While forecasts for 2022 points to another good year for agriculture in Mzansi, the chief economist at the Agricultural Business Chamber of South Africa, Wandile Sihlobo, says he is concerned over rising agricultural input costs.
In a podcast episode with Simon Brown, host of MoneywebNOW, Sihlobo said they are concerned that, even though the past season was great and prices were also good, input costs have been rising.
“For example, if you had to look at the fertiliser prices, they are plus 50% up on a year-on-year basis. The same is true for agrochemicals: plus 30% on a year-on-year basis. And it’s not just a South African story, but really globally. And we thought that was going to somewhat negatively affect the plantings for the next year,” Sihlobo told Brown.
However, crop estimate numbers indicate that farmers intend to plant 5% more than the areas which they planted last year. The expected area is around 4.3 million hectares of summer crops, which include maize and sunflower seeds, soybeans, peanuts, sorghum and dry beans.
“So it looks like the next season is coming up well. But, importantly, there’s also this La Niña that is still in the mix, which is going to give us above-normal rainfall. So it’s looking fairly [good],” Sihlobo said.
Wine industry recovery requires collaboration
The South African wine industry has called on government to join hands with role players in the sector to rebuild the industry towards a sustainable future.
What is needed, the industry reckons, is an enabling environment through sound policy decisions, infrastructure investment, stricter enforcement with regard to illicit trade, as well as financial support and relief.
According to Vinpro managing director Rico Basson, key to Mzansi and its wine emerging from the precarious position in which it finds itself, is sustainable growth.
“Now is the time for conducive policy decisions that will create an enabling environment to achieve this growth. This is what we hope to hear from finance minister Enoch Godongwana when he presents the Medium-Term Budget Policy Statement next week,” said Basson.
Despite performing relatively well over the past year, the wine industry is currently faced with its own unique obstacles due to an economic downturn and more notably the significant impact of alcohol restrictions since the start of the pandemic.
According to Basson the recovery process might take longer than five years and would require short, medium and longer term interventions.
“We continue our efforts to forge a strong partnership with government on initiatives such as the agricultural master plan and believe that a multilateral, rather than bilateral approach should be followed to create an enabling environment and stimulate the wine industry’s path to economic recovery.
“Meaningful engagement is crucial to ensure that all government resources are accessed,” Basson said.
Ports, illicit trade and clear policy framework
Vinpro furthermore said that the Cape Town port terminal is of strategic importance to the wine industry. South African wine exports represent almost half of its total production and therefore the organisation wants port efficiency and capacity increased.
Vinpro also called on government to create fair and open competition in the domestic market by enforcing the laws that already exist.
“We ask for a clear taxation methodology as agreed with Treasury for wine-related products. And an annual excise adjustment of below CPIX as the excise rate is already above the target incidence rate for wine and brandy,” said Basson
Basson argues that a clear policy framework with regard to beneficiation and inclusive growth in terms of access to existing and new water resources is also non-negotiable.
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