Invest with caution, state warned

The Department of Labour should exercise caution when investing in labour-intensive programmes in agriculture and related businesses, according to Gerhard Kriel, CEO of

Free State Agriculture.

This follows the department’s announcement of an R800 million investment in the sector in the coming year, planned in partnership with the Public Investment Corporation (PIC).

Unemployment Insurance Fund (UIF) commissioner, Teboho Maruping, said in a recent statement that the UIF had commissioned the PIC to investigate the feasibility of investing in poultry and abattoir projects around the country. The PIC is a registered financial services provider that is wholly owned by government.

Kriel said the department needed to take into account that although the food industry would continue its steady growth due to the increasing population, margins were low.

“The sector is very competitive. Imports of chicken and other food products that are not protected by import tariffs might create a non-sustainable investment with greater threats than gains. Investing in labourintensive commodities may be successful in certain geographical areas, but it is also important to investigate industries where excess processing capacity already exists.”

Kriel cited the example of India, where that country’s government had heavily invested in information technology, as major growth was expected in that industry.

It would be worthwhile for the PIC and the Department of Labour to also consider investing in this industry to create long-term jobs where entrepreneurship could flourish.

“Farming is not necessarily what young people would be interested in,” Kriel said.

The PIC had meanwhile agreed to the purchase of Karan Beef. Koos van der Ryst, Red Meat Producers’ Organisation chairperson, said if the sale went through and the feedlot was managed in a sustainable and profitable manner, the business would be supported by the organisation. – Annelie Coleman