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Agribusinesses have an important role in rebuilding South Africa after recent unrest

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Source: Wandile Sihlobo, Agbiz, Agbiz e-newsletter 30 July 2021 (This essay first appeared on News24, 28 July2021), photo credit: Sub-Sahara Farmers Journal

We are yet to fully understand the impact and financial costs of the devastation from the recent incidents of unrest in KwaZulu-Natal and parts of Gauteng in the agricultural sector.

At a high level, it appears that primary agriculture was broadly insulated from the direct damage. Still, the disruptions in various sugar mills, bakeries, eggs businesses and milling facilities, among others, impact primary agriculture by disrupting supply chains and lowing demand from these establishments.

Small to medium scale farms that directly supplied the retailers are also affected as their typical market channel vanished in a few days. In collaboration with provincial departments and private sector players, the Department of Agriculture, Land Reform and Rural Development should assess the scale of this damage and devise potential response measures to sustain the agricultural sector in its robust form.

While there is no consensus about the motives behind the unrest and on whether these were centrally orchestrated or not, it is increasingly evident that high unemployment and inequality provided fertile socio-economic grounds for the disruptions.

Boosting inclusive growth and job creation need to be among the key response priorities for the country as we rebuild KwaZulu-Natal and parts of Gauteng that were affected by the unrest. With the current fiscal constraints, the rebuilding process will likely have to be led by the private sector players as the state has limited financial muscle to do so. And this is where the challenge begins.

For the private sector to increase investment, there need to be quick reforms in the security cluster, providing evidence that the government is taking bold steps to ensure that a repeat of the chaos, looting and destruction of public and private economic assets is prevented going forward.

Such security reforms, as well as finding and holding those responsible for the violence,will need to be done and communicated in a convincing manner in order to build confidence. For agriculture and agribusinesses, the stakes are high; this is a long-term investment sector. There needs to be an assurance of respect for property rights, addressing rural crime, and rebuilding the municipalities in the small towns that service agricultural businesses.
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