High prices and green grass not enough

Job losses and consequent poverty take precedence in budgetary allocation during times of crisis, but development opportunities are often overlooked, says a prominent agricultural economist.

19 May 2021 | Agriculture

STAFF REPORTER

WINDHOEK

Elaborating on the challenges of rebuilding agriculture in Namibia, Dr Kobus Laubscher, a well-known agricultural economist, says it is a mistake to focus only on the contribution of primary agriculture to the economy.

He says changes during the year to the various sectors' contribution to the economy must be carefully analysed.

“It fluctuated significantly for the first three quarters of 2020.”

Laubscher says the coronavirus has severely disrupted Namibia's economy, which in itself places great demands on budgetary dynamics.

“It is common knowledge that one cannot wait until after the pandemic to realign the economy.”

However, he says that any realignment takes place within a very restrictive fiscal space.

“One lesson so far is that priorities need to be reviewed, as the coronavirus is [likely to become] endemic and will remain a liability.”

Priorities

In a developing economy, an extra burden rests on the shoulders of governments, namely social protection, says Laubscher.

“Job losses and consequent poverty and even persistent hunger necessarily take precedence in the allocation of the fiscus, but development opportunities are often overlooked that are necessary to effect allocation and optimise the so-called multiplier effects.”

He says agriculture is a good example, because most agricultural products need to undergo essential transformation.

“It would be a mistake to focus only on the contribution of primary agriculture to the economy.”

According to him, that contribution shrinks as an economy develops, but remains indispensable to the economy, because the real value is added outside the farm gate.

The unprocessed product is admittedly the fuel for the value chain between farm gate and the consumer's fork.

He points out that the country has undergone probably the worst droughts in human memory in recent years and rebuilding now is necessary.

“Herds had been culled and now, with better grazing and price prospects plus the expectation that these conditions will continue, farmers have decided on a growth strategy.”

He says animals have been kept in the herds and high auction prices underline this renewed confidence.

“On that side of the farm gate, the value chain is pulling its weight.”

According to him the question is, to what extent the government supports the investment decisions that farmers have already made.

Rebuilding

“This is where things go wrong, as high prices and green grass may mistakenly be seen as sufficient for rebuilding.”

He says agriculture right now needs the leverage to re-establish sustainability at farm level and could therefore claim greater contributions such as infrastructure development and greater spending on research.

Laubscher says when a farming enterprise is profitable, economic development begins in the right place.

“Profitable farms can employ their people and compensate them properly. These employees then spend their money in the rural economy.”

He says this is where the real power of the agricultural sector lies and is certainly the cheapest way to stop and reverse the economic downturn.

“What is required is to make it easier to produce food where farming is practised, namely the rural areas. In most cases, it is not necessarily about fiscal support, but mostly about getting out of the way where agriculture wants to take care of itself.”

He says that agricultural leaders are therefore right when they argue that agriculture is neglected in the allocation of the fiscus.

“They, the leaders, simply have to negotiate aggressively for changed views at the fiscus, namely to fearlessly show that the recovery of farming conditions is by no means sufficient for agriculture to play its role. They should insist that improved farming conditions are the right foundation from which to launch an economic growth revolution."

Similar News

 

Agra weaner championship resumes

5 days ago - 09 June 2021 | Agriculture

STAFF REPORTERWINDHOEKAgra Auctions recently launched the annual Agra Weaner Championship Series for 2021.The Agra Weaner Championship Series rewards Namibian producers for excellent farming practices.Agra believes...

The basics of chicken production

5 days ago - 09 June 2021 | Agriculture

STAFF REPORTERWINDHOEKPoultry farming is a fast-growing emerging farming enterprise across Namibia.Chickens are kept for the production of meat and eggs that provide a healthy source...

Many in Kavango West travel 31km for water

6 days ago - 08 June 2021 | Agriculture

NAMPA RUNDUKavango West Region Governor, Sirkka Ausiku said 32 per cent of the population in that region still travel at least 31 kilometres to access...

Climate change to blame for increase in plant pests

1 week ago - 03 June 2021 | Agriculture

ELLANIE SMIT WINDHOEKDue to the impact of climate change, plant pests that ravage...

LPO concerned about Meatco resignations

1 week ago - 02 June 2021 | Agriculture

ELLANIE SMIT WINDHOEKThe Livestock Producers Organisation (LPO) has expressed concern with regards to...

Give your chickens enough water

1 week ago - 02 June 2021 | Agriculture

STAFF REPORTER WINDHOEK Water is considered one of the most essential sources of nutrition in chicken farming.The Namibia Agriculture Union (NAU) said...

Divided we fall: ‘Factionalism’ blamed for Meatco resignations

1 week ago - 01 June 2021 | Agriculture

ELLANIE SMIT WINDHOEKAlleged deep-seated divisions among Meatco board members – including lack of consensus on opening opportunities to do business in...

Cattle marketed decline by nearly 40%

1 week ago - 01 June 2021 | Agriculture

ELLANIE SMIT WINDHOEKThe total marketing of cattle declined by 39.8% during the first quarter...

Red line removal to cost Nam N$6b

2 weeks ago - 31 May 2021 | Agriculture

ELLANIE SMIT WINDHOEKNamibia stands to lose more than N$6 billion in revenue if attempts to remove the controversial veterinary cordon fence...

Herd rebuilding continues

2 weeks ago - 31 May 2021 | Agriculture

ELLANIE SMIT WINDHOEKWith continued herd-rebuilding exercises, a further decline in cattle marketing is expected for 2021, with the Meat Board forecasting formal...

Latest News

Starlile wins Winter Cup

14 hours ago | Sports

LIMBA MUPETAMIStarlile from the Okahandja Racing Club beat the likes of You Touch My Heart (second place) and Newton Spark (third place) to the finish.Starlile...

Bronze for Du Plooy

14 hours ago | Sports

Namibia’s triathlon champion Divan du Plooy took bronze at the just-ended African continental championship in Egypt.The Namibian was competing in the Under-23 category in Sharm...

Plot prices in Keetmans nearly...

14 hours ago | Economics

The Keetmanshoop municipality has dropped the price per plot in the new Brukharos extension to N$16 900 per plot for low-income earners to afford housing.The...

President too quiet in crisis...

14 hours ago | Health

STAFF REPORTERWINDHOEKFormer health minister Dr Richard Kamwi is among those who believe that President Hage Geingob’s silence, as the country endures its worst wave of...

Covid-19: Six SA tourists die...

14 hours ago | Health

NEWS24JOHANNESBURGSix elderly tourists died from Covid-19 after 37 out of 40 travellers on a bus trip in Namibia tested positive for the coronavirus.According to Netwerk24,...

Covid-19’s impact on sports

14 hours ago | Sports

Limba MupetamiThe effects of Covid-19 continue to flow through Namibia’s health, educational, financial, and commercial institutions and the sport sector is no different.Matches and competitions...

Won’t do it - Kanalelo

14 hours ago | Sports

KickOffThe former Mamelodi Sundowns goalkeeper Fillemon ‘Ronnie’ Kanalelo worked at both Bloemfontein Celtic and Maritzburg United as a keeper trainer, and had his last coaching...

SA govt sells majority stake...

14 hours ago | Business

Nqobile Dludla - The South African government is selling a 51% stake in South African Airways (SAA) to Takatso consortium, which will initially commit more...

EDITORIAL: President must address the...

14 hours ago | Opinion

The clarion calls for President Geingob to crawl from under his rock and provide leadership insofar as the deadly surge in Covid-19 infections is concerned...

Load More