THE number of commercial farmers in SA would decline sharply from the current 40000 to 15000 in the next 15 to 20 years due to unfriendly agriculture policies and curbs on land ownership unless the government rethought the strategic importance of the sector, Absa warned yesterday.

A supportive, well-considered agricultural policy was needed for farmers to take advantage of positive global demand for commodities which in turn was driving investment in the sector, it said.

"Without a sound agricultural sector, no country can produce sufficient food for its inhabitants," Ernst Janovsky, the head of Absa AgriBusiness, warned at the release of the bank's agriculture outlook for the next five years.

He said the agricultural sector also had significant potential to create jobs.

Mthobeli Mxotwa, spokesman for Rural Development and Land Reform Minister Gugile Nkwinti, said the government's intention was not to reduce the number of commercial farmers and their productive levels through land reform and land ownership restrictions.

"In fact, Mr Nkwinti has invited farmers to make presentations about acceptable farm sizes for various commodities to inform policy," he said.

Mr Mxotwa said there was extensive consultation with commercial farmers and their structures to avoid implementing a land distribution programme that would threaten food security.

"That is why Mr Nkwinti and his colleague, Agriculture Minister Tina Joemat-Pettersson, are talking to all the agriculture stakeholders to allay any such unfounded fears and negative perceptions about the future of commercial farming and land access."

Mr Janovsky said it was strange that the government had identified the sector as a viable tool for job creation but proposed restrictions on land access which would impede efficient production. He said it was important that "the barriers preventing the agricultural sector from functioning optimally" were removed.

The government was unable to maintain agricultural infrastructure and services such as effective veterinary services to fight outbreaks of avian flu, Rift Valley fever and foot and mouth disease, which were crippling exports.

Labour laws for the agricultural sector were also inhibitive as they were extending special rights to farm workers - including the right to undertake additional economic activity on the farm - which was not the case in other sectors. This was discouraging farmers from expanding operations and hiring more people.

As a result, farmers were turning to technologically advanced farming methods, including the use of genetically modified seed to increase yields and the use of machinery to plant and process.

"Rather than waving a stick, the government should be exploring various incentives and offering carrots to encourage the agricultural sector to invest into their farming businesses and employ more people," Mr Janovsky said.

Dr John Purchase, CEO of the Agriculture Business Chamber, said it shared the concerns around the politically sensitive issues of land reform, water rights and the four labour amendment bills which created uncertainty and would foster a reluctance to invest in the sector. Other issues such as huge electricity price hikes and deteriorating rural infrastructure also needed attention.

"Suboptimal investment will limit growth prospects, which in turn would lead to a further shedding of jobs in the primary agriculture sector, as has been happening over the past few decades already," he said.