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During the lockdown the Agbiz office will be closed,  but all staff members are operating remotely and will be conducting their roles as normal from home offices.
e-Newsletter
28/2020
24 July 2020
DALRRD adjusted Budget Vote Speech 2020
 
This week, Minister of Agriculture, Land Reform and Rural Development Thoko Didiza tabled an adjusted budget of the department. The financial difficulties posed by the Covid-19 pandemic into an economy that was already underperforming resulted in roughly R2.4 billion cut in the department's budget for 2020/21.  "Under these circumstances of low economic growth, growing government debt, the Covid-19 pandemic and the need to increase health spending, we think the budget allocation for the Department of Agriculture, Land Reform and Rural Development looks fair. What will be important, however, is for the department to prioritise core activities that enable the sector to remain competitive and well functioning. These include, but not are limited to, the funding and functioning of the office of the Registrar (Act 36 of 1947), allocations for biosecurity and other activities that enable continuous exports," says Agbiz CEO Dr John Purchase. "Admittedly, the budget reduction will impact on service delivery to the agricultural industry, but it also creates the opportunity to relook the priorities and core functions that the department needs to deliver on to ensure that the industry remains competitive and contributes significantly to inclusive growth, and national and household food security," added Dr Purchase. The full speech of the Minister is available here. 
Further cut in interest rate is positive, says Prof. Raymond Parsons
 
Interest_rates
The Monetary Policy Committee (MPC) decision to cut interest rates by another 25 basis points is broadly in line with market expectations and comes as no surprise, says North-West University economist Prof. Raymond Parsons. "This is a welcome continuation of rate reductions since the beginning of the year and brings the repo rate to the lowest point since it was introduced in 1998." The South African Reserve Bank has also cut its 2020 GDP growth forecasts from - 7.0% to - 7.3%, which confirms the dire economic circumstances in which South Africa now finds itself. Also confirming these negative growth and employment trends from the MPC was a recent Nedbank investment survey, which forecasts that gross capital formation would decline by -27% in 2020, by -4% in 2021 and recover modestly in 2022. Read more in the linked media statement.
SAGIS releases annual report at its AGM

The South African Grain Information Service (SAGIS) held its annual general meeting (AGM) this past week. After adoption, SAGIS also released its annual report for the 2019/2020 financial year. SAGIS is a world-class South African grain and oilseeds industry institution, functioning under statutory measures, and provides essential market information services to all role players in the respective grain and oilseed industries. This ensures a transparent and credible basis for decision-making in the industry. Agbiz CEO Dr John Purchase was re-elected as chairman of the board, while Mariana Purnell and Dr Erhard Briedenhann were elected as deputy chairpersons. Please click on SAGIS Annual Report to peruse.
Functioning in the age of Covid-19 - resources for business

Covid-19 will be a reality for our foreseeable future. To successfully operate under these new conditions, we need to innovate, rapidly adjust and adopt new ways of working, interacting and taking care of each other. On Tuesday, Business for South Africa hosted a webinar on "Functioning in the age of Covid-19", with Anglo American and the Return2Work initiative. 
During the webcast, Nolitha Fakude, chairperson of Anglo American's management board in South Africa, Dr Charles Mbekeni, lead for health for Anglo American in South Africa, and Tanya Cohen on behalf of Return2Work and Citizens in Solidarity shared leadership lessons and practical tips on how business can adapt and respond to support the lives and livelihoods of employees and communities. The panelists also shared information about resources and tools that can be used by businesses of all sizes. Please click here for links to the recording of the webinar, as well as other resources mentioned during the webinar.
AGRIBUSINESS RESEARCH
Grain prices are starting to soften

The global grains environment has changed somewhat from the optimistic picture of a few weeks ago. The increased dryness in parts of Europe and the US is weighing on global crop production, specifically maize and wheat, and this has raised the prospects for downward revision of yields estimates. The United States Department of Agriculture (USDA) was the first of major institutions at the start of this month to lower its estimates for US maize and wheat production. This was followed by the EU's production estimates, primarily on the back of concerns about yield prospects. In the linked Fin 24 article, Agbiz chief economist Wandile Sihlobo explains why the global grains outlook is no longer as rosy as a few weeks ago and how wheat-importing countries such as South Africa stand to benefit from large global supplies.
This is how rural areas can be developed through agriculture

The rural economy should not be forgotten in South Africa's post-Covid-19 recovery plans. This is still an important segment of society and the economy, though 68% of the population now lives in urban areas. Apart from its reliance on remittances and social transfer payments, the one outstanding characteristic of the rural economy is its dependence on a few key industries, all of which are typically resource-based, such as agriculture, mining, fishing, tourism and forestry. In the linked article, written for and first published in Business Day, Wandile Sihlobo and Prof. Johann Kirsten, professor of agricultural economics at Stellenbosch University and director of the Bureau of Economic Research, write that "we need to confront infrastructure and governance constraints that have hindered the growth of agriculture over the past two decades".
Sentiment around wheat does a u-turn after favourable rains

