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.
26 June 2020
Minister Tito Mboweni delivers Supplementary Budget speech

This week, Finance Minister Tito Mboweni, delivered a Supplementary Budget which placed an emphasis on near-term spending reallocations to combat the Covid-19 pandemic and the associated economic shock. However, it also stressed the rapidly deteriorating debt dynamic and the need for active policy measures to ensure sustainable public finances. The Finance Minister also explained the tough economic conditions South Africa is currently in partly because of the Covid-19 pandemic. The National Treasury expects the South African economy to contract by 7.2% y/y in 2020, which is the largest contraction in nearly 90 years. From an agriculture perspective, the Finance Minister indicated that "government will also be allocating R3 billion to recapitalise the Land Bank. This bank holds 29% of South Africa's agricultural debt. The National Treasury is supporting the Land Bank to find a solution to its default and craft a long-term restructuring plan. The full Budget document is linked here.
Assessment of Supplementary Budget - Dr Azar Jammine

The North-West University Business School hosted a Think Tank where Dr Azar Jammine, director and chief economist of Econometrix, presented his assessment of Finance Minister Tito Mboweni's Supplementary Budget. Please click here to access Dr Jammine's presentation.
SA of today is paying dearly for yesterday's mistakes - Prof. Raymond Parsons

"The Supplementary Budget presentation by Finance Minister Tito Mboweni was inevitably going to be a 'bad news' one, with a bleak economic outlook.," writes Prof. Raymond Parsons of the North-West University Business School. "It confirmed that the country is facing its biggest budget deficit on record and the largest GDP contraction since the 1930s. The impact of Covid-19 globally and domestically, the prolonged lockdown of the local economy - combined with South Africa's weak economic pre-preconditions and universal 'junk' status - have made a new fiscal plan imperative for South Africa in view of drastically changed economic circumstances." Please click here for a media statement with Prof. Parsons' comments.
Municipalities are still in financial disarray, according to audit
Poor leadership and a lack of accountability are the culprits behind yet another year of dismal financial outcomes in local municipalities. The latest municipal audit results, presented to the National Council of Provinces (NCOP) on Wednesday 24 June, paint a grim picture of local government's deteriorating financial management. "Our analysis of the 2019 audit outcomes highlights the detrimental impact of weak accountability, especially in an environment where resources are ever scarce." This was deputy auditor-general Tsakani Maluleke's lament as she briefed the NCOP on the Local Government Audit Outcomes for the 2018/19 financial year. Please click here to peruse.
Food security and the informal sector
"The Covid-19 pandemic has amplified the urgent need to address bottlenecks in smallholder farming communities and cultivate the vast amounts of underutilised land across the country." This was the clear message of both Prof. Ferdi Meyer, managing director of the Bureau for Food and Agricultural Policy (BFAP), and Dr John Purchase, chief executive officer of the Agricultural Business Chamber (Agbiz), in a webinar hosted by Nedbank Business Banking. "What the pandemic has made very clear, is that there are two distinct levels of food security - at a national level, which is secure, and at a household level, which is very precarious," says Prof. Meyer. Purchase agrees, saying that the situation was fragile even before Covid-19. "We must acknowledge that the Zuma administration was disastrous for South Africans: per capita GDP was cut from $8 000 to $5 200, which means that South Africans are roughly 25% poorer in US dollar terms now than before the Zuma years," says Dr Purchase. Please click here for a post-webinar thought leadership article.
Presidency looks to infrastructure investment for post-Covid-19 recovery

This week, the Presidency hosted a Sustainable Infrastructure Development Symposium wherein the outline of South Africa's Infrastructure Investment Plan was set out. Infrastructure has long been recognised as a key driver of economic growth but the allotted amounts have not been fully spent over the course of the past few years. Underspending has come about as a result of a variety of factors but fortunately it means that an infrastructure investment-led plan can be realised without additional fiscal commitments. There is also a strong commitment to sourcing private sector investment into infrastructure. The framework for public-private-partnerships have not yielded significant private sector investment into infrastructure but the concept remains sound, and hence the commitment to review the framework for these investments is certainly a step in the right direction. Agbiz head of Legal Intelligence Theo Boshoff provides more information in the linked article.
SA is bleeding jobs, but agriculture may just surprise us

One of the key questions that consistently arises amid the Covid-19 pandemic impact on the economy is about the effects on employment.  In agriculture, there could be some resilience compared to other sectors of the economy because of the major two reasons.  First, the sector was largely operational even during the strict level-5 lockdown, except a few subsectors such as the wine, tobacco, wool and floriculture industries, amongst others. These subsectors subsequently opened when the country's lockdown moved to level 4 and 3, except for the tobacco industry whose sales remains prohibited, while harvest and fieldwork are permitted. Second, South Africa expects its second-largest grains harvest in 2019/20 season, a harvest process that in fact started recently. Also, there is an expectation of a record citrus harvest, general improvement in output in other fruits following drought years, and also a recovery in wine grapes output. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published on Fin 24.
Infrastructure investment key to unlocking growth in SA agriculture

