Challenging times ahead for agribusiness in 2016

“Recent downgrades by investment rating agencies indicate that South Africa has reached a dangerous and critical crossroad,” says the chief executive officer of Agbiz, Dr John Purchase. The agribusiness environment will face even more challenges in 2016 than last year. Subdued local economic growth prospects, constrained consumers and weather, as well as policy and labour uncertainty will continue in a deteriorating economic, social and political environment.

“Exacerbating this imperfect situation is a major and prolonged countrywide drought, impacting negatively on both the agricultural and agribusiness environment. This is putting South Africa’s open, competitive agro-food system and its food security at considerable risk.”

According to Dr Purchase, the agribusiness environment will be faced by various challenges in terms of engagement with key land reform legislation in 2016. These challenges include:
• The finalisation of the Expropriation Bill in Parliament.
• The introduction of the Regulation of Land Holdings Bill, which proposes land ceilings and the prohibition of agricultural land ownership by foreigners into the legislative process.
• Engagement on the Preservation and Development of Agricultural Land Framework Bill, both directly with the Department of Agriculture, Forestry and Fisheries (DAFF), but also within the National Economic Development and Labour Council (Nedlac) environment.

Other critical pieces of legislation that will feature in the legislative process and affect the agribusiness environment will be:
• The Carbon Tax Bill.
• The National Skills Development and Sector Education and Training Authorities (SETA) landscape.
• The Border Management Agency Bill.
• The Liquor Amendment Bill.
• New legislation governing the water environment and giving effect to the cabinet-adopted National Water Resource Strategy Version 2 (Water Amendment Bill and Revision of the Pricing Strategy for Water Use Charges in terms of the National Water Act, 1998).
• The implementation of the AgriBEE Sector Code, once finalised.

Dr Purchase warns that considerably more needs to be done by government to instil investment confidence. “To say the least, 2016 will be extremely challenging and interesting, but the expected crises of 2016 will also provide the opportunity to the country, and government especially, to redirect its economic policy and steer the country in the right direction,” says Dr Purchase. – Press release

Read the full document here

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