In a recent turn of events, farmers in the European Union (EU) have taken to the streets, raising concerns and sending shockwaves through the global agricultural community.
Thabile Nkunjana, the National Agricultural Marketing Council’s (NAMC) senior economist, sheds light on the potential repercussions for South Africa’s burgeoning agriculture industry.
‘We need to keep an eye on it’
Nkunjana explained that the European Union’s (EU) recent developments with farmers going on regional strikes are alarming, and the South African agriculture sector must keep a close eye on them.
“Three key causes behind the EU farmers’ walkout include protection against imports, declining agricultural subsidies, and the reduction of chemicals and fertiliser use.
“For the straightforward reason that the EU is one of the major markets for South African agricultural products – mostly fruit, wines, and some nuts, to mention a few – protection against imports poses a direct threat to the country’s agricultural sector,” he said.
Nkunjana said thousands of livelihoods in South Africa are now supported by the agricultural industry, which has grown significantly in both production and exports thanks in large part to the EU, so any disturbance in the major market poses a threat.
He added that after Africa and a combination of Asia and the Middle East, the EU is currently the third-largest market for South African agricultural exports. The region accounted for 19% of South Africa’s total agricultural exports in the third quarter of 2023.
Import and export relations
“In the event that the country loses it, it will be necessary to find new markets, which is difficult because it takes time to establish stable export markets. Furthermore, it would require some time for consumers in other regions or countries to develop a taste for some South African products that are currently exported in significant amounts to the European Union.
“Reduced subsidies and fertiliser application may have a direct impact on the EU’s farmers’ competitive edge in production and negatively affect their profits hence making it challenging for many farmers to continue farming,” he said.
Regarding subsidies and fertiliser use, Nkunjana said the primary objective of the European Union is to tackle climate-related issues that are adversely affecting specific regions of Europe, as well as the rest of the world.
This means it will be crucial for South Africa to keep up with these advancements in the EU since production methods included in these climate-related legislation may have an impact on how food is produced in South Africa before being shipped to the EU.
“Since the situation is still unfolding, South Africa’s total agricultural exports to the EU will not be immediately impacted by the demonstrations.
“As of right now, South Africa is still exporting its agricultural products to the EU, but there are still some unanswered questions regarding the standards for the citrus sector, which is expected to enter the market in the next few weeks,” explained Nkunjana.
‘EU protests do impact us’
Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa (Agbiz), explained that these events are far from South Africa but it has relevance.
He added that the big win for farmers in the EU so far was the agreement by lawmakers to review the environmental policy, with the “Farm to Fork Strategy”, aimed at reducing the use of chemicals and fertilisers, which threaten farmers’ productivity.
“These production changes applied not only to EU farmers but also to trading partners such as South Africa.
“The EU is the second most important market for South Africa’s agricultural products, accounting for 27% of the country’s total agricultural exports. So we welcome the news of a review of the environmental laws.
“Still, the rising talk about a need for protectionism in crucial agricultural export markets for South Africa is worrying. We see this reality in the EU,” he said.
Government’s response
Meanwhile, agriculture, land reform and rural development media liaison officer Reggie Ngcobo believes the protests are an opportunity for South Africa to send more goods if their strike affects their productivity.
“The strikes does not affect exports rather imports from those who import from EU. But on the other side, there are other markets besides EU that those who import can go to,” he said.
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