While agriculture continues to be amongst the sectors being discussed as having a potential to ignite growth and create jobs in South Africa, the government spending to the sector as a share of overall government expenditure is nowhere close to the olden days.
In the first two decades after the establishment of the Union of South Africa, government expenditure on agriculture fluctuated at fairly low levels of around 4 to 6 percent of total government expenditure. This took the form of subsidized imports of breeding stock, steam ploughs and a strong focus on the training of students both locally and abroad, amongst other things.
Spurred by the depression and the subsequent drought, government spending on agriculture increased from levels below 4 percent of total spending in the 1930’s to around 16.9 percent in 1933 (see chart below). During this period, drought relief programs were introduced to support the farmers. Furthermore, the support was aimed at infrastructure development in a broad sense, production credit and subsidized soil conservation works.
From periods around 1947, the share of government spending on agriculture decreased erratically to levels around 2.3 percent in 1980. The ability to maintain high levels of support payments to farmers came under pressure partly due to tough international economic conditions at the time. The drought of the early 1980’s, forced another increase in support to farmers soon to be followed by the introduction of a ‘land use conversion’ initiative to shift cropland in marginal production areas out of crop production into livestock farming on planted pastures.
By the early 1990’s all subsidy support to farmers was phased out as the change to a new democratic government also presented a new era of policy development in agriculture and spending in agriculture has somewhat remained at levels just below 2 percent of total government expenditure.
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