The covid-19 pandemic has amplified the urgent need to address bottlenecks in the smallholder farming communities and cultivate the vast amounts of underutilised land across the country.
This warning by Maluta Netshaulu, senior manager: agriculture for Nedbank Business Banking, follows the release of the fourth Global Report on Food Crisis (GRFC 2020). While Netshaulu describes Mzansi as “an agriculturally endowed country”, he does believe that food security remains a major concern as businesses throughout the world struggle to get to grips with the covid-19 pandemic.
“The coronavirus lockdown has affected agriculture exports also,” he says, “but as the country eases lockdown regulations, the ability of South Africa and the continent to look after its people remains high on the agenda.”
According to GRFC 2020, Africa has the most acutely food-insecure people in need of assistance in countries badly affected by weather events, particularly in the Horn of Africa and Southern Africa, followed by Central America and Pakistan. Conflict, political instability, weather extremes, desert locusts, economic shocks and covid-19 are expected to be the key drivers of severe hunger.
Netshaulu points out, however, that agriculture is no stranger to adverse external factors presenting risk to the point of business continuity being threatened.
“The fears about the potential disruptions that the coronavirus could cause global supply chains have raised questions on whether South Africa could experience food shortages in the near-to-medium-term. From a national perspective, we doubt this would be the case, at least for most food products. South Africa is an agriculturally endowed country, generally a net exporter of agricultural and food products. What’s more, there are prospects for an abundant harvest of staple grains and fruit this year, which will increase the local supplies.”
Businesses that are exposed to global markets, and are dependent on income from exports, face a real challenge, though, that demand is severely contracted. This will ultimately affect cashflow ensuring that pressure will originate as a result of a mismatch in meeting forward exchange cover.
‘Two distinct levels of food security’
Netshaulu’s warning echoes that of prof. Ferdi Meyer, managing director of the Bureau for Food and Agricultural Policy (BFAP), and Agbiz CEO Dr John Purchase in a recent webinar hosted by Nedbank Business Banking.
“What the pandemic has made very clear is that there are two distinct levels of food security – at a national level, which is secure, and at a household level, which is very precarious,” says Meyer.
Purchase agrees, adding that the situation was fragile even before covid-19. “We must acknowledge that the Zuma administration was disastrous for South Africans: per capita GDP was cut from USD 8 000 to USD 5 200, which means that South Africans are now roughly 25% poorer in US dollar terms than before the Zuma years.”
Then came covid-19 and the lockdown which Purchase says “cut off the legs” of the informal food supply network. “Informal trade was ceased, which was a remarkably efficient mechanism, so physical and financial access became problematic and this has created a humanitarian crisis on the same scale of the pandemic,” he says.
Purchase says a number of initiatives are in place to support this sector, particularly to weather the storm created by the pandemic. The department of agriculture, land reform and rural development has ring-fenced R1.2 billion to support around 15 000 small-scale farmers, and Agbiz is working with the Gauteng government through the Public-Private Growth Initiative to develop food supply chain security in the informal market.