TRANSFORMATION IN THE TIME OF COVID-19

I must admit that when I wrote my last Column in March, just before South Africa entered into the Covid-19 lockdown, I was under the impression that we will go into a short and disruptive lockdown, but re-emerge after only a few weeks to continue with our lives as before. But after 60 days of lockdown under various levels (First Level 5 and currently Level 4, with Level 3 commencing in June), we now know that things are working out differently. The fight against Covid-19 is a long-term challenge and will inevitably have long-term consequences for our country.
A recent paper by the Centre for Development and Enterprise (CDE) argues that the damage caused by COVID 19 and the subsequent responses in fighting it, will cause long-term damage to our economy. We might not see the preferred “V-shaped” recovery all governments around the world would like to see, but rather an “L-shaped” trajectory, which implies a drop in economic activity with very slow growth from the lower base going forward. If this “L-shaped” future is true, the CDE paper argues the role and nature of the South African government will be fundamentally changed going forward.

The CDE paper argues that the state will be faced with a smaller tax base and will, therefore, not be able to fulfil its preferred role as a Developmental State. Government will have to readjust to a role of focussing on providing basic infrastructure and services. This role will also have to be in a much closer relationship to the private sector than was the case in our recent pre-Covid-19 dispensation.

If this scenario is correct, one is left wondering what the future will hold for South Africa’s longstanding project of societal transformation: The Government-led drive to create a more equal and representative society where the scars of apartheid are less glaring. Land reform and agricultural transformation is a key sub-component of this larger transformation project.

In the agricultural sector we are also directly affected by the economic hardship experienced throughout the economy. Several LREAD clients are dependent on funding from the Land Bank, but two recent investment downgrades for the Land Bank resulted in a reduced capacity for new business. Similarly, the wine industry has been dealt a huge blow with the restrictions on trade imposed on it by the Covid-19 regulations. This also affects black wine growers and impacts negatively on any current or planned transformation initiatives.
If the CDE’s argument for a refocused government holds to be true, we could potentially expect less government focus and financial support for agricultural transformation, but that does not make the need for transformation any less urgent.

From where I sit, and with the information currently at hand, it seems that partnerships between the existing commercial sector and new black farmers will be crucial going forward.

Fortunately this is not new news for the agricultural sector. The idea and willingness for partnerships is already well established, and I can attest to this fact through the clients I engage with and provide support services to. (Just one example would be the Witzenberg PALS Initiative in Ceres where the private sector is funding a permanent office with staff with the sole purpose of driving and supporting agricultural transformation in the Witzenberg area). In the Western Cape, where I work, but also nationally, there are longstanding and strong relationships between organised agriculture, commercial agriculture, industry bodies, new black farmers and government institutions. These relationships will become increasingly important in driving sustainable agricultural transformation.

It might be true that Covid-19 will change our society and way of living forever but it is also true that transformation in South Africa is essential for a prosperous future with or without the Covid-19 challenge.