Government-industry partnerships have boosted agricultural exports and efficiency, writes Bhekani Zondo, economist at the National Agricultural Marketing Council (NAMC). Ongoing support is key to addressing biosecurity and infrastructure challenges for sustained growth.
South Africa’s agricultural sector is highly diversified and export-oriented, and the country has maintained its status as a net exporter of agricultural products over the years. In Africa, South Africa remains the largest food producer and exporter.
In addition to generating foreign earnings, the sector contributes significantly to the economy through gross domestic product (GDP) and job creation. The country’s agricultural sector performs well in international markets, largely due to the government’s role in opening new export markets and collaborating with industry to ensure export compliance and improve port operational efficiencies.
As of the second quarter of 2024, South Africa’s exports of agricultural products were valued at R63.8 billion, while imports were valued at R35.8 billion. Both exports and imports recorded quarterly growth rates of about 10% and 16%, respectively.
During this period, South Africa’s leading exported commodities included apples, maize, soft citrus, lemons, wine, and oranges, among others. In contrast, the main imported commodities were rice, wheat, palm oil, food preparations, and sugarcane.
Although the country is export-oriented, it still requires significant imports of certain commodities that are not suited to South Africa’s agroecological conditions, such as rice, wheat, and palm oil.
Agricultural growth and export markets:
The African continent remains South Africa’s major market for agricultural exports, accounting for 42% of export value, followed by the European Union (19%), Brics (9%), the United Kingdom (7%), and the Americas (6%).
Despite high levels of unemployment (currently at 32.9%), the agricultural sector employed about 920 000 people in 2023, of which 32% were women. Over the past five years since 2019, agricultural employment has increased by 6%.
In terms of GDP contribution, the agriculture and agro-processing sectors contribute approximately 6% to the country’s economy. Additionally, the agricultural Gross Production Value (GVP) has grown significantly from R362 million in 2021 to about R435.1 million in 2023.
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The sector still has substantial potential, with projections suggesting it could reach about R32 billion in GVP and create an additional 71 000 jobs by 2030. Achieving this will depend on the successful implementation of the Agriculture and Agro-Processing Master Plan (AAMP) and unlocking identified opportunities.
Furthermore, attaining these targets will require resolving current policy ambiguities, improving infrastructure, and addressing market and structural inefficiencies as outlined in the AAMP.
The AAMP, co-developed and adopted by the government, civil society, and industry, aims to address structural challenges inhibiting growth, transformation, and employment in the agriculture and agro-processing sectors.
Expanding market access and strengthening resilience
Since the implementation of the AAMP, the government has made significant strides in facilitating trade and negotiating market access for the country’s agricultural products.
Within the AAMP framework, several lucrative markets are envisaged for export growth, and through government negotiations, some have already been unlocked.
For example, the department of agriculture, in collaboration with relevant industries, has secured market access in Saudi Arabia for red meat exports.
Additionally, South Africa has regained market access for avocados in Japan after the two nations agreed on standards for the Hass avocado variety, which was previously banned from this market.
Moreover, South Africa has also gained market access for its oranges in Vietnam, an important development given the sanitary and phytosanitary (SPS) issues in the EU market, which accounts for most of South Africa’s citrus exports. Market expansion and diversification are crucial for the sector.
However, the resilience and performance of the sector continue to be challenged by disease outbreaks such as foot and mouth disease (FMD), which has led countries like China to ban the importation of beef and wool from South Africa in the past.
Nonetheless, domestic industries, in collaboration with the government, have worked tirelessly to contain these outbreaks through improved biosecurity measures, leading to the reopening of the Chinese market for South Africa’s exports.
Additionally, chronic port operational inefficiencies have also proved to be an Achilles’ heel for the sector.
Notably, interventions achieved through industry and government collaborations, such as the national logistics crisis committee and the implementation of Transnet’s recovery plan, offer hope for improving port operations and capacity, which are crucial for the sector’s export performance.
In conclusion, the resilience and performance of South Africa’s agricultural sector are heavily reliant on continued collaboration between the government and industry. This partnership has been instrumental in expanding market access, improving export compliance, and addressing challenges such as biosecurity threats and port inefficiencies.
As the sector navigates these complexities, ongoing cooperation will be crucial to unlocking further growth potential, driving economic contributions, and ensuring the sector’s sustainability and competitiveness in global markets.
- Bhekani Zondo is an agricultural economist at the National Agricultural Marketing Council (NAMC), specialising in trade research. He holds a BSc and MSc in agricultural economics from the University of KwaZulu-Natal and focuses on export market opportunities, trade trends, and policy advisories for South African agricultural products. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of Food For Mzansi.
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