The 2021 edition of the BFAP Baseline presents an outlook of agricultural production, consumption, prices and trade in South Africa for the period 2021 to 2030. The outlook is generated by the BFAP system of models and considers the performance of South African agriculture and its contribution to inclusive growth and economic prosperity as we enter the post-Covid era. The information presented is based on assumptions about a range of economic, technological, environmental, political, institutional, social and international market factors. You can read the full BFAP Baseline here.

A decade has passed since the National Development Plan (NDP) was published. It identified agriculture as the main sector to drive development opportunities in South Africa’s rural areas. Agriculture has strong linkages to upstream and downstream industries and thus expansion at the primary level will spill over into the wider development of rural economies. Besides the opportunities for inclusive expansion in farming in areas that are currently underutilised, agriculture is typically the biggest employer of labour in rural areas, and capital invested on farms is often a precursor of further investment in newly developed industries that follow such development. Dr Tracy Davids, a director at the Bureau for Food and Agricultural Policy (BFAP) and Prof. Ferdi Meyer, managing director of BFAP, discuss this subject in the linked article, first published on Daily Maverick.

Following a surge to an all-time high of 75 in the second quarter of this year, the Agbiz/IDC Agribusiness Confidence Index (ACI) retracted back to 67 points in the third quarter. Still, this current level reflects favourable conditions in South Africa's agriculture sector and for agribusiness. A level above the neutral 50-point mark implies that agribusinesses are optimistic about operating conditions in the country. The optimism reflects both the large output and higher commodity prices that have benefited farming businesses in the 2020/21 agricultural production season and the favourable outlook about the upcoming 2021/22 season. The higher commodity prices and the positive weather outlook, which shows prospects of above-normal rain across most regions of South Africa, are supportive factors for agribusinesses. This third-quarter survey was conducted between the last week of August and first week of September and covered agribusinesses operating in all agricultural subsectors across South Africa. In the linked article by Wandile Sihlobo discusses the latest data.

Following deliberations by the Cabinet Committee on the Economic Sector, Investment, Employment and Infrastructure, a revised version of the Climate Change Bill has been approved by Cabinet for introduction to Parliament. The Climate Change Bill is envisioned to be a specific environmental management act falling under the broad principles of the National Environmental Management Act, but with a dedicated focus on climate change. It will be the primary legislation that domesticates South Africa’s international commitments under the United Nations Framework Convention on Climate Change (UNFCCC). The Bill makes provision for the establishment of a multi-stakeholder Climate Change Committee and introduces multiple mechanisms to enable South Africa to reach its climate change ambitions, including:

The Bill was the subject of intense deliberations at Nedlac over the course of the past three years and Agbiz played a critical role in the task team. It is our belief that the Nedlac process changed the Bill for the better. All eyes now look to Parliament and the opportunities that may be presented for public participation.

Following the debate on expropriation without compensation has shown a stark divergence in how people view the Constitution. The views seem to very from one extreme to the next with some believing the Constitution to be sacrosanct and others going so far as billing it a “sell-out”. I wonder how many people know that the Constitution has already been amended 17 times in our short democratic history? Ok, I must qualify it slightly: our Bill of Rights (section 9 to 39 of the Constitution) has never been amended and I am yet to hear a compelling argument rooted in facts and logic as to why section 25 needs to be amended. However, there are other sections which have, almost miraculously, escaped critique. Please click here to read the full article, by Agbiz head of Legal Intelligence, first published in Farmer's Weekly.

Unlike several other African countries, South Africa has not faced a food shortage in the recent past. Food production has increased over the years and SA has remained a net exporter. Over the past two decades the country’s agricultural and food trade surplus has averaged $2bn, according to Trade Map data. These gains were supported by an expanded area under production, primarily fruits and soybeans, and improved productivity across all commodities. The productivity gains were boosted by adopting new farming technologies — mechanical and biological — and better farming techniques. This trend also resulted in the consolidation of farming units over the years, especially since the 1997/1998 deregulation of agricultural products markets. The consolidation has allowed farmers to take advantage of economies of scale as they compete with global players in the agricultural and food markets. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Business Day.

We continue to observe optimism in South Africa’s tractor sales as the 2021/22 summer crop production season approaches. The recent data from the South African Agricultural Machinery Association show that tractor sales were up by 56% y/y in August 2021, with 724 units sold. If we consider the total tractor sales for the first eight months of this year, we are already 30% ahead of the corresponding period in 2020, with 4 658 units. Importantly, 2020 was also a good year in South Africa's tractor sales, so surpassing it means that we are witnessing some good momentum this year. In 2020, the tractor sales amounted to 5 738 units, up by 9% from 2019, supported by the large summer grains and oilseeds harvest in 2019/20. Yet, 2020/21 was another excellent agricultural season and coincided with higher commodities prices boosting farmers' finances and, subsequently, the tractor sales. In the linked article, Wandile Sihlobo shares his insights on the latest data.

 Agbiz chief economist Wandile Sihlobo has been appointed a senior lecturer extraordinary of agricultural economics at Stellenbosch University for a period of three years. The university said it created this category of appointment to recognise individuals for their expertise and/or their eminence in their profession.Wandile, who is a Business Day columnist and author of Finding Common Ground: Land, Equity and Ariculture, said his primary work will continue to be as chief economist for the Agircultural Business Chamber (Agbiz). Following his appointment, Wandile said "the appointment is an honorary post with slim responsibility of occasional lectures on agricultural policy and institutional economics. It also means that one will publish a bit of academic research under the department, and of course Agbiz, to help contribute to its body of knowledge and public stature". 

