Agbiz chief economist Wandile Sihlobo said farmers and agribusinesses have seen an increase in transaction costs because of the failures to improve the road networks across the rural towns of South Africa.
MUNICIPAL-level issues continue to constrain the South African farming sector and agribusinesses, says the Agricultural Business Chamber of SA (Agbiz).
Agbiz chief economist Wandile Sihlobo said that in the various towns where they have engaged in farmers meetings with agribusinesses recently, it became clear that the issue of road maintenance was a top priority.
Sihlobo said the farmers and agribusinesses saw an increase in transaction costs because of the failures to improve the road networks across the rural towns of South Africa.
“While we did not visit all the provinces this past week, and were primarily in the Western and Northern Cape provinces, our observations, specifically in the Northern Cape, mirror what we regularly see in the likes of the Free State and Eastern Cape, among others,” he said.
“For farmers to bring into their farms the much-needed inputs, regardless of the commodities they specialise in, the roads must be in good condition. Equally, to deliver goods to market, the roads must be in a good state,” Sihlobo said.
Agbiz said another aspect that continued to linger in conversations with farmers and agribusiness on the ground was the need for better functioning municipalities and clean towns that not only relied on the existing businesses and residents, but could also attract tourists.
It said such required effective management of the municipalities, service delivery, and maintenance of the water infrastructure, among other interventions.
“The issue of crime also remains a lingering point, which again shows that there is a lot more work required to get the small towns and the farming villages to be in a better position to continue with their operations and also bring in other activities that would increase employment and demand for various products in each town, and thus also increase job creation,” he pointed out.
This comes after President Cyril Ramaphosa, in his Opening of Parliament Address last month, noted that the seventh democratic administration would focus on improving municipal service delivery including through the use of the government reform implementation co-ordinating unit, Operation Vulindlela.
Agbiz said it believed that this work was urgent.
Sihlobo said that as the Government of National Unity (GNU) got ahead with its work, the focus should be on the urgent issues of the day and the long-standing and yet unresolved issues such as road maintenance and effective management of municipalities remained important matters.
“We should also emphasise that these issues not only arise from our observations and on-the-ground interactions with stakeholders, but also through the Agbiz/IDC Agribusiness Confidence Index, a sentiment indicator in the sector that has consistently placed the issue of small towns and municipalities as major issues of concern,” he warned.
In recent years, the agricultural sector also contended with myriad challenges that included animal disease outbreaks. This problem laid bare the need for a comprehensive review of South Africa’s biosecurity strategy. Equally, efficiency at the ports remained important as the sector was export oriented and must remain competitive in the various markets that South Africa enjoys access to.
