ECDC’s Phakamisa George and Mlamli Nodada share their insights on the areas that need to improve to support the budding agro-processing sector’s development in the Eastern Cape.

The Eastern Cape’s economy needs to diversify away from the automotive sector to improve chances of weathering economic storms.

The agro-processing sector is touted as one that could help diversify the province’s economy and create jobs on a large scale. However, slow progress in infrastructure development could prove a threat to the sector’s development in the province. Infrastructure remains the missing link in supporting such initiatives into profit maximising ventures.

According to AsgiSA Eastern Cape (EC), lack of proper roads alone increases transportation costs by up to 50%, thereby diminishing revenues and profits.

Agro-processing able to advance rural development

To meet the development goals as set out in the Provincial Government Development Programme (PGDP) and to advance agrarian transformation and to diversify our manufacturing sector, agro-processing is the most viable option in the Eastern Cape as it is capable of advancing rural development.

As the Eastern Cape Development Corporation (ECDC), our view is that we can no longer depend on the automotive sector. Attracting and keeping the automotive sector here is also hinged on various aspects such as incentives from the Department of Trade and Industry (the dti).

If there is doubt from the automotive industry on the incentives the department offers it means there is uncertainty on the Eastern Cape economy.

Ability to create jobs at each stratum of value chain

Various development stakeholders identified agro-processing as a catalyst pivotal to turn around the province’s economy. This sector has potential to create subsectors and can create employment at each stratum of its value chain.

Developing agri-business is especially a good opportunity because it comes at a time when commercial farming productivity countrywide is projected to be diminishing, a situation that could lead to food shortages.

The projected commercial farming productivity shrinkage could lead to food demand exceeding supply in the next decade. Eastern Cape’s agricultural sector, if developed, could be a mitigating factor. Initiatives by AsgiSA EC have already improved food security in the Mzimvubu Basin in the former Transkei.

Eastern Cape endowed with massive tracts of arable land

The Eastern Cape is fertile ground for developing agriculture to supply agro-processing because it is endowed with massive tracts of arable land that is still underutilised and untapped.

For this reason, when we talk about development in a largely rural province such as the Eastern Cape and explore the various sectors you would not miss agro-processing. The sector has massive potential to create jobs and food security and it relies on agricultural inputs.

Thus far much of the province’s primary produce is shipped to other provinces for value addition and processing.

If the Eastern Cape was another country, it would be on the negative side of balance of payments because we buy back our agriculture products produced here at a higher price.

The result is that value in terms of jobs created is added elsewhere, and those provinces enjoy the growth generated from raw materials produced by the Eastern Cape.

The development of agro-processing means that jobs can be created whereas otherwise we would have only created seasonal jobs in the agricultural sector or jobs would have been in other provinces.

Provincial government’s new resolve to turn around the meagre economic contribution of rural areas in the Eastern Cape through agrarian transformation must be applauded and can best be supported by agro-processing.

It is the best and unambiguously most viable means towards bridging the economic gap and getting rural communities into mainstream economic activity through commercial farming activities.

We support the development of the agro-processing sector and in a move that is meant to put our money where our mouths are, ECDC is putting resources into research.

Investing in agro-processing is an opportunity for us to innovate and carve a niche for ourselves in areas such as renewable energy and cosmetics and not be limited to food and conventional products.

Through trials we have been involved in Queenstown, East London and Port Elizabeth, as ECDC we have seen that agro-processing is capable of creating a green industry.