Agriculture spend to increase to R30bn in next three years

Cape Town – Government allocated R26.5bn towards agriculture, rural development and land reform in the 2017/18 budget. 

Spending in this sector will increase at an average of 4.7% annually and is expected to amount to R29.8bn by 2019/20. 

In his 2017 Budget Review, Finance Minister Pravin Gordhan said government will, over the next three years, spend more than R5.5bn on conditional grants to the Comprehensive Agricultural Support Programme. This programme is expected to provide 435 000 subsistence and smallholder farmers with equipment, fencing, fertilisers and seedlings and repairs to flood-damaged infrastructure. 

The Department of Rural Development and Land Reform, on the other hand, will intensify the so-called One Household One Hectare-initiative to provide land to landless people and fast-track agri-parks in district municipalities. 

In addition, the department will, in areas where land has been distributed, provide mechanised irrigation, mentorship and inputs so that redistributed land becomes productive and profitable. 

About R4.3bn will be spent on this programme over the medium term. Since the inception of programme in the 2008/09 financial year, more than 4.7m hectares of land have been acquired for redistribution and 1 496 farms have been created, Gordhan said. 

Outlook for agriculture 

Although the drought over two successive season has led to falling output in the sector, the outlook is positive with good rains returning to parts of the country, Gordhan said. 

“Much depends, however, on the containment of the current spread of the fall armyworm, which threatens cereal crop production. Robust output growth in agriculture will have a positive impact on other sectors of the economy and on household consumption.” 

Expanding agriculture and accelerating land reform 

In his 2017 Budget Review, Gordhan also said comprehensive land reform that promotes extensive cultivation of every hectare while at the same time resolving land rights issues under all tenure systems can significantly transform the agriculture sector. 

“Such initiatives can open broad new markets and employ millions of South Africans living in rural areas.” 

Gordhan said National Treasury is also considering the feasibility of agricultural insurance for poor farmers to protect them against economic shocks and natural disasters. 

“It is envisaged that a pilot project will begin in the third quarter of 2017.” 

* Visit our Budget Special for all the budget news and in-depth analysis.

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