12
e-Newsletter
7/2020
28 February 2020
Agbiz reaction on 2020 Budget: Challenging times for South Africa

This was yet another challenging budget for South Africa. It was tabled at a time of low economic growth, constrained tax revenue and higher unemployment. At the core of reviving South Africa's economic fortunes is the sustainability of the power supply. While mismanagement of Eskom over the past few years is regrettable, we are encouraged that the government is committed to "do whatever it takes" to ensure stable electricity supply in South Africa. We hope this does not only mean a fixation to Eskom, but acceleration to the already ongoing reforms in the energy sector. The rising government debt related to especially Eskom remains a major concern.  "Although the budget broadly reflects the compromises between political stability, economic transformation and the need to have private sector-led economic growth, it touched on the right areas by addressing the bloated government wage bill directly, rather than to increase taxes to further counteract it," Agbiz CEO Dr John Purchase stated in an Agbiz media statement.
Progressive prosperity: Mboweni treading on thin ice
 
Mboweni's 2020 Budget aims to guide the economy away from spiralling debt even though this budget will see national debt climb. Success will require commitment of his Cabinet colleagues and public sector unions. This is not an austerity budget. But it suggests austerity budgets might have to be imposed in the future, and that would be disastrous for unemployment and poverty, writes Prof Miriam Altman, director of Altman Advisory, adjunct professor at UCT's Mandela School of Public Governance, and a commissioner on the National Planning Commission in the Presidency in the linked article, first published on Daily Maverick.
Economic remedies, but 'unfinished business' on national agenda means difficult policy choices still lie ahead

The 2020 Budget confirms the extent to which the South African economy still finds itself in a bad space, requiring a strong emphasis on measures to boost job-rich growth, says Norht-West University Business School economist Prof Raymond Parsons. The 2020 Budget Speech given to Parliament by finance minister Tito Mboweni was seized with a greater sense of urgency about the critical economic and fiscal challenges faced by South Africa and offered a difficult balancing act for addressing them in what have become very stressful economic circumstances. It also highlighted the need for collaborative leadership among government, business and labour. Read more in the linked media statement .
POLICY AND LEGISLATION
Amendment of section 25 - schedule for public hearings 

The Ad Hoc Committee on the amendment of section 25 of the Constitution resolved to host public consultations on the Bill in various provinces. Please click  the draft programme should you wish to participate.
AGRIBUSINESS RESEARCH
SA's 2019/20 summer crop looks promising
 
This promises to be a good year for South Africa's agricultural sector, at least from a production front. The data released by the Crop Estimates Committee (CEC) show that South Africa's 2019/20 summer crops production could increase by 26% y/y to 16.8 million tonnes.While this is still the first estimate for this season, with eight more to follow, if it materialises, this could be the second-largest summer crops harvest on record after the 2016/17 crop. The major gains are on maize, soybeans and sunflower seed. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article.
SA maize yields prove GM is the way to go
 
Society still argues about the use of genetically modified (GM) crops. Whilst some sentiments may be centered around consumer perceptions, empirical evidence has showcased two advantages in yields and savings on inputs that are difficult to contest. Firstly, the GM crops have contributed to an increase in yields in countries that have adopted the seeds, most notably the United States, Brazil and Argentina amongst others. This is evidenced in a working paper by agricultural economists, Jayson Lusk, Jesse Tack and Nathan Hendricks, published in the National Bureau of Economic Research, an American private nonprofit research organisation, in June 2017. Wandile Sihlobo elaborates on this topic in the linked article, written for and first published in Business Day.
Locust crisis
 
The authorities in Kenya, Ethiopia, Somalia and Uganda are struggling to control the spreading desert locust infestation. Recent reports from the Food and Agriculture Organization of the United Nations (FAO) suggest that the situation there remains "extremely alarming". Over the weekend, the Democratic Republic of Congo was the latest to report an infestation of the desert locust, which seem to have crossed over from Uganda with heavy winds. This is a threat to food security as these locusts are damaging field crops and grazing fields. The FAO estimates that the locusts have spread over nearly half a million hectares across the aforementioned countries. Wandile Sihlobo explores this topic in the linked article.
OTHER NEWS
Cash-strapped Stats SA to approach Treasury again for cash 

Cash-strapped Stats SA and minister in the presidency Jackson Mthembu will again approach finance minister Tito Mboweni for funds as it tries to solve its dire financial situation.  On Sunday morning Mthembu, under whose department the agency falls, met the statistician-general Risenga Maluleke and members of the Stats SA council who have threatened to resign en masse. Read more in the linked article, first published in Business Day.
Excise duties - government takes note of wine industry's plea

