23 July 2021
Agbiz participates in various initiatives to restore order and ensure that supply chains operate optimally
The events of extreme looting, vandalism, intimidation and in general plain anarchy over large parts of KwaZulu/Natal (KZN), and parts of Gauteng, last week have shocked many South Africans to the core. For some time a number of factors had been building up to this situation and it just needed a spark and some orchestration to provide the tipping point for these events to unfold. There were clear failures by government, as acknowledged by President Ramaphosa, in especially the security cluster to prevent this mayhem and an independent and in-depth investigation and enquiry is needed to get to the root causes thereof. Confidence, and especially business confidence, will only be restored once the plotters, instigators and perpetrators are brought to justice, and justice is seen to be done expeditiously. Justice delayed is justice denied. For too long the principle of accountability in a constitutional democracy, in which the rule of law should reign supreme, has been severely compromised in South Africa. It will require a special collaborative effort by all in government, business, labour and community to move South Africa into a far better space and socio-economic environment, as envisioned by former President Mandela and the writers of our constitution. This past week, Agbiz has participated extensively in various meetings and initiatives in restoring order and ensuring that supply chains in especially the agro-food system operate optimally again. Please click here to read the full statement by Agbiz CEO Dr John Purchase with more information on the initiatives Agbiz participates in.
Unrest has demolished economy in 55% of KZN rural towns
Recent unrest, violence and looting have led to economic activities being completely demolished in more than 55% of rural towns in KwaZulu-Natal, according to a survey among members of the KZN Agricultural Union (Kwanalu). The unrest impacting South Africa’s main economic arteries was sparked following former president Jacob Zuma’s incarceration on 7 July. The closure of the N3, as the primary gateway for the movement of produce and products into and out of the province, has had “catastrophic consequences for farmers, agri-businesses, retail stores and the entire agricultural value chain, according to the union. The survey also indicates that early results show that more than 15% of towns experienced a severe degree of damage – between 40% and 80% – to businesses and trade. A further 15% of towns experienced limited looting with their business centres “partially intact” and a negative impact of between 11% and 40%. The survey reveals that 64% of rural towns are already experiencing severe food shortages; 32% moderate food shortages; and only 4% report a relatively secure source of food supply. Read more in the linked article, first published on Politicsweb. We call on our members and other industry role players to assist in this time of extreme hardship to help stabilise the rural communities and alleviate hunger amongst the most vulnerable in these areas. If you are able to make a contribution, kindly liaise with Karen Grobler at karen@agbiz.co.za.
Keeping interest rates unchanged was in line with market expectations
In a media statement, Prof Raymond Parsons of the North-West University Business School says the MPC decision to keep interest rates unchanged again was in line with market expectations and similar to its approach at its previous May 2021 meeting. "Given the additional uncertainties recently injected into the economy by civil unrest, the level 4 lockdown and the current trajectory of the pandemic, the need to now keep borrowing costs low and stable is reinforced. This remains important for business and consumer confidence at this point in South Africa’s business cycle. The downside risks to growth listed by the MPC have now become paramount in light of current developments. With core inflation contained for now the priority, therefore, is for monetary policy to remain supportive while South Africa seeks to absorb - and adjust to - the significant economic costs of the latest ‘shocks’ to the economy. Hence it is desirable that interest rate policy stays responsive to an unusual set of circumstances." Please click here for the full media statement.
Citrus industry rolling out a recovery plan to continue exports
The Citrus Growers' Association of Southern Africa (CGA) strongly condemns the wave of looting and arson that swept across KwaZulu-Natal and Gauteng. While the citrus value chain has been impacted, most critically by the closure of the Durban Port, the industry has and will continue to ensure that citrus is exported to key markets.
In this regard, growers in the northern provinces of Limpopo and Mpumalanga have been diverting their fruit to other ports across the country, with citrus from other regions continuing to be exported from Cape Town and Coega ports. Last week saw little impact on volumes of citrus being exported to markets including the European Union, Middle East, China and the United States. In order to ensure the full recovery of the entire value chain in KwaZulu-Natal , the CGA has been engaging with stakeholders in the public and private sector on a daily basis to get an update on the situational analysis on the ground and to identify any risks that are hampering the full recovery of the supply chain. Through its membership in Agbiz, this information is then being provided to government on a continuous basis. Please click here for the full CGA media statement.
Cape High Court reserves judgment on Vinpro interdict application
After having been argued for a full day, the Western Cape High Court reserved judgment on Vinpro’s urgent interim interdict application that would afford the Premier of the Western Cape the power to adopt deviations to the national ban to enable off- and on-consumption sale of liquor in the province. The legal teams acting on behalf of Vinpro and the government have stated their arguments to the presiding judge, acting judge Noluthando Nziweni, in the Western Cape High Court earlier this week, after which she reserved judgment on the matter. “We are hopeful for a positive outcome and eagerly await feedback on this important principle that would govern decision-making regarding future wine sales bans,” says Vinpro MD Rico Basson. Read more in the linked Vinpro statement.
SCA decision bodes well for future engagement with assignees
The Agricultural Product Standards Act allows the executive officer of product standards to appoint a private entity as ‘assignee’ to perform critical inspection functions on behalf of the department. The Act also permits the assignee to set and levy fees whenever these inspection services take place. Some time ago a group of agribusinesses in the vegetable value chain took the assignee and the department to court over the fees levied for inspections by the assignee. After an initial setback in the High Court, the Supreme Court of Appeal upheld the appeal yet both parties claimed a degree of success. In the linked article, Agbiz head of Legal Intelligence Theo Boshoff delves into the matter to provide some clarity.
