The business council of the Brics group gathered virtually in May to discuss priorities for the year, in preparation for the summit in August. The business council works collaboratively with the political heads and primarily focuses on commercial opportunities.
South Africa, the Brics chair this year, led the meeting and proposed the areas of focus. Within the agribusiness working group, which I chair, there are five priority areas:
Best practices on agriculture sustainable development. All the Brics members are major agricultural countries and agricultural production faces significant challenges in tackling climate change. This workstream is crucial and will build on the work already started by the China chapter in 2022.
Improve fertiliser availability in Brics countries and the broader African continent. This theme will explore ways of boosting fertiliser production and trade among Brics countries.
The drive towards smart climate agriculture and new farming methods, such as the EU’s green deal, requires new ways of production and investments in global agriculture. This requires innovative ways of financing. Given that some Brics members are more advanced in their agricultural sectors than others, information sharing is critical. This could be through virtual seminars and reports.
Trade and investment — although the Brics countries are primarily agricultural powerhouses, there is room to improve trade, with a focus on market access issues.
Academic interactions for private sector benefit — the working group will explore the academic programmes to align research and collaboration between academic and private-sector roleplayers.
These focal points were adopted by the global business council chapters and will inform the main programme of work of the agriculture and agribusiness sectors. The expected outcome or delivery model in each of the priority areas will include business facilitation, seminars and research papers.
Importantly, Brics is a political grouping, not a free-trade agreement; therefore, limitations in facilitating trade will remain, although the group offers the opportunity to highlight the barriers that each country experiences. South African agricultural roleplayers will be represented in these discussions.
Of these priority areas, the most urgent for South Africa are trade and investment, as well as the improvement of fertiliser availability. On trade, the main interest for South Africa is advancing agricultural exports, specifically to China and India. These countries have relatively solid economic growth prospects and large populations (and therefore markets). Brazil tends to be a competitor with South Africa in major agricultural commodities, while Russia is an important market for South African fruit and in turn, a major supplier of wheat. Still, since the Russia-Ukraine conflict, advancing commerce with the country is generally risky.
Brics countries account for a relatively small share of South Africa’s agricultural exports — an average of 8% over the past 10 years in total annual agricultural exports of $9.9bn (about R187bn). These calculations are based on data from Trade Map. China is the leading market, accounting for an average of 5% of South Africa’s farm exports. The top products were wool, citrus, beef, nuts and grapes. The second largest market within Brics was Russia, accounting for an average of 2%, with citrus, apples, pears, grapes and wine as some of the top products; while India and Brazil were negligible importers of South African agricultural products.
While the other Brics members imported an average of $764m annually in agricultural products from South Africa over the past decade, their total average annual farm imports were worth $196bn. This data excludes South Africa, to provide a view of the size of the agricultural market that South Africa is part of within Brics. South Africa a small player. China is the largest importer, accounting for 67% of total Brics agriculture imports, followed by Russia (16%), India (12%) and Brazil (5%).
These realities imply that within the agribusiness stream of the Brics business council and the broader political grouping, South African representatives should continue to press for lower import tariffs for agricultural products, specifically in India and China. At the same time, the business community will have to promote “proudly South African” agriculture (and broadly food, fibre and beverages) products within the bloc.
Overall, there is progress within Brics in identifying critical areas of focus, which the five business council chapters have now adopted. The next step will be to drill down on the delivery methods in these focal areas and ensure that each partner country benefits. The coming months will be seized with work on these issues, ahead of the meetings in August, where the business council will submit its recommendations to the heads of state.
- Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa, writes in his capacity as the chair of the Brics business council agribusiness working group
Written for and first appeared in the Sunday Times.
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