The South African wine industry acknowledges the greater understanding from government with the announcement of the latest excise duties during the 2020 Budget Speech. The Minister of Finance, Tito Mboweni, announced excise duty increases of 4.4% on natural wine, 6% on sparkling wine and 4.4% on brandy on 26 February 2020. "The wine industry had to absorb higher than inflation hikes in excise tax over the past few years despite the fact that the targets set by Treasury in 2012 were already reached," says Rico Basson, managing director of the wine industry body Vinpro. "The inflationary increases show an understanding from government of some of the challenges facing the wine industry. Our voice was heard." Read more in the linked Vinpro media statement.
SOPA: Premier has high hopes for major economic boost from cannabis

Eastern Cape Premier Oscar Mabuyane, in his State of the Province Address (Sopa) on Tuesday, pinned some of his hopes for the Eastern Cape's struggling economy on the legalisation of the cannabis industry.  Mabuyane announced that he had instructed the two special economic zones, in Nelson Mandela Bay and East London, to "aggressively attract" investors for cannabis production in the province.  He said the establishment of the Wild Coast special economic zone was progressing well and that the provincial government's intention was to "use it to unlock the entire agriculture value chain in the eastern side of our province". Read more in the linked article, first published on Daily Maverick.
Deere taps tractor-hailing tech in bid to break ground in Africa

John Deer is outfitting its tractors with startup Hello Tractor's technology, which allows farmers to hail the machines via an app, monitors the vehicles' movements and transmits usage information such as fuel levels.  The aim is to help the US company boost sales of it famous green and yellow John Deere tractors, a tough task in Africa with the world's highest poverty rate and the least mechanised agricultural sector. Read more in the linked Reuter's article.
Running out of time: East Africa faces new locust threat

Countries in East Africa are racing against time to prevent new swarms of locusts wreaking havoc with crops and livelihoods after the worst infestation in generations, according to a Reuters article. A lack of expertise in controlling the pests is not their only problem: Kenya temporarily ran out of pesticides, Ethiopia needs more planes and Somalia and Yemen, torn by civil war, can't guarantee exterminators' safety.
Zimbabwe's economic reform agenda off-track - IMF

The International Monetary Fund (IMF) said on Wednesday that Zimbabwe's economic reform agenda was off-track, and that without further donor support the risks of a deep humanitarian crisis were high, reports Reuters.  Zimbabwe is struggling through its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicine, fuel and electricity worsening. Hopes of a quick recovery under President Emmerson Mnangagwa are fading. Read more in the linked article.
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.
UPCOMING EVENTS
Diarise annual CCMA Labour Conference
 
The CCMA is convening its 3rd Annual CCMA Labour Conference at Emperor's Palace, Ekurhuleni on 11 March. It is organised by the CCMA and hence any interested party can attend. If you would like to attend the event, please RSVP by following this link to complete the registration form and for more information about the conference.This conference is an annual event intended for the CCMA and its stakeholders, where prominent and leading professionals share a stage to deliberate on the ever-changing and demanding labour market environment, in which the CCMA plays a pivotal role. In light of the aforementioned context, and being cognisant to the current socio-economic climate and the Fourth Industrial Revolution, the 2020 CCMA Labour Conference will focus on employers and the business community under the theme "The role of employers in the changing world of work". 
AFMA Forum 2020
Theme: "Explore today for a better tomorrow"
3-5 March 2020 | Sun City | South Africa

Skills Development Summit & Achiever Awards 
4-5 March 2020 | CSIR Convention Centre | Pretoria
Contact  Gordon Campbell: gordon.campbell@skillssummit.co.za

Transport Forum SIG 
Theme:  "Do we need high-speed rail?" 
5 March 2020 | Bunting Road Campus University of Johannesburg

Women in Tech Africa 2020 Conference 
18-19 March  | Century City Conference Centre  | Cape Town

GOSA Symposium 2020
19-20 March 2020 | Diaz Hotel & Resort | Mossel Bay
Theme: "2020 and beyond"

NSTF Plant Health discussion forum - IYPH 2020
6-7 May 2020 | Future Africa  | University of Pretoria | South St  | Koedoespoort

Agritech Africa
17-19  June 2020 | Cape Town International Convention Centre  | Cape Town

Agbiz Congress 2020
Theme: "Building resilient and sustainable agri-food ecosystems".
15-17 July 2020 | Sun City Convention Centre | South Africa

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

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

Soya Bean for Human Consumption Symposium
17 September 2020  | Pretoria

Second International Congress of Biological Control (ICBC2) 
26-30 April 2021 |  Davos, Switzerland
AGBIZ MEMBERSHIP
Why join Agbiz?
  • Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
  • Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.

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