A good season for South Africa's winter crops
Wandile Sihlobo's recent analysis of South Africa's agricultural production for the 2019/20 and 2020/21 production seasons has largely carried a positive tone. "Over the past month, my focus has been on summer crops and horticulture, where record yields have been a dominant feature in the discussion. For summer crops, I maintain an upbeat view that the 2020/21 season will show further improvement in output compared with the 2019/20 season. Encouragingly, this optimistic production outlook extends into winter crops, i.e., wheat, canola, oats and barley, which I have not discussed much recently. The Western Cape, where more than two-thirds of the winter crops are planted, has received favourable rains since the start of May. Moreover, the cold weather in recent weeks has also provided conducive conditions for the crops." Wandile Sihlobo explores this subject in the linked article, written for and first published on News24.
No shortage of food in SA but distribution still faces headwinds
Since the start of the unrest in KwaZulu-Natal and parts of Gauteng, there has been rising concern about food availability. This is understandable as the public fear that the looting and vandalism have destroyed some food distribution centres, retailers and caused blockages in key logistics corridors. This is the reality for KwaZulu-Natal, and to a lesser extent parts of Gauteng where incidents of unrest were concentrated in certain areas such as Soweto, Mamelodi and Vosloorus, rather than the entire province. For specific areas in KwaZulu-Natal, the main concern was not necessarily the availability of food but access to food due to disruptions in distribution centers and road networks. Wandile Sihlobo explores this subject in the linked article, written for and first published in Business Day. You can also listen to a Pretoria FM interview with Agbiz CEO Dr John Purchase on this subject.
Seizing the opportunity for a pro-growth, post-pandemic world
Since March 2020, governments have spent $16 trillion providing fiscal support amid the pandemic, and global central banks have increased their balance sheets by a combined $7.5 trillion. Deficits are the highest they have been since World War II and central banks have provided more liquidity in the past year than in the past 10 years combined. This was absolutely necessary — IMF research indicates that if policymakers had not acted, last year’s recession, which was the worst peacetime recession since the Great Depression, would have been three times worse. That’s where we’ve come from, but where are we headed? Geoffrey Okamoto, first deputy managing director of the IMF, discusses this subject in the linked IMF blogpost.
The vulnerable points in South Africa’s fuel supply chain
The civil unrest besetting South Africa raises questions about the security of fuel supplies. What are the risks down the value chain – from supply to consumption? Without fuel to farm with or to bring food from the farms to the cities, hunger follows. Oil companies and governments are usually awake to the strategic role played by liquid fuels and have special measures to protect supply and logistics. Much of South Africa’s measures are apartheid-era hangovers that have eroded with time. Periodic risk assessments have been done, but many assumed a calm society. It seems there was inadequate attention given to the risks imposed by a broken social compact. So where do the biggest risks lie? Read more in the linked article, first published on The Conversation.
Small-scale farmers battle for survival in drought-crippled rural Eastern Cape
As dams run dry in Amathole District Municipality, farmers are in a desperate struggle to keep their livestock alive, while also facing stock theft and high feed costs. Xolisa Bomela is a small-scale sheep farmer in the deep rural Nteshe village of Nqamakhwe in Mnquma municipality in the Eastern Cape. He wakes up early every day to feed his livestock before releasing the animals on to the overgrazed land in his village. Ten years of drought in parts of Amathole District Municipality (ADM) have cost Bomela R785 000. From 2010 until today, Bomela has lost R270 000 through the deaths of his cattle, sheep and goats, including calves, lambs and kids. He has spent R440 000 on feed and has lost R75 000 through theft of his cattle, sheep and wool. Please click here to read the full article, first published on Daily Maverick.
Minister Didiza’s budget vote speech centered on the themes of private-public-partnership approaches
On 13 May, the Minister of Agriculture, Land Reform and Rural Development Thoko Didiza presented the budget vote speech to Parliament. The budget for the department amounted to R16,9 billion which is just a slight increase from the previous year’s budget of R16.8 billion. The R16,9 billion budget will be shared with provincial departments of agriculture and other government entities as part of a division of revenue. Minister Didiza mentioned that over 50% of the budget goes to land reform, food security and restitution as these are pressing matters in South Africa. Thapelo Machaba public policy/advocacy intern at Agbiz, dicusses the highlights of the budget vote speech in the linked article.
Fruit industry partnering with Department of Health to offer Covid vaccinations 
According to Agri Western Cape chief executive, Jannie Strydom, the collaboration between public health and the private sector to provide vaccination sites is seen as a confirmation of the willingness of the agricultural sector to assist in the prevention and containment of the spread of the Covid virus. “We can only hope that this continuous gesture will influence decision-makers to prioritise the sector for the vaccination roll-out,” Strydom said. But, for one of Grabouw’s largest employers, apple and pear packers and processors, Two-a-Day, educating people about the benefits of the vaccination is paramount. According to Dimitri Jacobs, director: human resources and also a Company Director of South Africa’s largest exporter of apples and pears, Tru-Cape Fruit Marketing, Two-a-Day is seeing success with their campaign to communicate the positive benefits of being vaccinated. “We are providing registered nurses to administer the vaccination and also having Dr Anthony Hess on standby in the event of any side effects,” Jacobs says. Read more in the linked article.
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