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I consider this a well-balanced budget. It addresses the key aspects of the national economy, as well as the positive attributes of the agricultural sector.

The R1,9 billion allocated for land restitution and land reform stresses government's commitment in this regard. This is good news for the Western Cape. The large financial allocation to food-aid projects bodes well for poverty relief in rural and other poor areas.

Minister Trevor Manuel acknowledges the positive economic role of the agricultural sector in the growing SA economy, but also mentions that the recent high inflation numbers that are now levelling off, can be attributed to higher food prices as a result of external factors. Mealie producers can expect that the lower producer prices of white mealies will pass on to the end-user. Secondary agri-businesses will have to be aware that the focus will be on them.

The large financial allocation for infrastructure is good news for the growing agricultural sector. It will impact positively on food security, competency, agricultural production, and input costs, which in the long term will mean better food prices for the consumer. Infrastructure investment will lead to improvement in basic services, economic growth, and will lead to job creation and poverty relief.

The additional funds that will be channelled to research and technology-transfer, means that global competency is important for government.

On the negative side, Minister Manuel did not refer to safety on farms - at present a topical issue in agricultural circles, in particular considering that the commando system is to be replaced. In the same way the tax on fuel and excise will push up production costs of wine, beer and sparkling wine. This will be assimilated into the value chain and in the end the consumer will pay more for these products. It is a pity that these tax increases are significantly higher than inflation targets.

Generally seen, the budget encourages job creation and poverty relief. Rural areas will benefit from better infrastructure and there are good signs that social and technological upliftment will increase the competency of Western Cape agriculture. This budget should create a positive environment to a better quality of life and for that the Minister of Finance deserves congratulations.

2/27/03
Hélène Rossouw

Source: Western Cape Provincial Government (http://www.westerncape.gov.za)