by Wandile Sihlobo | May 23, 2025 | Agricultural Environment and Natural Resource
Like many South Africans, I spent time this past week clarifying a few aspects of land reform and agriculture in our country following some misinformation about the sector in the White House.
The land discussion in South Africa is generally polarising and has been that way for some time. However, the claims that property rights are being undermined are incorrect.
Thus, I was comforted when a couple of political leaders came out affirming and clarifying that, as a country, we are committed to maintaining strong property rights as the land reform process continues fairly and transparently.
One of the gentlemen some were looking to get a word of comfort from is Mr Mzwanele Nyhontso, South Africa’s Minister of Land Reform and Rural Development. I called him last night, as we typically exchange views about rural development and land matters in our country. He was as troubled about the misinformation about land rights in South Africa as many of us.
And yes, I will admit, like many South African politicians who have talked about land reform, Minister Nyhontso has passionately expressed commitment to land reform that may have pushed the envelope about the possibilities of recent legislation a little farther than realistic.
But he insisted on the rule of law and reaffirmed what we all know: South Africa has no land expropriation.
Significantly, this country’s land reform policy has not changed. The new or updated Expropriation Act is not necessarily a land reform approach and is administered by the Public Works Department, not the Department of Land Reform and Rural Development.
In a formal media statement released on May 22, Minister Nyhontso stated that:
“All land acquired for land restitution and redistribution purposes by the government is purchased through a fair, transparent, and legal process. Land purchase from previous owners, particularly white owners, is based on negotiated agreements. This approach is aligned with protecting property rights and promoting inclusive development and improved access to land.”
The statement further stated that:
“The government remains committed to a land reform process that is constitutional, economically viable and socially responsible.”
This again shows that the land reform process in South Africa remains based on market-based principles and that the land policy has not changed. Indeed, there will continue to be heated discussions about the progress of land reform in South Africa and various ideas that people may pitch.
However, the important thing is that such conversations must happen fairly and transparently, respecting the rule of law and protecting property rights.
It is also essential to underscore that the South African government has acquired over two million hectares through the market over time, which is now in the State’s books. This land should be distributed, with title deeds, to black farmers, mainly to promote commercially viable agricultural activities.
Therefore, instead of only clarifying that there is no widescale land expropriation in South Africa, we must also focus on the government’s role and what it could do to ease the land pressures and ensure the better participation of black farmers in commercial agriculture. The first step is through Minister Nyhontsho’s department moving quickly to release the land to black farmers and partner with commodity associations and financial institutions to ensure the appropriate selection of beneficiaries and that there is necessary support for them to make the agricultural initiatives.
Overall, misinformation about the realities of agriculture and land dynamics in South Africa could harm investment and agricultural export activities. Indeed, when unfair activities occur, they must be raised, and the political leadership should always help in such matters. Equally, the government must ensure that the land acquired thus far is released to beneficiaries and that they have appropriate support to make land reform successful.
We must never forget that land reform must balance two aspects: (1) restorative justice and (2) economic growth; thus, it is essential not to hoard land but to release it with title deeds and speed. Our latest book, The Uncomfortable Truth About South Africa’s Agriculture (co-authored with Professor Johann Kirsten), discusses some practical implementation steps.
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by Wandile Sihlobo | May 22, 2025 | Agricultural Environment and Natural Resource
Ordinarily, people wouldn’t pay close attention when a country temporarily suspends poultry imports from another country. But at this time of heightened trade friction, such things get more attention and thus require some clarification.
South Africa has recently suspended the imports of poultry products from Brazil due to the avian influenza outbreak. The EU and China have also suspended poultry imports from Brazil.
Here is the thing: animal health is a global challenge, and we all should remain vigilant. In recent months, cases of bird flu have spread in parts of the US, UK, and, most recently, Brazil.
In South Africa, we still remember egg shortages in 2023 when avian influenza hit various regions. Against this background, we always observe the animal health conditions of our trading partners closely. One region that has worried us lately is Brazil.
South Africa, while an agricultural powerhouse and net exporter — exporting just under US$14 billion of farm products a year — still imports about 20% of its annual poultry consumption (roughly 350,000 tonnes of various pieces). The suppliers for various cuts include Brazil, the US, Argentina, and the EU. But Brazil has a sizable share in imports of around 70% annually.
So, when we read about the outbreak of highly pathogenic avian influenza (H5N1 – clade 2.3.4.4b) in some farms in the state of Rio Grande do Sul, we got worried.
Fortunately, the Brazilian authorities were proactive and exposed this disease’s risk to trading partners. To contain its spread, the certification of all poultry products was swiftly stopped from leaving Brazil.
Thus, on May 21, the South African authorities followed a similar approach of suspending imports from Brazil. South Africa’s Department of Agriculture stated that:
“as dictated by South African and international laws and practices, South Africa also suspended importation of all poultry and poultry products packaged on or after April 30 2025, effective May 19 2025. These include live poultry, eggs and fresh (including frozen) poultry meat. “
Of course, this will likely be temporary and aligned with routine global procedures. It is not a protectionist step by South Africa. As a country, we maintain a principle of openness in agricultural trade, with limited to no restrictions if commodities meet our specifications and follow the appropriate import regulatory standards.
