Agricultural Economics Today

On 20 May 2018, sitting in a coffee shop in Pretoria, I came across this honey (picture below). Sweet as she was she was totally unsure from where she came.

What bee produced you, honey? She replied “Bees have dual citizenship these days, so I usually just wing it on my label”

 

The ‘mixed labelling’ issue on honey products should not be taken lightly, especially given the recent upsurge of ‘natural honey’ imports into South Africa. South Africa’s honey imports increased from 476 tonnes in 2001 to 4 206 tonnes in 2017 (chart below).

This is mainly due to steady domestic demand, coupled with a decline in domestic honey production. But, worth highlighting is that on average, 76% of South Africa’s ‘natural honey’ imports came from China in the past 17 years.

I mention this because the Chinese honey has in the past dominated the headlines, but not in a good way. In 2014, food24.com ran an article which highlighted that Chinese farmers were caught producing counterfeit honey.

Europe had similar experiences with imported honey to such as extent that the in 2014, the European lawmakers ranked honey on the 6^th spot on the list of 10 top products that are most at risk of food fraud.

This has been a big scandal, and even Netflix, went as far as shooting a documentary about it entitled “Rotten — Lawyers, Guns & Honey.”

Again, what bee produced you, honey?…..

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Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Having spent the past three days in Bothaville – the heart of the South African maize industry — I feel compelled to say a few words about its global significance. Maize is the most important field crop produced in South Africa, so there is obviously a lot one can say about it. But my focus in this blog entry will be on trade.

South Africa is an important player in the global maize market, ranked as the 9th largest exporter in 2017, according to data from Trade Map. The countries that performed relatively better than South Africa were the United States, Brazil, Argentina, Ukraine, Russia, France, Romania and Hungary. These countries collectively accounted for 88 percent share in 2017 global maize exports.

South Africa accounted for roughly 2 percent of global maize exports. Most importantly, South Africa was the only African country amongst the top 24 leading global maize exporters.

The leading markets for South Africa’s maize exports are typically Japan, Taiwan, Botswana, Zimbabwe, Swaziland, South Korea, Namibia, Lesotho and Mozambique, amongst others. These countries could remain the key markets this year.

Spain – currently a leading buyer of South African maize in the 2018/19 marketing year – could be a new addition to the list if the volume of exports seen in the past couple of weeks continues over the coming months.

This year’s maize exports are estimated at 2.3 million tonnes, down by 4 percent from the previous year. 

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Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

By Wandile Sihlobo and Mpumelelo Mkhabela

On 18 May 2017, we participated in a panel discussion hosted by Nation in Conversation at NAMPO in Bothaville. The discussion focused on the involvement of youth in the agricultural industry.

The panel included of Andile Khumalo, the moderator of the panel, agricultural economists Hamlet Hlomendlini and academic Dirk Strydom, as well as farmers Nono Sekotho and Anthony Goble.

Here are some of the points that emerged:

• There is a general consensus that farmers are ageing – the average age of a South African farmer estimated at 62.

• Young people are interested in agriculture, but not enough of them make the leap.

• Not enough vocational training institutions are efficiently producing skills needed for agriculture today –part of the reason is the disjoint between the agricultural industry and training institution.

• There is a need for platforms where youth aspiring to get into the industry can get information and guidelines on how to participate in the industry.

• For South Africa to realise its full potential, we should take advantage of the youthfulness of our population. Young people must be integrated into the productive side of the agricultural value chain instead of seeing them only as a consumer market.

• There are a plenty of opportunities in agriculture beyond actual primary production. More opportunities are in the entire value chain.

• Organised agriculture should get involved in the running of training institution so that graduates obtain relevant qualifications and direct access to the industry. This will help end the painful phenomenon of unemployable graduates.

• Young people with a passion for farming must not wait for land – they must find avenues to access training in the meantime so that they are better equipped for when the land becomes available. This must include approaching farmers directly for experience on farming.

• There is a need for increased funding for research and development – especially with the changing nature of the industry.

• The image of agriculture must change so that young people don’t regard it as backwards.

You can watch the full discussion here.

Enjoy!

 

On 17 May 2018, I participated in a panel discussion hosted by Nation in Conversation at NAMPO in Bothaville. The discussion focused on the importance of the economy of scale. Stripped of all the technicalities, the question we had to answer was down to this: does size matter in South African farming?  

The panel consisted of Theo Vorster of Galileo Capital, Professor Ferdi Mayer of the University of Pretoria and the Bureau for Food and Agricultural Policy, Jannie De Villiers of Grain South Africa and Francois Strydom of Senwes.

Here are some of the points I made on the topic:

• Given that South Africa has somewhat a dualistic economy – formal and informal economy – there is room for both small and big farms. Big farms are key to national food security and driving exports, while small farms continue to serve local markets, where big players can’t really get involved (not economically viable for them, etc.).

• Brazil is a good example of the aforementioned point. They have mega-farms, commercial farms, medium-scale farms and small farms – all serving different needs of society. 

•  To get the small farms viable, however, there’s a need for improvements in infrastructure in the former homelands, so that farmers can access the markets more efficiently.

• A point emphasised by all panellists — small farmers in communal areas should have title deeds to the land so that they can unlock investments. Title deeds are key to prosperity.

•  The private sector has a role to play particularly from a knowledge sharing perspective.

• Most importantly, the national discussion on the future of agriculture should rather focus on boosting productivity across farms, not particularly farm size.

The bottom line was that South Africa needs both big and small farms as they all serve society in somewhat different ways. Improvements in infrastructure in communal areas should be prioritised. New technologies can also play a critical role in this process.

Overall, government and private sector should work hand-in-hand in ensuring the success and sustainability of the South African agricultural sector.

OK, I know I am overly simplistic in some points here – for more details — you can watch the full discussion here.

Enjoy!

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Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za