Sona delivered promising message for South Africa’s agricultural community

The South African farming sector is resilient. We have faced numerous challenges in the past, and the sector has powered through despite high costs for farming family businesses and agribusinesses most times. However, the message for the agriculture sector in the State of the Nation Address (Sona) was promising.

We pride ourselves on being a sector that is among the top 40 global agricultural exporters – the only African country on that list – ensuring that South Africa is the most food-secure country in sub-Saharan Africa, at least at a national level, and the sector has more than doubled in value since 1994.

The agricultural sector and its value chain employ more than a million people and generate numerous positive spillovers to agricultural towns and interlinked businesses. But for this momentum to be sustained we need to address the basics, which pose significant challenges for the sector. Rural crime, inept municipal service delivery, crumbling water infrastructure, the need for additional export markets, and animal diseases are among the key pressing challenges facing the sector.

Thankfully, some of these were highlighted in the Sona. These mentions are important because they provide a key roadmap for the government’s programme of work and priorities.

Logistics improvements

For example, President Cyril Ramaphosa stated: “We have made progress in improving the performance of our ports and freight rail lines, steadily increasing the volume of goods that we move in and out of our country. We have restored our passenger rail system. More and more commuters are now able to travel to work on new, locally made trains, significantly reducing their transport costs. We are investing across our country in roads, bridges, rail lines, ports, dams, wind and solar farms.”

These logistics improvements are key to sustaining the agricultural sector. We cannot talk about boosting exports without a clearer focus on port efficiency and on improving road and railway conditions.

Organised business, organised agriculture and various stakeholders have been part of collaborative efforts with Transnet to improve the ports. There remains much work to be done on roads. Many agricultural towns have crumbling roads that impose high costs on agribusinesses and local farming. The municipalities and provincial governments will need to heed the President’s message and follow through on the road infrastructure aspect; it remains key to supporting agricultural and many other manufacturing businesses.

The President also stated: “To ensure water security in the long term, we are building new dams and upgrading existing infrastructure. We have committed more than R156-billion in public funding for water and sanitation infrastructure alone over the next three years. The construction of the Lesotho Highlands Water Project and other large-scale projects like the Ntabelanga Dam, part of the Mzimvubu Water Project in the Eastern Cape, is advancing. And we are in the final stages of establishing a National Water Resource Infrastructure Agency to effectively manage the country’s water infrastructure and to mobilise funding for water infrastructure.”

This remains key, and continuous momentum on it is vital, not only for the agricultural sector, but also for many other sectors of our economy and communities.

Trade policy

Another key point that emerged was the recognition of trade’s importance in boosting South Africa’s agricultural growth. The President highlighted that: “Our trade policy is aimed at promoting sustainable development, growth and strengthening our international partnerships. In a world where countries are looking to diversify their supply chains, we have an opportunity to ramp up our exports across the globe.”

No one in South Africa’s agriculture can argue with this particular point. We now export roughly half of our production. As we plan for new production over the next couple of years, the need to open additional export markets becomes even more pressing. We need to build on the recent visits to Asia and the Middle East and ensure they yield trade agreements soon.

When considering trade, the earlier point about logistics is key. The focus for both policymakers and agribusinesses and organised agriculture should be on improving logistical efficiency. This entails investments in port and rail infrastructure, as well as in road improvements in farming towns.

In addition, South Africa must work diligently to maintain its existing markets in the EU, Africa, Asia, the Middle East and the Americas. The departments of Trade, Industry and Competition, International Relations and Cooperation, and Agriculture should lead the way in expanding exports to current markets and exploring new ones.

South Africa should expand market access to key BRICS countries, including China, India, Saudi Arabia and Egypt. There is also a need to increase focus on the broader Asia and Middle East regions to secure lower tariffs and the removal of phytosanitary barriers.

We are working to expand the sector and ensure we provide high-quality products to new markets. It remains key that the sector’s “knowledge infrastructure” is up to date and, importantly, that new-entrant farmers are supported. For this reason, we found the President’s call for more extension officers valuable.

The President stated: “We will deploy 10,000 new extension officers to support farmers and improve agricultural productivity. This will give rise to many opportunities for young people to be employed in the agricultural sector.”

The logistics, processes and timelines for this remain unclear and may take some time. Still, the point is valuable, and it remains for the Department of Agriculture to distil and offer more information and the plan ahead.

Foot-and-mouth disease

Indeed, no agricultural message today can be credible without acknowledging and outlining a clear plan to address the sector’s most pressing challenge: foot-and-mouth disease. On this, the President said: “While the rest of our agriculture sector is thriving, the cattle industry is today facing one of the worst outbreaks of foot-and-mouth disease our country has experienced. This disease is damaging our economy, resulting in export bans, trade restrictions and devastation of herds. We have decided to vaccinate the national herd of 14 million cattle. This requires 28 million doses of vaccine over the next 12 months. The state will facilitate the acquisition of the vaccines centrally to ensure that we get the right vaccine for the particular strain of the virus in South Africa.”

Ramaphosa added: “We will work closely with the private sector to enable an efficient roll-out, and most importantly, we will ensure that commercial, private and communal farmers have immediate access to vaccines... We have classified foot-and-mouth disease as a national disaster and will be mobilising all necessary capabilities within the state to deal with this crisis.”

This is the guidance many in the sector needed, and it was stated clearly that over the next couple of months we will start receiving significant volumes of vaccines. Foot-and-mouth disease will remain with us for some time, but the key is that there are emerging plans to ramp up domestic vaccine production and, most importantly, to secure imports for the near- and medium-term. The private sector will play a key role in the distribution.

The state will play a central role in import controls to ensure the country receives the appropriate vaccines and minimises the risk of introducing new strains. The key now is to secure large volumes of these vaccines soon, and the Department of Agriculture is making inroads; they should report to the nation in a month or two.

Admittedly, as these processes unfold, there are immense costs to the dairy and beef industries. Therefore, urgency in any work is key. Conversations with the financial industry about the sector’s risks and a collaborative approach are important.

Ultimately, the Sona touched on key aspects of the agricultural sector. Many other important issues were not directly addressed, including the state’s slow progress on land reform. But this doesn’t suggest that these are less important. The focus was just on the pressing issues of the day. Still, work to release government-owned land must begin, as it remains key to the sector’s inclusiveness agenda. DM

Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. He is also a senior research fellow in the Department of Agricultural Economics at Stellenbosch University.