There is little doubt that 2021 will be remembered as a watershed year for South Africa. Our economic recovery depends on the difference we make in the lives of others through our decision-making, the optimal management of socio-political challenges in the macro-environment, the curbing of unnecessary costs, by embracing new technological advancements and by gaining a clear understanding of the fundamental factors that will determine commodity prices in 2022. Leading our country and sector forward into a promising,

joyful future we need to make a difference in the lives of

others through our decision-making. Key speakers include Prof Johann Kirsten, Dr John Purchase, Prof. Ferdi Meyer, and Arlan Suderman. Join us from 20 to 23 September for our VIRTUAL Symposium. In the linked video, Agbiz Grain general manager Wessel Lemmer elaborates on the topics that will be discussed. Please click here for more information on the programme and to register.

When comparing currencies, one should not only look at the exchange rate, but more specifically to what you can buy with the money. In terms of purchasing power parity, the

rand is one of the most undervalued currencies in the world. Agbiz Grain general manager Wessel Lemmer explores this subject in the linked article, first published in Landbouweekblad.

The USDA forecasts South Africa’s chicken meat production will increase by five percent in 2022 on industry investment and lowered input costs. Chicken meat consumption is forecast to strengthen by three percent due to economic recovery and rising costs of substitute proteins. Imports will decrease by three percent due largely to increased tariffs, yet this impact will be dampened by recovering supply chains and strengthening demand that cannot be met through domestic production. Post forecasts that South Africa’s chicken meat exports for 2022 will increase by six percent as exports recover from a downturn in 2021. Please click here to peruse.

Southern and Eastern Africa face the twin challenges of growing agricultural production to meet food demand while adapting to extreme weather. And climate change makes addressing these challenges extremely urgent. Southern Africa is a climate change hotspot. Eastern Africa is projected to still have good average rainfall, although temperatures will increase and floodings become more frequent. There is huge potential for meeting these twin challenges across Eastern and Southern Africa, where there are in fact good soils and water availability in many countries. However, markets are not working well, especially for small and medium-scale farmers and agri-businesses which are at the heart of inclusive food value chains. Read more in the linked article, first published on The Conversation.

The Zimborders Consortium has announced that the first phase of the Beitbridge upgrade is underway with a new Southbound access lane opened on the 16th of September. This will be followed by 3 new terminal buildings being built and the ultimate aim is to implement an automated flow control system, although the timelines for completion are less certain. Beitbridge is a critical linkage from South Africa to SADC and can hence be of relevance to agribusinesses doing trade with the rest of the region. Included is a communication from Zimborders as well as a flyer aimed at truck drivers. 

The government is launching a registration portal today for the registration of businesses that were affected by the unrest which took place during 9-19 July 2021 in KwaZulu-Natal, Gauteng and other affected areas in the country. As part of the relief package announced by President Cyril Ramaphosa on 25 July 2021, a range of measures are being implemented by national and provincial governments to help small and medium businesses which suffered damage or losses to rebuild. The registration portal will collect data from affected businesses to better coordinate these relief measures as well as to inform future interventions. It will provide a single governmental entry point for businesses to indicate the extent of losses they have suffered, and to access available facilities. Please click here to peruse.

As part of the South African government’s Economic Reconstruction and Development Plan, Nedlac partners have agreed to work collectively to reduce the country’s non-oil import bill by 20% over the next five years (the “Localisation Initiative”)1. On 4 August 2021, the EU Chamber of Commerce, and Industry in Southern Africa (EU Chamber) and Business Unity South Africa (BUSA) co-hosted an online business seminar on localisation policy. The seminar brought together recent research on the impact of localisation and import substitution policies from South Africa and internationally.Please click here for a summary report of a webinar on localisation co-hosted by BUSA and the EU Chamber of Commerce and Industry in Southern Africa on 4 August 2021. 

The newly formed World Macadamia Organisation (WMO) has officially launched and incorporated in Singapore, with a mandate to drive demand by creating a greater understanding and appreciation of this understated wholefood. Industry data and global supply forecasts show the supply of macadamia nut-in-shell will double by 2025, and possibly triple by 2030, to over 600,000mt. To ensure that demand meets supply, whilst still retaining the macadamia’s premium positioning, the WMO has been charged with stimulating growth, and helping to solidify the long-term foundations for a strong, sustainable market. The founding CEO of the WMO, Jillian Laing, has an extensive background in global food marketing working across consumer, snack foods and dairy, ingredients and foodservice. Jillian is currently based in Auckland, New Zealand. Read more in the linked WMO media statement. 

South Africa finds itself at an inflection point, with the domestic consumer under massive financial pressure and the market demanding affordable and sustainable products. Yet, at the same time we are seeing growth in export demand for agricultural products. Taking advantage of these opportunities will require a dual approach – namely ensuring efficiency and reliability while also driving the sustainability which consumers are demanding, both locally and globally. End-to-end value chain visibility remains the key enabler. Reducing food losses and waste is a critical part of making food systems more sustainable and resultantly more resilient, which will help promote a more affordable and healthier food offering for consumers, in line with the European Union’s Farm to Fork strategy. Value Chain Solutions is uniquely positioned within this space, offering unique skillsets and solutions. In its latest insights piece on reducing food waste and losses, Value Chain Solutions unpacks the overarching problem and challenge and provide a potential solution to drive affordability, food waste reduction and improved traceability.

The Milk Producers’ Organisation of South Africa (MPO) is looking for a new chief executive officer. The MPO Board and Signium Africa are inviting interesting parties to participate. Please click here for more information.

Justin Chadwick, CEO of the Citrus Growers' Association of Southern African, shares the latest news in the citrus industry in his weekly update - From the desk of the CEO. Please click here to peruse.

Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation's (SAPPO) newsletter, SAPPO Weekly Update.