There is consensus amongst South Africa's agricultural economists that the next frontiers for growth in the sector will be through the expansion of production mainly in the former homelands provinces (KwaZulu-Natal, Eastern Cape and Limpopo). The government land and underperforming land reform farms are also other additional avenues for expansion in agricultural output. The Eastern Cape and Limpopo have been amongst the provinces with the least contribution to the nation's agricultural fortunes, respectively accounting for 6% and 7%. Meanwhile, provinces such as the Western Cape, Free State, Mpumalanga, to name a few, contribute 22%, 10%, and 9% to national agriculture gross value added, respectively. A crucial step for South Africa is to understand why agricultural development has lagged over the past two decades in these provinces on the one hand, while commercial agriculture in other areas doubled output on the other. Agbiz chief economist Wandile Sihlobo discussed this subject at the SIDSSA Conference earlier this week. Please click here to peruse his speaking notes. 
SA food price inflation marginally increased in April 2020

South Africa's food price inflation marginally increased to 4.6% y/y in April 2020, from 4.4% y/y in the previous month. This uptick was mainly underpinned by relative price rises of meat; milk, eggs and cheese; and oils and fats. Meanwhile, other products decelerated and some remained roughly unchanged. In the case of meat, the base effects, following lower levels of last year when meat exports were banned on the back of foot-and-mouth disease, were the key driver of the uptick in April. In eggs, the sharp demand at the start of the lockdown period was, in part, a key driver of the uptick in prices. In terms of oil and fats, South Africa imports a notable share, therefore the weaker ZAR/USD partially supported the prices. Wandile Sihlobo discusses the latest data in the linked article.
SA set to have its second-largest summer grains harvest on record

South Africa's 2019/20 fifth summer crop production estimates data released this afternoon by the Crop Estimates Committee (CEC) reinforced the view that the country will have large grains supplies. The CEC left most production estimates roughly unchanged from the previous month with a notable downward revision of 17% from the previous month in groundnuts production estimate, which is now at 52 140 tonnes. Nevertheless, this is still more than double the 2018/19 season's groundnuts harvest. The 2019/20 maize and soybean harvest were revised down, marginally, by 0.5% and 2% form the previous month to 15.5 million tonnes and 1.3 million tonnes, respectively. Meanwhile, sunflower seed was left unchanged at
765 960  tonnes. Wandile Sihlobo discusses the data in the linked article.
Reopening from the Great Lockdown: uneven and uncertain recovery
The Covid-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives, but also triggered the worst recession since the Great Depression. Over 75% of countries are now reopening at the same time as the pandemic is intensifying in many emerging market and developing economies. Several countries have started to recover. However, in the absence of a medical solution, the strength of the recovery is highly uncertain and the impact on sectors and countries uneven,  writes Gita Gopinath, economic counsellor and director of the Research Department at the International Monetary Fund (IMF) in the linked  
IMF blogpost.
Agriculture and climate change

The McKinsey & Co. special report, Agriculture and Climate Change published in May 2020 highlights the untapped, and largely ignored, promise of beneficial changes from agriculture.  As a contributor to greenhouse gas (GHG) emissions, agriculture's role is higher than is widely appreciated, according to McKinsey. The report notes beef and dairy cows globally accounted in 2016 for 8 gigatonnes of GHG emissions, a vast figure that matches the entire annual emissions of the United States. The share of total global emissions from agriculture, forestry and land-use change is about 27%, significantly more than power and heat (18%) and not much less than industry (32%). Please click here to peruse.
Covid-19 and digital well-being at work

While digital technologies have made us more resilient during the Covid-19 pandemic, for some they have negatively impacted work-life balance. The Internet and other digital tools have dramatically increased the flow of information that workers manage, with direct effects on perceived stress levels.  Ahead of the launch of the OECD Employment Outlook on 7 July, the OECD looked at the impact of Covid-19 on digital well-being in the world of work. Please click here to peruse.
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. 
 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.
Ins and outs of the informal trade sector in South Africa (part 2)

Session 10 of the Agri Value Chain Virtual Discussion Series zooms in on the informal trade sector in South Africa. Senwes, in collaboration with the Agricultural Business Chamber (Agbiz), hosted a virtual discussion series on the agricultural value chain. The virtual discussion series 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. Eight sessions are ready to view. Registered participants will be alerted by SMS when a new session becomes available. 

Climate Smart Agriculture & International Trade Opportunities for South Africa
1-2 July 2020 | Zoom workshop
More information: francois.fouche@tradeadvisory.co.za

Transport Forum Special Interest Group
Theme: "Investment in the North-South Corridor"
2 July 2020  | Zoom meeting

2020 AgriAllAfrica Agribusiness Conference and Exhibition
Theme: "Pioneering new agri horizons"
5 - 6 August 2020 | Diamond Hall, CSIR | Pretoria
Enquiries: Marianna.duplessis@gmail.com | +27 063 076 9135

PMA Fresh Connections: Southern Africa Conference and Trade Show
19-20 August 2020  Sun Arena, Time Square, Menlyn Maine, Pretoria

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

Soya Bean for Human Consumption Symposium
17 September 2020  | Pretoria

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
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