News24 | Johann Kotzé | Mr President, don’t squander farming’s moment

President Cyril Ramaphosa during a visit to the Redlands Dairy Farm in Stutterheim, Eastern Cape, last week. Ramaphosa wrote about the experience, and the need for reform in agriculture this week.

GCIS/Presidency/X.com

President Cyril Ramaphosa has identified many of the critical components required for more growth in agriculture. But the real question is whether government can make those components work together, writes Johann Kotzé.

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President Cyril Ramaphosa argued this week that South African agriculture has immense potential for further growth. This is accurate.

READ | Cyril Ramaphosa | SA’s food supply rests on white farmers – and it can’t last

The sector employs close to 950 000 people directly, supports many more across the wider value chain, earns substantial foreign exchange and remains one of the few parts of the economy capable of generating large export surpluses. Agriculture sustains rural South Africa.

The president also identified many of the critical components required for the next phase: the release of some 2.5 million hectares of state-owned agricultural land with stronger ownership rights, patient and blended finance, mentorship, improved value chain participation, and wider access to domestic and export markets.

The real question is whether South Africa can make those components work together.

Agriculture is performing well enough to justify optimism, but success should not conceal the weaknesses beneath it. Water infrastructure is under pressure, animal disease threatens livestock industries, logistics remain costly, rural crime decimates livelihoods, many emerging farmers struggle to secure finance, and climate risk is becoming harder to ignore.

South Africa has often reformed systems only once failure makes reform unavoidable. Electricity is the obvious example. Agriculture gives us an opportunity to do something different: reform a productive sector before its constraints become crises.

The central problem is increasingly one of coordination and collective participation.

‘Not a Cabinet organogram’

A farmer may receive land from one arm of the state, require finance from another institution, depend on water infrastructure managed elsewhere, use a municipal road, rely on national veterinary services to protect market access and ultimately depend on a port operated by another public entity to reach a customer abroad.

South Africa asks businesses to operate horizontally while government continues to operate vertically.

A farmer does not experience government as a Cabinet organogram. They experience it as one system, and when one part fails, the cost eventually appears on the farm’s income statement. That is why agriculture provides such a useful test of South Africa’s wider reform agenda: individual policies matter only if they combine to produce investment, output and jobs.

The release of 2.5 million hectares of state agricultural land could therefore become one of the most important reforms of the democratic era, but its success should not be measured principally by hectares transferred.

Five years from now, the more important question should be how many viable agricultural enterprises were created.

Land without working capital is not productive. Finance without secure tenure is difficult to obtain. A farm without reliable water, infrastructure, skills or market access will struggle to compete regardless of who owns it. Title is therefore not the end of land reform; it should become the foundation of an enterprise-development model that brings finance, planning, technical support and markets together from the beginning.

The same principle applies to public funding.

Government will never have enough money to finance agricultural transformation at the scale required. The more useful question is not how the state can finance more farmers directly, but how it can make more farmers financeable.

Scarce public resources should increasingly be used to reduce risk, crowd in commercial and development capital and support the infrastructure that makes agricultural enterprises viable. South Africa cannot grant-fund its way to transformation.

Preventative reform

The case for preventative reform extends beyond land and finance.

Foot-and-mouth disease has shown why animal health is not simply a veterinary matter; it is trade infrastructure. A disease outbreak can close a market faster than years of diplomacy can open one.

Water infrastructure is not merely an environmental concern but productive infrastructure. Rural safety is not only a policing issue but a question of life and death. Ports and border posts are not simply logistical assets but part of the production system of an export-oriented agricultural economy.

These distinctions matter because South Africa has too often waited until institutional weakness becomes visible as economic crisis. The lesson from electricity should be that preventative reform is cheaper than emergency reform.

That lesson is becoming more urgent as the global environment grows less forgiving. Climate volatility is increasing, agricultural trade is being reshaped by geopolitical rivalry and protectionism, and shipping routes and input markets remain vulnerable to conflicts far beyond South Africa’s borders. Food-producing capacity is once again being recognised internationally as a strategic economic asset.

South Africa enters this period with significant advantages: well-performing commercial farmers, strong commodity organisations and agribusinesses, advanced agricultural science, established financial institutions, competitive value chains and access to diverse international markets. Those advantages should not be taken for granted.

The president is correct to identify agriculture as a sector capable of delivering growth, employment, transformation and rural development. The next phase, however, will depend less on another grand strategy than on making the existing pieces work together.

Land must connect to capital, capital to viable enterprises, production to infrastructure, infrastructure to markets, and biosecurity to trade. Water and climate resilience must protect the productive base beneath all of them.

South Africa has spent much of the past decade learning how expensive institutional failure can be. Agriculture gives us the opportunity to learn something more useful: how to reform a system while it is still succeeding.

That is precisely why the time to act is now.

Johann Kotzé is the CEO of AgriSA.

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