Business News: Agriculture sector welcomes R3.9bn for black farmers

Business News: Agriculture sector welcomes R3.9bn for black farmers

- Government has set aside almost R4 billion in subsidies for black commercial farmers

- The move has been welcomed by many in the agricultural sector

- This comes as the sector lost almost 12 000 jobs in the first quarter of the year

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The South African agriculture industry has responded positively to government's pledge to allocate almost R4 billion to help black commercial farmers.

This comes after President Ramaphosa announced during his State of the Nation Address that R3.9 billion had been set aside for the Land Bank to assist these farmers. 

This is significant as the agricultural sector lost almost 12 000 jobs in the first quarter of 2019.

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"We are going to substantially expand the agriculture and agroprocessing sector by supporting key value chains and products, developing new markets and reducing our reliance on agricultural imports," the president said during his speech.

Christo van der Rheede, the deputy executive director of AgriSA, was among those who welcomed Ramaphosa's pledge, Briefly.co.za has gathered. 

However, according to Business Live, Van Der Rheede said that funding alone was not enough and that government needed to provide farmers with more support.

With the GDP shrinking by 3.2% in the first quarter of the year, there is immense pressure on Ramaphosa to stimulate the economy, These farming subsidies appear to be among the measures he hopes will achieve this. 

However, while subsidies can have many positive effects, some experts warn that there may be cons as well. For example, subsidies can sometimes increase inefficiency and reduce incentives for farmers to cut costs.

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Source: Briefly.co.za

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