Minister Thoko Didiza: Economic Recovery and Employment Stimulus Packages

Speaking Notes: Minister Thoko Didiza, MP

Building a new economy: Economic Recovery and Employment Stimulus Packages

“Agriculture and Food Security Contribution as Contained in the Master Plan"

1. Setting the scene

• In the Economic Recovery Plan, the President outlined clear and practical interventions that are crucial for building a new economy and ensure recovery from the effects of the pandemic that has caused severe employment losses and food insecurities in the country.
• To achieve this, the President has called social partners to focus on three areas: (i) building essential infrastructure, (ii) stimulating employment and support export industries, (iii) creating a supportive policy environment.
• Working through private-public partnerships, the economic recovery plan has potential to attract R1 trillion investments on infrastructure, create 875 000 jobs and enhance food security, thus reducing inequality in the country.
• Ladies and gentlemen today , following the President’s address as well as the presentation of the Minister of Finance, the Ministers of Agriculture, Land Reform and Rural Development and Public Works and Infrastructure will elaborate how they will elaborate on how their sectors will contribute to the economic recovery and employment
   

2. Agriculture and Food security

• The Covid-19 pandemic has illustrated the importance of both commercial and smallholder producers in safeguarding food security and promoting self-employment in rural and peri-urban areas.
• Covid-19 regulations demonstrated the significance of supportive policy environment as these regulations provided a crucial insulation and boosted the resilience of food system.
• Moreover, Covi-19 showed the centrality of informal market traders in localizing and distributing food to low income households that lives on a hand-to-mouth on a daily basis.
• The department working with the private sector players provided a wide-ranging support to farmers and traders to keep food supply chains intact and sustain agricultural exports
• The impact of government interventions in the agricultural sector is reflected in the positive agricultural growth rate of 15.1% obtained in the second quarter of 2020. The support also boosted agricultural exports which helped the country generates foreign earning to a tune of R16.07 billion on average per month between April and August 2020, which is 23% higher than the corresponding period last year.
   

3. Agriculture’s reimagined contribution to building a new economy and employment stimulus

• Social partners in the agriculture sector are building on the momentum and unity gained in Level 5 of Covid-19 lockdown to position the sector as a champion in reconstructing and reindustrializing the economy by focusing on exports promotion, employment, food localization and expanding production capacity of commercial and smallholder farmers.
• The range of measures contained in the agriculture and agro-processing master plan will create 317 000 new jobs where majority of these jobs will be created by the private sector players in fruits, nuts, wine, vegetables and agro-processing node of food value chains.
• Expanding production and promoting export will generate R80 billion in gross production value relative to the baseline, which will help the economy recover from the pandemic.

4. Agriculture focusing on the implementation to contribute in building a new economy and employment stimulus
    

Creating a supporting policy environment

• The department of agriculture working with security and social clusters is developing a regulatory framework to enable commercial cultivation of hemp and cannabis
• As part of implementing an effective land reform programme and inclusive growth, the department has developed a beneficiary selection and land allocation policy as well as the comprehensive producer support policy, which are guiding the rapid release of land for production of food and the provision of finances to farmers. As such the department aims:
  • To launch and operationalize three funding instruments in the next 5 months
    • Blended Finance Scheme a revamped funding instrument which blends grants and loan to provide affordable production and infrastructure finance. It is going to be operationalized in partnership with commercial banks.
    • Agro-industrial Finance : Working with the IDC, the department will ensure that blending grants in addition to the loan financing for agro- processing will be in place to promote agro-processing and import replacement as well as reindustrialization of economy commencing with those  sector plan commitments such as in the poultry industry.
• To optimize export earnings and enhance marketing of agricultural products, the department has initiated the review of the Marketing of Agricultural Products Act and it is also reviewing a multitude of trade instruments to promote exports and safeguarding domestic production and processing capacity
   

Employment stimulus measures

• The department will ensure the retention of jobs through self- employment by sub- sistance farmers through input vouchers. The target will be those subsistence producers who are producing at household level in peri-urban and rural areas with a maximum land size between ¼ ha to 1 ha.
• Working with social partners, the department is working with the Solidarity Fund initiative working with Traditional Councils on interventions that focuses on communal farming areas to support small-scale and substance farmers to promote self-employment and support food security.

• The department , working with the Land Bank has commenced the relief funding applications for commercial farmers that are in distress to save jobs and provide relief to affected farmers by the pandemic. The additional investment announced by the Minister of Finance on the Land Bank is welcomed as it will ensure that farmers during this agriculture calender will receive assistance.

• The department is upscaling 8 production schemes to expand commercial production and processing using a district-based commodity value chain development approach, which will stimulate mass employment
• The department is building state capacity in extension services recruiting 10 000 extension officers over the next five years from unemployed youth and NARYSEC graduates and some to be seconded to commodity associations to promote private-public partnerships.
   

Establishing essential infrastructure and promoting exports

• Building trade facilitation infrastructure to capitalize on export opportunities presented by the African Continental Free Trade Agreement
• Focusing on removing inefficiencies in logistics to promote high value product exports
• Revitalizing irrigation schemes to increase land under irrigation and fast-track water rights