Mosia was one of the panellists deliberating South Africa’s agricultural economic outlook at the fourth Annual AFASA Young Farmers Summit earlier today. He was joined by two fellow economists, Dr. Ndumiso Mazibuko from the National Agricultural Marketing Council (NAMC) and Ikageng Maluleke from Grain SA.
Despite seeing agriculture as a gateway for Mzansi’s youth, Mosia states that there are economic headwinds and political uncertainty which makes it difficult to plan ahead for a sector which requires long-term investments for sustained growth.
Maluleke agrees, however, that agricultural production and marketing takes place under a number of risks. These risks, she says, “arise mostly from external forces and if not identified and managed may negatively affect an agribusiness”.
The dynamic Maluleke says young farmers need to understand the nature of anticipated economic and political risks. This will help to implement mitigation strategies to cushion farmers against external uncertainties. “Young farmers need to ensure that internal farm efforts are put in place to withstand risks arising from an ever-changing economic and political environment.”
Advice to young farmers
Her practical advice to young Mzansi farmers are to maintain liquidity and credit reserves, to spread annual out sales, enterprise diversification, market diversification, constant communications with government, industry associations and/or private support organisation and to consider other off-farm sources of income.
South African farmers operate under uncertain environments and over recent years they’ve undergone a recession, drought, a drop in market prices and changing government policies. Maluleke, however, assures young farmers that with good long-term planning and support they can operate successfully.
Meanwhile Mosia believes young people need to start challenging themselves to think beyond traditional agricultural practices and recognise the inherent opportunity in the provision of services which support agricultural production.
“Input supply services (such as seeds, fertilisers and chemicals), market agents, packaging, logistical support and on-farm services are all crucial productive components of the value chain which are not particularly contingent on whether land will be expropriated or not,” he adds.
Maluleke also highlighted a number of economic indicators specifically young farmers need to look out for. “Farmers need to look at interest rates; monitoring the value of the rand; looking at the gross domestic product and the rand exchange value.”
Mosia furthermore emphasised that Mzansi’s young farmers are rightfully concerned about the political and economic landscape of the country, but for a segment of the population which is so well endowed with a sense of urgency, vigour and saviness, this worry should translate into interesting business propositions which can leverage their entrepreneurial nature.
Mazibuko is positive about transformation in the agricultural sector, but as a country we need to be decisive especially when you consider investing into a specific enterprise. He adds that his seen certain industries responding to transformation initiatives that work well but it will take a long time before we are where we need to be.