Supplementary Budget 2020

Farmers relieved as Gigaba extends lifeline to water, agriculture

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FINANCE Minister Malusi Gigaba has given South Africa’s drought-stricken agriculture sector a lifeline thanks to billions of rand that will be injected into water infrastructure, drought relief, support for emerging black farmers as well as land reform and rural development.

In his 2018 Budget Speech delivered in Parliament on Wednesday, Gigaba pledged to continue to work with local government and municipalities to respond to the severe drought that has strained water supplies to the almost 4 million citizens of Cape Town as well as numerous smaller towns and cities across the Western Cape, Eastern Cape and Northern Cape.

“The allocations to water infrastructure and drought relief will be welcomed by the agriculture sector, which has been grappling with the worst drought in more than a century as well as higher rand-based input costs for imported fuel and equipment,” said Nico Groenewald, head of agriculture at Standard Bank.

“While South African agriculture as a whole has performed admirably amidst these challenges, certain districts in the Western, Eastern and Northern Cape as well as other parts of the country have taken considerable strain.”

National government plans to spend R125.8bn on water infrastructure and services over the next three years, while a provisional allocation of R6bn will be set aside in 2018/19 to provide preliminary drought relief and to augment public infrastructure.

A further R5.6bn has been allocated to the Comprehensive Agricultural Support Programme over the medium term to assist 435 000 subsistence and smallholder farmers.

An estimated R581.7m will be reprioritised for the black producer commercialisation programme, with 450 sustainable and profitable black commercial producers set to participate in prioritised value chains over a five-year period thanks to support from the Department of Agriculture, Forestry and Fisheries (DAFF).

To further support the transformation of the agriculture sector, Gigaba said the Department of Rural Development and Land Reform has set aside R4.2bn for the acquisition of 291 000 hectares of strategically allocated land. The department also aims to accelerate the settlement of land restitution claims with a total of 2 851 claims amounting to R10.8bn set to be finalised.

DAFF also aims to allocate R40m over the medium term expenditure framework to upgrade infrastructure and equipment for analytical services laboratories, in an effort to boost global market access for South African agricultural products.

The department hopes that this will provide assurance to South Africa’s trading partners that the country’s agricultural products meet international standards for human consumption.

Visit our Budget 2018 Special for all the news, views and analysis.

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