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Nation in Conversation – The Multiplier Effect – The True Value of Agriculture

  • 18 May 2016
  • 1847
  •  Nation in Conversation
  •  nasieingesprek

Anchored by Theo Vorster, CEO of Galileo Capital; the panel comprised of Prof Ferdi Meyer, Director, Bureau for Food and Agricultural Policy (BFAP); Prof Johann Kirsten, Head – Department of Agricultural Economics, Extension and Rural Development, University of Pretoria; Mike Schüssler, Director/Owner –; Prof Nick Vink, Chair, Department of Agricultural Economics, Stellenbosch University.
The panel discussed The Multiplier Effect – The True Value of Agriculture and Mike got the show on the road by explaining that the concept of GDP was “an added value concept” where the total value of a product can be measured by all the add-ons that is included from production to retail sale. 
“For example, if you take the wine industry you have to measure its impact on the economy by including the tourism component it generates,” said Nick. The panel agreed that the raw products of agriculture could not be viewed in isolation as its contribution to the GDP, but that services like, transport, packaging, refining etc., all contributed to the multiplier effect of agriculture.
“Then there is also obviously the job multiplier effect,” added Prof Kirsten.
Theo mentioned that South Africa had fallen behind Egypt and Nigeria in terms of GDP. Nick replied by saying that Egypt and the rest of Africa which has access to the Nile has access to the “one of the greatest irrigation systems in the world, which coupled with the relative political stability in the region in recent years, has lead to wheat and maize production skyrocketing.”
Ferdi said South Africa had three critical issues to address which are hindering the growth of the agriculture sector. “Political instability, trade barriers such as the simple signing of agreements and the availability and cost of resources such as water and electricity is what’s holding the sector back.”
Mike added that “we are heading to an unemployment figure of almost 10 million people. In any other country this would be regarded as a catastrophe, however our ruling parting are focusing inward on the party itself, instead of addressing the issue.”
Prof Kirsten agreed saying that “political instability influences investments for sure.”
Political Analyst Dr Piet Croucamp commented from the audience that “due to the lack of government assistance, many commercial farmers are creating their own markets overseas.”
The session was marked by robust audience participation with one member of the audience alluding to the possible collapse of the agri-sector and asked the panel for their views on that scenario.
View the full session by clicking on the links below.

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