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2 minute read
9 Apr 2019
3:17 pm

SA has millions of hectares of underused land, and dagga will happily grow there

Moneyweb

Underutilised land close to the size of the Kruger National Park could be put into full production.

Aerial view taken on September 19, 2018 shows farmers with their specially developed harvesting machines cropping a cannabis field in Naundorf, eastern Germany. The Mariplant company, a subsidiary of Canadian producer Maricann, cultivates the legal medical cannabis on around 170 hectares to gain the cannabidiol substance. Picture: AFP PHOTO

Increasing acknowledgement that agriculture should be among the key sectors driving the economy and job creation in South Africa has leaned mainly on potential expansion in hectares of labour-intensive and globally sought-after horticultural products, as well as traditional grains and oilseeds.

The provinces that could assist in realising this goal are KwaZulu-Natal, the Eastern Cape and Limpopo. There is an estimated 1.6 million to 1.8 million hectares of underutilised land in these provinces that could be put into full production. (The Kruger Park is actually a bit larger, at nearly 2 million hectares.)

In addition to the aforementioned crops, the changing perceptions about cannabis around the globe – and its growing value – raise a question of whether South Africa should put a concerted effort into research on this crop so that policymakers can better assess if its production benefits could be balanced by measures to mitigate unintended consequences.

Controlled trade and medicinal use

A recent Constitutional Court ruling decriminalised the private use of cannabis in South Africa, but the conditions and boundaries still need to be considered and legislated. Furthermore, the decriminalisation for private use might not be where the commercial value lies. The focus should rather be on exploring the possible benefits for the country through the controlled international trade in cannabis and its products, and also medicinal-use purposes in the domestic market.

Potential export markets include the US, Canada and China, as some regions within these countries have decriminalised cannabis. In the state of California in the US, the value of the cannabis industry was estimated at $3 billion in 2017. Colorado and Florida were valued at more than $1 billion each.

In the same year, Canada spent over $5 billion on cannabis for medical and non-medical purposes.

In China – which grows nearly half the world’s legal hemp – sales of textile fibre made from the plant’s stalk totalled $1.2 billion in 2017.

South Africa already trades agricultural commodities with these countries. Their increasing desire for cannabis and its product is thus interesting. It would offer extra value if South Africa was to follow the route of producing the crop for international trade and medicinal use within a clearly regulated environment.

Research first

I am not arguing for any particular policy position regarding cannabis, but rather for increased research that would assist policymakers in evaluating the benefits, and possible unintended consequences, of growing and trading cannabis. The research should take stock of the changing perceptions surrounding this crop globally, as well as its growing demand and commercial value.

In the coming years, depending on whether South Africa’s policy position on cannabis follows global developments, the ideal provinces would be the Eastern Cape, KwaZulu-Natal and Limpopo due to favourable climatic conditions.

Wandile Sihlobo is an agricultural economist and head of research at Agbiz.

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