Tito Mboweni wants to hear your views: Should SA develop dagga industry?

by

EDINBURGH ā€” Many South Africans were delighted on the news that private dagga consumption had been decriminalised. But, beyond the social benefits – and, some will argue, possible mental and other risks – of sharing a spliff, lies a big opportunity for the country. Cannabis is taking off as a major agricultural sector as its medicinal benefits are being identified and commercialised in Canada and elsewhere. With growing conditions ideal for the plant in South Africa, the country could be missing a trick. South Africa could be a major player in an exciting new growth sector. Taxes could be generated through formalising the industry, too. Dagga certainly seems to be on finance minister Tito Mboweni’s mind. In a re-tweet, @tito_mboweniĀ shared a link to a thoughtful piece on the subject by agriculture expert Wandile Sihlobo. The Tweet sparked vigorous debate; some reckon it’s obviously a good idea, others are worried about the logistics and the moral dilemma. Sihlobo’s piece is published here, on BizNews, with permission. Share your views, below this article. – Jackie Cameron

Should South Africa explore the cannabis market?

By Wandile Sihlobo*

The growing emphasis that agriculture should be amongst the key sectors driving the South African economy and job creation has mainly leaned on potential expansion in hectares of labour-intensive, and globally sought-after horticulture 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 are aboutĀ 1.6m to 1.8m hectares of underutilised landĀ in these provinces which could be put into full production.

Wandile Sihlobo
Wandile Sihlobo

In addition to the aforementioned crops, the changing perceptions about cannabis around the globe, and its growing value raises 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.

In a recent Constitutional Court ruling, the private use of cannabis has been decriminalised 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.

For international trade, the export markets would include the US, Canada, and China, as some regions within these countries have decriminalised cannabis. In the state of California within the US, the value of the cannabis industry was estimated atĀ $3bnĀ in 2017. Colorado and Florida were also valued at more thanĀ $1bn. In the same year, Canada spent overĀ $5bnĀ on cannabis for medical and non-medical purposes. In China – a grower of nearly half the worldā€™s legal hemp ā€“ the sales of textile fibre made from the plantā€™s stalk, totalledĀ $1.2bn.

South Africa already trades agricultural commodities with the aforementioned countries. Hence, their increasing desire for cannabis and its product is interesting as 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.

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

In the coming years, depending on whether South Africaā€™s policy position on cannabis follows the global development, theĀ ideal provincesĀ would be Eastern Cape, KwaZulu-Natal and Limpopo due to favourable climatic conditions.

About Wandile Sihlobo

Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa (Agbiz). Sihlobo is a Commissioner at the International Trade Administration Commission of South Africa (ITAC).

He is a columnist for Business Day, Fin24 and Farmers Weekly magazine. Sihlobo is a member of the South African Agricultural Economics Association.

He has previously served as an economist at Grain South Africa (Grain SA). Sihlobo holds a Master of Science degree in Agricultural Economics from Stellenbosch University.

In 2018, Agricultural Writers SA named Sihlobo an Agriculturalist of the Year. You can follow him onĀ @WandileSihlobo.

Due to medical advantages of cannabis, in an ideal world you would need pharmaceuticals to fund research. But they wont because cannabis is a serious threat to a crooked medical world. SA has the best soil for indica cannabis. Best in the world. Could create millions of jobs

Visited 292 times, 2 visit(s) today

BizNews