Government’s P14.5 billion Economic Recovery and Transformation Plan (ERTP) will have P1.95 billion set aside for improving domestic food production to ensure a higher degree of self-sufficiency, BusinessWeek has established.
Over the years, government’s efforts to boost agribusiness and food self-sufficiency through programmes such as the Integrated Support Programme for Arable Agriculture Development (ISPAAD), the Livestock Management and Infrastructure Development (LIMID), the Young Farmers Fund and others have had muted success.
According to the final ERTP that Parliament approved, the average growth rate of the agricultural sector since the beginning of NDP 11 was 2.5 percent, making it the slowest growing sector of the economy, while its share of GDP has been stagnant, at around two percent. However, the sector also provides job opportunities for some 80,000 adults or almost 12% of the total employed population.
The ERTP plans to pump P1.95 billion into various projects and initiatives to raise the sector’s performance after it was identified as a priority cluster by the government.
Presenting the 2021 budget speech on Monday, Finance and Economic Development minister Thapelo Matsheka said the experience of 2020 with restrictions on cross-border trade had demonstrated the need for improved domestic food production to achieve a higher degree of self-sufficiency in selected products.
In the upcoming 2021-2022 fiscal year, funding will be made available for the construction and design of 12 steel grain silos with an overall storage capacity of 60,000 metric tonnes at the Pandamatenga Special Economic Zone, which will be completed by August this year. Once completed, Matsheka said the grain silos would
Pandamatenga is one of the Special Economic Zone projects that are expected to attract both domestic and foreign investment and diversify the economic and export base beyond mining, thereby creating job opportunities.
Critical water and road infrastructure projects have also been prioritised through the Public-Private Partnership programme, with the private sector expected to develop Expressions of Interest to partner government.
Government has also imposed import restrictions which are facilitated through border closures and regulation of imports of grains and cereals through local purchase requirements thresholds.
“The coverage and threshold of these regulations are reviewed from time to time, considering the production capabilities of local producers,” he said.
Matsheka acknowledged that high levels of agricultural spending have not yielded the anticipated results in terms of increased output and efficiency.
He said the government had decided to review and re-evaluate the agricultural subsidy schemes such as ISPAAD and the LIMID programmes.
“In the agricultural sector, the government continued to finance various activities and programmes which produced mixed results,” he said.
“It is anticipated that going forward, subsidies and support will be tied to the achievement of output rather than simply subsidising inputs, and support for commercially-focused agriculture.”
Matsheka said besides the funding and policy interventions the government would continue to negotiate and secure global markets for locally produced goods and services.