Food products and nonalcoholic beverages have been classified as essential goods, and their production, distribution and retailing will continue during the 21-day coronavirus lockdown period. As such, one could expect the impact on the agricultural sector to be minimal, but is that true?
Intuition would lead one to expect that agricultural exports will be reduced as the Covid-19 pandemic creates mayhem in the global economy. But people have to eat, and logistics and movement of goods are continuing, so food demand should hold. It is therefore difficult to assess the impact of the lockdown regulations, how they are applied and the demand effects of the pandemic on agriculture without unpacking each sector by its subsectors, to enable us to determine who the government should assist in these trying times.
Stats SA has just released the results of its 2017 census of commercial agriculture, which could aid a better understanding of these issues. Speaking at the launch of the census results, agriculture, land reform & rural development minister Thoko Didiza announced that her department has ring-fenced R1.2bn for assistance to mainly small-scale farmers. The question is how they will be defined and how they qualify for support.
Read more in an essay by Professor Johann Kirsten of Stellenbosch University and myself in today’s Business Day. A link to an online version is here.
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