As South Africa's summer crop - which includes maize - is set to be one of the best on record, focus now shifts to the outlook for winter crops, specifically wheat. Alas, for wheat farmers the 2020/2021 season had a bad start because of dry weather conditions, and production forecasts looked bleak.
The Western Cape, which typically accounts for two-thirds of South Africa's winter wheat plantings, experienced a delay of about three weeks in plantings. Ahead of the start of the season, the crop estimates committee projected that plantings could fall by 2% year on year in the province. And after accounting for unfavourable weather conditions in other provinces, the committee estimated an overall 8% year-on-year decline in national winter wheat plantings for the 2020/2021 season. But that dim view is quickly changing after early rains enabled farmers to accelerate plantings in the Western Cape and other provinces. Wandile Sihlobo reports that the prospects in the Western Cape are looking good should there be follow-up rains in the coming month. Read more in the linked article, written for and first published in Business Day.
OTHER NEWS
The looming Brexit cliff - what it means for South Africa and for SACU 

On 30 June 2020, the United Kingdom (UK) and the European Union (EU) passed a final threshold. Although the UK formally left the EU on 31 January in terms of the Withdrawal Agreement between the EU and UK, that agreement provided for a transition phase until 31 December this year which could be extended for a further period if both parties agreed to an extension by 30 June. After this Withdrawal Agreement, the British parliament passed its own Withdrawal Act which made it illegal to extend the transition period but that is of no relevance in any event as the 30 June deadline, which was the date for agreeing a further extension, has now passed. O ne of the objectives of the transition phase was to allow the parties time to conclude a free trade agreement. Although there have been a series of scheduled talks, not much progress has been made in getting to an agreement. The linked article by Tralac (Trade Law Centre), discusses the various difficult issues that remain unresolved.
South Africans should accept that the IMF is neither their worst enemy, nor their saviour
 
The South African government has asked the International Monetary Fund (IMF) for $4.2 billion. The money would come from a facility that provides financing to countries  facing an urgent balance of payments need, without the need to have a full-fledged programme in place.  According to the IMF managing director this means that the recipient can spend the money freely but should keep the receipts. Nevertheless, reports that South Africa has been negotiating a letter of intent with the IMF suggest that at least part of the financing will be linked to tougher IMF conditionalities.  The letter of intent is a letter from the government to the IMF in which it sets out the policies that it intends to implement to correct the macro-economic problems that caused it to seek IMF support. The IMF board decides to provide a country with financing on the basis of this letter. Its contents are the core of the conditionalities attached to IMF financing.  South Africans will learn the actual terms of the IMF financing at the end of July when its board of directors considers the country's request for financial assistance. Read more in the linked article, first published on The Conversation.
Soybean farming in Russia's not-so-frozen north
 
Just below the Arctic tundra, in the vast plains that blanket much of northern Russia, a once-unthinkable business is taking hold: soybean farming.  It's the result of years of rising global temperatures, which are thawing the permafrost and turning the land into fertile soil, and now, agronomist Gennady Bochkovsky is helping take the crop to the next frontier, testing whether the beans can handle the upper areas of the Moscow region. So far, he says, the results are promising. The linked article, first published on Business Day, explores how global warming has led to the thawing permafrost becoming fertile soil, with formerly unthinkable crops growing increasingly further north
 Weekly newsletter from CGA

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.
The latest news from the pork industry

 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.
Get the latest news from the FPEF

Keeping it Fresh , the newsletter of the Fresh Produce Exporters' Forum, contains all the recent relevant news and developments. Please click here for the latest edition.
News from AFMA

The latest edition of AFMA e-News covers highlights of articles published in the July/September 2020 edition of the AFMA Matrix, as well as other news relevant to the wider industry and value chains. Please click here to peruse.
UPCOMING EVENTS

Constraints to growing agriculture

Session 11 of the Agricultural Value Chain Virtual Discussion Series is available. This two part session looks at the constraints to growing agriculture and broadening the inclusion of youth and women in the sector. Part one addresses structural constraints to South Africa's agricultural growth and transformation.   The virtual discussion se ries platform went live on 24 April 2020.  This platform will continue to be open to anyone who would like to join the virtual discussions.  Please follow  the link to register and to access the platform for more information on the topics and panelists. Eleven sessions are ready to view . Registered participants will be alerted by SMS when a new session becomes available. 
PMA Fresh Connections: Southern Africa Conference
18-20 August 2020  | Virtual event
More information

2020 AgriAllAfrica Agribusiness Conference
Theme: "Imagined responses to Covid-19: Progress with the development of solutions"
29 October 2020 |  CSIR | Pretoria (live event tbc)
Enquiries: Marianna.duplessis@gmail.com | +27 063 076 9135

MPO Annual National Congress, cheese-making course and AGMs
4 November  2020 | Lythwood Lodge | Lidgetton | KZN Midlands
Contact Julie McLachlan: julie@mpo.co.za or 083 740 2720

3rd African Symposium on Mycotoxicology joint MYTOXSOUTH conference 
6-9 September 2020 | Stellenbosch

Agbiz Congress 2021
Theme: "Building resilient and sustainable agri-food ecosystems".
7-9 April 2021 | Sun City Convention Centre | South Africa

Second International Congress of Biological Control (ICBC2) 
26-30 April 2021 |  Davos, Switzerland
AGBIZ MEMBERSHIP
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