Agriculture sector to contract, expand in 2014
Although livestock production saw steady growth in 2013, it is expected to contract by 2.2% in 2014, before returning to its long-term trend level of around 4.2% by the end of the Medium-Term Expenditure Framework (MTEF).
The growth was attributable to a sell-off of cattle as a result of restocking given the circumstances of 2013. Institute for Public policy Research (IPPR) February’s Economy Watch notes although the 2014 economic outlook looks promising, there are still uncertainties concerning the agriculture sector, which suffered its worst drought in three decades, leading to a substantial de-stocking of the livestock herd.
Since it will take time to rebuild the herd, IPPR says “it is expected that livestock marketing and hence meat processing will take a dip”.
The Macro-Economic Framework 2014/15-2016/17, which was recently presented by the Minister of Finance, Saara Kuugongelwa Amadhila, further shows the crop farming is expected to significantly revise down the growth forecast for the sub-sector from the 1.5% quoted in the midyear review.
The use of irrigation should mitigate the impact of the adverse weather conditions and if enough rain is received throughout the year, then a positive outcome would be expected.
“Assuming Namibia experiences at least normal rains over the remainder of the MTEF period, crop farming is expected to rebound in 2014, to grow by 8% and remain relatively strong at 6.3% in the following year. This would be attributable to lagged effects of crop farming output associated with return to normal rains, as well as greater efforts to increase irrigation. After this, growth is expected to trend towards its long-term average growth rate of around 2.9% by the end of the MTEF period,” MEF 2014/15-2016/17 states in part.
The recent national annual budget announcement saw a total of N$8b being allocated to Agriculture during the 2014-2015 MTEF to fund, among others, the drought relief incentives, construction of earth dams, expansion of rural water supply and green scheme projects.
A luncheon organised by Namibia Chamber of Commerce and Industry (NCCI) in partnership with KPMG, Simonis Storm Securities (SSS) and Prime Focus Magazine, which was recently held to review the new budget, had NCCI head of advocacy and research, Leonard Kamwi, lamenting Agriculture’s low budget allocation. He said the allocation was too minimal compared to the attention the sector should receive due to the impact it has on the country’s GDP.
“We should look at economic policies and the budget in terms of incentives they create, rather than simply the goals they pursue. The difficulty with our policies is that they often lack incentives for certain groups of society,” he said.
According to him, “although the green scheme allocation is over N$224m, its beneficiaries are negligible. The focus is on increasing irrigation-based agronomic production. It is good at raising agro-economic production but not good enough to reach out to many people by its nature.
He added: “Let me use an extreme example: Imagine if only one person had the privilege to run all the green schemes benefited in the country instead of 10, 20, 50, 100, 1000. Would that be acceptable? It is perhaps unreasonable to expect the programme to benefit 10 000 farmers, not just people. However, it would also be great if these scheme farms functioned as agriculture development centres where farmers are trained, seeds or seedlings are provided and other advisory services are rendered to communal farmers. Surrounding farmers should be assisted to develop similar infrastructure to improve the yields from their own farms. Unlike the construction of offices, these irrigation infrastructures are productive assets. Thus, this programme should be scaled up.”
Sanlam Group CEO, Tertius Stears, acknowledges that the majority of Namibians depend on agricultural activities for their livelihoods. Therefore, the agricultural sector should continue receiving more fund allocation, which would go a long way in food security, alleviation of poverty, employment creation and income generation.
“However, we are fully aware of the fact that each year, Government is faced with many other competing and equally important priorities, such as health and education. As a developing nation with limited resources, it is therefore often very difficult to ensure we adequately carter for all priority areas,” Stears says.
He also notes Government cannot be expected to solely contribute to the sector and that more can be done on the back of Public Private Partnerships (PPP). Valuable agriculture-related skills, Stears believes, can be found in the private sector and used to benefit larger numbers of people through initiatives.