It is year-end and I had planned to write an essay reflecting on the performance of the South African agricultural economy in 2018. But seeing that the data has largely been disappointing, particularly in the first half of the year, such a review would suggest that there was little positive developments in the sector, which would of course be untrue. There has been a lot of interesting developments in South African agricultural sector this year and some were highlighted in my personal blog, Agricultural Economics Today, during the year.
To get your mind off the key policy issues that consume most of our days, I want to single out a few of the initiatives that I manged to capture during the year. Here we go:
- Honey adulteration issues: In February I tweeted about honey adulteration – which simply means a production of fake honey using sugar or other ingredients (this meant that the consumer was paying the high price of honey for low priced sugar). At the time I suspected that the issue would be linked to foreign products only. Well, turns out we also have bad guys here in South Africa. How do I know this? From conversations with a number of beekeepers in Howick, KwaZulu-Natal. Read The Great South African Honey Puzzle. A number of media outlets followed up on the story to help raise consumer awareness and that caught regulators’ attention. We are yet to see what will happen in the coming months. This was, nonetheless, a positive thing for consumers and the South African bee industry.
- Horse meat: South Africa imported 80 tonnes of horse meat in 2017, up 51 percent year-on-year. The key supplier was identified as Brazil. Of the imported horse meat, only 5 tonnes was re-exported to the Maldives and Swaziland, the rest appears to have been utilised within the country. This year however, there were no imports. Read Are South Africans Ditching Horsemeat?
- Donkey Milk: While this idea gained momentum this year, it dates back to 2017 when Anga Holdings representative, Mompati Kgomanyane-Modimogale presented an idea of developing the donkey milk and other dairy products industry in South Africa. Kgomanyane-Modimogale viewed donkey milk as a good alternative for consumers with dairy allergies, and also as a supplement for breast milk. Aside from all the health benefits, what I found striking at the time was the price of donkey milk. In countries such as India, a litre costs roughly US$60 in November 2017 and closer to home in Botswana, 250ml was going for around 80 BWP (approximately R110.00). The industry is yet to establish itself in South Africa. Kgomanyane-Modimogale believes that a research and education drive about donkey milk products and their potential health benefits could improve public perception about donkey products in the country. Read Donkey Milk is Back!
- Black Farmers in the Eastern Cape Planting Wheat: Eastern Cape farmers alerted me to the possible expansion of winter wheat plantings to new regions in the country. Victor Mongoato, who farms in Matatiele, together with associates in Ugie and Maclear in the Eastern Cape, are doing field trials for various dryland winter wheat cultivars. The idea of possible expansion of winter wheat plantings in South Africa is encouraging given that the area planted has been steadily decreasing over the years. Between the 1994-95 and 2017-18 production seasons, the country’s winter wheat plantings declined by more than half to 491,600 hectares, according to data from the South African Grain Information Services. Read Dryland wheat farming in Eastern Cape needs support.
- Dagga-belt: After publishing an essay on Fin24 about South Africa’s potential ‘dagga-belt’ on November 2018, there has been growing interest from agricultural policymakers and senior practitioners looking to establish a flourishing cannabis industry with the potential of making a productive contribution to the South African economy. At the moment, cannabis has been de-criminalised in South Africa for private use. While the users or consumers might be thrilled with this, my interest is more on the international trade space to boost the economic benefits for the country. Read Is it time for South Africa to create dope jobs?
Aside from these new initiatives, we end 2018 on a mixed note from an agricultural economic perspective. The sentiment in the sector remains subdued as shown in the consistent deterioration of the Agbiz/IDC Agribusiness Confidence Index which fell to its lowest level in nine years in the fourth quarter of 2018. Conversely, the agricultural GDP rebounded in the third quarter of 2018, growing by 6.5% on a quarter-on-quarter seasonally-adjusted annualised rate as a result of increased output in horticulture and animal products.
This tells us we are not out of the woods yet. The recent uptick in agricultural GDP is no call for celebration as the recovery could be temporary, and as weather outlook, which initially painted a positive picture, could again prove to be a key challenge for summer crop growing areas and the performance of the agricultural sector in 2019. Having said that, the benefit of the recovery in the Western Cape’s weather conditions could provide a buffer in the sector in the first quarter of 2019. But, the overall annual performance will largely depend on weather conditions in the summer rainfall areas.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
