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Prof Ferdi Meyer
Mail & Guardian
28 March 2019,Johannesburg
University of Pretoria
&
Bureau for Food and Agricultural Policy
Land Reform:
Foresight – preparing for
certainties and
uncertainties
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BFAP Baseline 2018
SA’s performance in the global economy
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
China USA Russia Mexico Colombia Australia RSA Chile
% c
han
ge p
.a. 2
00
6 -
20
16
Real AG GDP growth:2006 - 2016
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-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
0
10
20
30
40
50
60
2000 2003 2006 2009 2012 2015 2018 2021 2024 2027
R b
illio
n (
real
20
00
)
% change real Ag GDP Real Agricultural GDP
Agricultural GDP in South AfricaAI, Listeria, WC Drought,High grain stocks
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NDP targets – Score sheet
NDP Target Indicator
Land reform No
Jobs & growth:High value crops
Yes
Jobs & growth:Under-utilised land, homelands etc.
No
Jobs & growthAgro –processing
Yes
Irrigation expansion of 142 000 ha NOT 500 000 ha
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BFAP Baseline 2018
High-growth industries are on track
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BFAP Baseline 2018
• SA a net exporter of agricultural products
• Horticulture leading export performance – rapid growth in Citrus exports, nuts, wool
• Significant imports: rice, poultry, palm oil, wheat
Export performance on track
02468
101214161820
Cit
rus
Gra
pes
Win
e
Po
mef
ruit
Mai
ze
Nu
ts
Wo
ol
Spir
its
& L
iqu
or
etc.
Ber
rie
s an
d S
ton
efr
uit
Bo
vin
e M
eat
Oth
er
Ban
anas
Co
tto
n
Pig
Me
at
Co
ffee
Soya
oil
& c
ake
Suga
r
Wh
eat
Pal
m O
il
Po
ult
ry M
eat
Ric
e
Net Exporters Net Importers
Bill
ion
ZA
R
2015 2016 2017 2016 20172015
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Market access for South African productsSouthAfrica
Australia New Zealand Peru Chile Argentina Uruguay
China Bilateral Bilateral Bilateral Bilateral
Hong Kong (China) Bilateral
India SACU(Plurilateral)
GSTP BilateralGSTP
GSTPMercosur-IndiaBilateral
GSTPMercosur-IndiaBilateral
Indonesia ASEAN-Australia-New Zealand
ASEAN-Australia-New Zealand
GSTP GSTP GSTP
Japan Bilateral Bilateral Bilateral
South Korea Bilateral BilateralGSTPPTN
BilateralGSTPPTN
GSTP PTN
Malaysia BilateralASEAN-Australia-New Zealand
BilateralASEAN-Australia-New Zealand
GSTP BilateralGSTP
GSTP
Philippines ASEAN-Australia-New Zealand
ASEAN-Australia-New Zealand
GSTPPTN
GSTPPTN
GSTP PTN
Thailand BilateralASEAN-Australia-New Zealand
BilateralASEAN-Australia-New Zealand
GSTP GSTP GSTP
Vietnam ASEAN-Australia-New Zealand
BilateralASEAN-Australia-New Zealand
GSTP Bilateral GSTP
SACU: Southern African Customs Union
GSTP: Global System of Trade Preferences among developing countries
PTN: Protocol on Trade Negotiation
Source: SHAFFE, 2018
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Major investments in Ag-processing on track
0
500
1000
1500
2000
2500
Tho
usa
nd
to
nn
es
Soybean crush Soybean full fat
Benchmark crush capacity (2.2 Million tonnes)(80% Utilisation of dedicated soya and dual capacity)
Benchmark crush capacity (1.70 Million tonnes)(80% Utilisation of dedicated soya capacity
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Land-reform & farmer support not on track
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
WC EC NC FS KzN NW GA MP LP
Agric GVA share versus Gov spending share
GVA share Gov spending share
• DAFF spends R11 billion per annum
• Strong focus on smallholder farmer, but support programmes lack coordination, focus, effective management etc.
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Inclusive economy
Concentrated economy
Extension of strong property rights
Weak protection of property rights
Current
Preferred
Will eventually migrate due to
societal uprising
(5-10 years)
2: Dis-investment(0-5 years)
4: Equitable and stable growth
3: Status quo; gradual decline1: Chaos …..
High risk sliding down (post 5
years)
Land reform scenario matrix
• What is needed to move from 3 to 4?• Key messages and implications to
quadrant players
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Natural Resource Base & taking stock
11 |
Source: ARC-ISCW (2004)
• SA total area: 122 million
• Agricultural land: 93 million• Freehold: 77 mil ha
• Former homelands: 15.5 mill ha (50 000 irrigation)
• Land already transferred to state or people of colour: 11.44 million.
• 66 million ha in white ownership
• 3.9 million ha owned by state and municipalities
• 1.26 Trancraa lands
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Land categories based on natural resources
12 |
Catergory of land based natural resource base
Extensive pastures
Intensive pastures
Extensive field crops
Intensive field crops
Orchards andvegetables
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Land Reform: One size does NOT fit all!
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
-
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
Extensive livestock Grains&Oilseeds(Dryland)
Grains&Oilseeds(irrigation)
Vegetables(Tomatoes etc.)
Orchards (Orangesetc.)
Gro
ss M
argi
n R
'00
0/h
a
CA
PEX
& O
PEX
; R
'00
0/h
a
Net revenue per hectare (National 5-year averages)
CAPEX OPEX Gross Margins
Farm size
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Food security - portfolio approach critical
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Platform towards integrated support
Select LayersZoom In
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36%
6%14%
37%
3%
Salaries
Business
Remittances
Pension
Grants
Farming
Other
No income
Unspecified
Farming as a source of income
41%
32%
27%
Pension and grants
Farming
Other
StatsSA 2015 Household survey 2016/17 Jobs Fund – Targeted supportprogrammes for developing farmers
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Maize consumption & marketingWhere farmers sold their 2016/17 grainShare of harvest consumed in the household
44%
34%
14%
6%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
To acommercialmill or coop
In thecommunity
Toneighbours
Other At pensiondays
Sh
are
of
Resp
on
den
ts
9%
26%
44%
8%
4%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Sh
are
of
Resp
on
den
ts
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Spatial Targeting: 300 000 ton market
18 |
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Spatial Targeting: Emerging farmers & households
19 |
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Land-use Competition
20 | Source: BFAP (2015)
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Transformation in SA is about:
- The people
- The economy
- The environment
THANK YOU