There is consensus among agricultural role players that sustainable growth in SA’s agricultural sector can only be achieved through the expansion of production. An expansion of export markets must be a key support pillar for growth.

This has been well-understood for many years. For nearly three decades SA excelled at opening new export markets, which has supported the growth the sector has witnessed since 1994. SA has successfully negotiated several free trade agreements over the past few decades, with critical regional and international markets.

These include the Southern African Development Community (Sadc) free trade agreement, the Sadc-EU economic partnership agreement, the SA Customs Union (Sacu)/Mozambique-UK economic partnership agreement, the African Continental Free Trade Area (AfCFTA) and the Sacu-Mercosur (South American) preferential trade agreement.

All of the agreements highlighted above were concluded over the past 16 years, which was quite a feat given the technical and institutional demands that must be committed to negotiating and successfully implementing trade agreements. I should note, however, that the actual free trade agreements are for only two of SA’s biggest markets — Africa and Europe — which collectively account for two-thirds of the country’s total agricultural exports in value terms.

The SACU-Mercosur preferential trade agreement is a narrowly focused and low-ambition trade arrangement and has not had a significant impact. That said, it could be argued that the opening of markets through these agreements has deepened, consolidated, and improved SA’s position in the EU and Africa.

Recently we have seen a rise in the use of nontariff barriers in these critical markets, such as the regulation of citrus exports in the EU and the ban on vegetable imports from SA by Botswana and Namibia. This means the SA authorities and industry will need to collectively work towards strengthening our relations in these markets and restoring the export position the country has enjoyed for some time.

Simultaneously, SA would be best served by diversifying its export markets beyond Africa and Europe. The Middle East, the Far East, and North and South America now account for about a third of SA’s agricultural exports. This is perhaps where more attention and pursuit of free trade agreements would be most beneficial.

Some of SA’s fiercest competition in a variety of products comes from Chile, Peru, Australia, Argentina, New Zealand, and Uruguay. They have struck trade agreements with most markets in Asia, the Middle East, and the Americas, whereas SA has not, and therefore faces higher tariffs than key competitors. Local producers have to overcome these tariffs primarily through farm-level technical efficiency.

Tariff cuts

SA does not actually have to follow the same path as the countries above and open free trade agreements with all of the countries in those regions. SA is an industrialising economy with a unique set of challenges and with various domestic industries that still require some protection.

We could target low-ambition trade agreements with specific countries, primarily preferential trade agreements, which focus on liberalising a specific set of commodities and agro-processed products. There is little chance of SA embarking on deep and extensive tariff cuts on goods and services, especially given that the costs of opening up markets cannot be determined with certainty.

In this quest to widen SA’s agricultural exports, even within a narrow path, the main countries should be China, South Korea, Japan, the US, Vietnam, Taiwan, India, Saudi Arabia, Mexico, the Philippines, and Bangladesh. These countries have sizeable populations and import a significant volume of agricultural products, specifically fruits, wine, beef, and grains. And they are already on the radar of the SA authorities. At the same time, we should not neglect continuous constructive engagements with Europe and the African continent as we search for new markets.

Aside from the broad trade policy themes, efficiency in the logistics industry remains a crucial area. The sector engages with Transnet and Infrastructure SA, as well as various government departments responsible for roads, to achieve this particular goal.

There also needs to be increased security within the logistics, as we have seen an increase in reported cases of criminality against SA’s infrastructure in recent years. Despite all these challenges, the interventions made by Transnet, industry, and government have yielded positive results when it comes to agricultural exports thus far. In the data, we have for the first eight months of this year SA’s agricultural exports amounted to $8.9bn, up 6% from the first eight months of 2021.

The generally higher commodity prices have also contributed to this increase in export values. In these months Africa and Europe remained vital markets, underscoring the points argued above. Citrus, maize, nuts, wine, sugar, apples, pears, and grapes were among the key exports, especially in the latter months under consideration.

SA’s agricultural trade approach is not one-sided. The country also imports a range of products. Imports for the first eight months of 2021 amounted to $5.1bn, up 13% from the same period in 2021. Palm oil, rice, wheat, and spirits were among the essential imported products, specifically in the later months of the measured period. The key suppliers included Indonesia, Thailand, Romania, China, Argentina, Poland, and Germany.

Focused trade policy

Overall, SA’s agricultural growth path needs a focused trade policy strategy, but this should not be at the expense of existing agreements that have sustained the sector over the years. The industry and government should work collaboratively on strengthening the existing markets through continuous engagements at the political and business level while simultaneously exploring new and promising markets.

Conversations and collaboration between industry and logistics entities such as Transnet are crucial for the success of the export strategy. Logistics efficiency improvement is an integral part of the agriculture growth agenda that will ultimately deliver jobs and economic activity in rural SA.

Written for and first published on Business Day.

Follow me on Twitter (@WandileSihlobo). E-mail:

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