile, Agri SA CEO Hans van der Merwe says Manuel’s speech focuses on future growth but fails to explain how this will take place with a lack of skills and capacity in government. He welcomed Manuel’s move to relax foreign exchange controls, which would boost foreign investor confidence. Absa economist Prof Andre Louw says government was caught with its pants down with infrastructure development, which is crucial for global competitiveness. He believes an increase in social grants will prompt the poor to spend more on food, which will cause supply and demand problems. Prof Louw also highlighted SA’s skills shortage, pointing to a recent audit that revealed a need for beefing up training and research at all levels.
