AGRI SA CALLS ON PRESIDENT ZUMA FOR STAIGHT TALK IN THE STATE OF THE NATION ADDRESS
"We do realise the importance of 2012, as the centenary year for the ruling party, but we trust that this will not deter Mr Zuma from dealing with the structural problems facing the economy in an open minded way during his upcoming state of the nation address", says Johannes Möller, president of Agri SA.
"The weakening global economic outlook admittedly does present serious challenges to the local economy and for economic growth and employment creation in particular, but it should not be used as justification to steer away from matters seriously and immediately requiring attention", he said.
Möller says that when Mr Zuma reflected on previous performances in the state of the nation address of last year he indicated that "we have a parliament that is vibrant and holds the executive accountable".
"We appreciate the few pockets of excellence that do exist in the public service but alleged wasteful expenditure running into billions of rands, a lack of clear audits for various government departments, various provincial departments being placed under administration and wide spread fraud contradict this statement by President Zuma. Needless to say that South Africa's public-sector not being perceived as amongst the 60 least corrupted in the world is tarnishing South Africa's image of an investment friendly country. We expect him to thoroughly deal with these matters in the upcoming state of the nation address", Möller added.
Möller said that, given the fact that the public service salary expenditure has doubled over the last five years, one could have expected a less bleak picture on the abovementioned matters but it would seem as if the "lack of capacity" has become standard vocabulary as a response for poor service delivery and an observed lack of policy implementation.
"The fact that two government departments i.e. Mineral Resources and Environmental Affairs are currently involved in court proceedings over the jurisdiction regarding responsibilities pertaining to mining rights also represents a sad state of affairs with respect to coordination between state departments, legislative coherence and governance in general and requires appropriate action with a view to future policy certainty", said Möller.
According to Möller, President Zuma declared 2011 a year of job creation, a process to be guided by the New Growth Path. "Meaningful inroads have not been made in this regard because official unemployment is still around 25%. As a country we need to address unemployment as a matter of urgency, taking specific cognisance of the fact that the current tax base cannot sustainably support 15 million South Africans obtaining grants from the state.
To really become a successful developmental state, domestic policies need to favour investment and employment creation. South Africa is already not a favourite host country for foreign direct investment (FDI) and recent cuts in South Africa's credit rating by Fitch and Moody's Investors Service will not be helpful in this regard, nor will the fact that South Africa is no longer one of the top 50 competitive countries according to the Global Competitiveness Index.
South Africa, having been ranked as one the worst performers in terms of labour market efficiency most certainly requires direction from President Zuma on matters such as labour legislation, minimum wages, especially for new entrants into the labour market, housing arrangements, tenure security and annual wage agreements. Political utterances on matters such as nationalisation and land reform will also have to become more subdued if much needed FDI is to be enhanced. Predictability, clarity and certainty on policies will go a long way in supporting the economy at large and employment creation in particular. "We trust that Mr Zuma will firmly deal with these matters," Möller said.
It is generally recognised that small and medium sized businesses have a relatively large impact on reducing unemployment which is a typical characteristic of agriculture. Apart from a multitude of compliance difficulties which such entrepreneurs have to face it is also a disturbing feature of the policy environment that the "ease" of doing business in South Africa has also declined. The biggest contributors for this situation are difficulties associated with trading across borders, registering property, enforcing contracts and starting a business.
The cost of doing business is an even bigger concern. The cumulative effect of excessive rises in administered prices - administered price increases becoming a multiple of general inflation - requires a coordinated approach and speedy actions because of the excessive impact of the cost on economic activity in South Africa. "Water, electricity and fuel are all subjected to administered prices and at the same time key determinants of the economic survival of the agricultural sector", Möller said.
"We took note of the Diagnostic Overview and the subsequent National Development Plan (NDP) - Vision 2030 compiled by the National Planning Commission. We agree, as called for in the NDP, that a new story for South Africa should be written and we agree that a pivotal role should be assigned to the agricultural sector in this regard. The agricultural sector will accept the challenge posed by the NDP to create 200 000 additional jobs by 2030.
"What is needed though is collaboration between government and the agricultural sector to exploit the un- and underutilised potential. Rural development can be enhanced by for example, utilising the irrigation potential still remaining. Secondary agriculture can also substantially contribute towards rural development and increased opportunities for some of the most deprived communities.
"Agri SA took note of serious allegations lodged at agriculture in recent months and especially during the past weekend and the subsequent call for stricter labour legislation and penalties to be applied with respect to farmers who allegedly transgress labour legislation. Although our organisation is in favour of the law to be upheld it has become clear in recent times that isolated incidents pertaining to the labour dispensation in the agriculture are maliciously elevated as portraying a general situation in the sector.
Agri SA is, therefore, supportive of objective research by which current labour practices can be assessed and on which policy positions can be based. Agri SA calls on government to involve the agricultural sector in processes to deal with labour issues instead of reverting to threats which will not serve the interest of employment creation in the sector.
"The protection and utilisation of natural resources should be clear in terms of legislation and also applied as intended for example protecting water quality. Agri SA has serious concerns about the way in which competing demands on scarce high potential agricultural land is infringing upon present and future food production. A serious re-assessment of current approaches is required, also with respect to the allocation and transfer of water rights.
"Commercial agriculture is currently receiving very little support and protection in relation to competing farmers in other food exporting countries. One of the ways by which investment in South Africa's agricultural production capacity can be protected and enhanced, is by means of effective disaster relief measures. Although we welcome fiscal allocations for this purpose, administrative inefficiencies seem to hamper effective delivery in this regard.
"High on the agenda for government as well as for landowners is clearer strategic direction regarding property rights, and more specifically land reform proposals currently under consideration. This is a highly contentious and emotive issue requiring utmost circumspection. The current process in relation to the Green Paper on Land Reform should be allowed sufficient time for all interest parties to reach an amicable and sustainable agreement.
"The absence of a safe and secure environment is leading to farmers having to incur additional cost to safeguard lives and assets. As stated in the NDP, safety and confidence in the criminal justice system are important preconditions for the agricultural sector to make a positive contribution to political imperatives such as food security, employment and poverty alleviation", Möller said.
Statement issued by Mr Johannes Möller, President Agri SA, February 6 2012
Click here to sign up to receive our free daily headline email newsletter