We spend just over US$7 billion each year importing agricultural products that we don’t produce in large volumes (Of course, we export just under US$14 billion, making us a net exporter of farm products).
The authorities will independently assess over time when the ban could be lifted. This is a scientific matter and best left to the regulators to guide the process as they work to protect South Africa from the possible spread of animal diseases.
What is clear for now is that, given Brazil’s dominance in imports and its domestic issues with failing poultry farms, we could see temporary upside price pressures on consumers.
The extent and length of that will largely depend on whether the other domestic producers or supplying countries could slightly increase the poultry product supplies much sooner in response to Brazil’s current import glitches and the domestic poultry production challenges by some farming businesses (Daybreak Foods).
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by Wandile Sihlobo | May 22, 2025 | Agricultural Environment and Natural Resource
One of the themes that dominated the White House Press session this evening was agriculture – the idea that the farming sector in South Africa is under siege and people are running away. But this could be no further than reality.
The South African farming sector or farming community is not under siege. And yes, the country has devastating crime incidents, which should remain a significant worry for all.
However, it is necessary to state that land expropriation without compensation is prohibited in the country, that the recent Expropriation Act has been massively misrepresented, and that property rights remain intact. Land Reform is still based on the market principles of the willing buyer and willing seller.
Some have portrayed the agricultural sector as a victim, but it has actually made enormous progress over time, contributing significantly to the country’s overall economic growth. The sector has more than doubled in value and volume terms since 1994.
This expansion was broadly shared across all major South African farming economy subsectors, including horticulture, field crops, and livestock.
Catalysts for South Africa’s agricultural growth
Amongst other interventions, two major catalysts are behind the sector’s progress.
First, South Africa has adopted technological advancements in agriculture to drive productivity. This entails improved genetics, seed cultivars, vaccines, agrochemicals, and fertilisers, among other interventions. Better farming skills also help immensely.
Second, the growing emphasis on agricultural trade has been a key driver of progress. South Africa has seen growth in its agricultural exports over time, reaching a record US$13,7 billion in 2024. South Africa is now ranked the world’s 32nd largest agricultural exporter, the only African country in the top 40 in terms of value.
The boom in exports was facilitated by the range of trading agreements the South African government secured over the past decades, the most important ones being with African countries, Europe, the Americas and some Asian countries.
The African continent and Europe now account for approximately two-thirds of South Africa’s agricultural exports, while Asia is also becoming an increasingly important market.
Food security gains
The increase in agricultural output over time is also a major contributor to South Africa’s ranking of 59th out of 113 countries in the Global Food Security Index, making it the most food-secure country in Sub-Saharan Africa.
Admittedly, boasting about this ranking when millions of South Africans go to bed hungry every day may ring hollow. We have a serious food insecurity challenge at the household level in South Africa.
Many South Africans lack access to food primarily due to income poverty challenges rather than a lack of availability resulting from low agricultural output, as is the case in other parts of Africa.
In essence, we need to ensure that there is employment and that households have sufficient income to purchase food, or implement various interventions to support them, while being cognizant of the fiscal constraints the country faces.
Robust employment
Even with the adoption of technology that catalyses agricultural productivity improvements, employment in South Africa’s agriculture has remained robust. For example, according to data from Stats SA, about 922,000 people were employed in the industry in 1994, including seasonal and permanent labour.
While the share of seasonal and regular labour changed over time, broad employment conditions remained vibrant. As of the last quarter of 2024, approximately 924,000 people were employed in primary agriculture.
We have also seen more encouraging employment conditions within the value chain. Notably, wages have also improved over time.
Inclusivity in South Africa’s agriculture
The agricultural progress of the last 31 years is admirable and provides a solid foundation for further expansion, with a clear focus on enhancing inclusivity. As I argued in my book, “A Country of Two Agricultures“,
“Nearly three decades after the dawn of democracy, SA has remained a country of ‘two agricultures’. On the one hand, we have a subsistence, primarily non-commercial and black farming segment; on the other, we have predominantly commercial and white farmers.”
The book adds that:
“The democratic government’s corrective policies and programmes to unify the sector and build an inclusive agricultural economy have suffered failures since 1994. The private sector has also not provided many successful partnership programmes to foster the inclusion of black farmers in commercial production at scale. It is no surprise that institutions such as the National Agricultural Marketing Council estimate that black farmers account for less than 10%, on average, of commercial agricultural production in SA.”
This lacklustre performance by black farmers in commercial agriculture cannot be blamed solely on historical legacies. The democratic government has a lot to account for in this failure.
Notably, black farmers account for approximately 10% of South Africa’s commercial agricultural output. Still, as I argued in the book;
“What we can also not ignore is the anecdotal evidence pointing to a rise of black farmers in some corners of SA. We see this in field crops, horticulture and livestock in provinces such as Free State, Western Cape, Eastern Cape and other regions.”
Concluding remarks
I have decided to revisit these points because, amid the current climate where some argue that the South African farming sector is under siege, it is easy to fall for such narratives and lose sight of the progress South Africa is making in this critical sector of the economy.
As I highlighted in my book, “A Country of Two Agricultures“, South Africa has great potential to increase the “agricultural pie” by bringing in more new entrant farmers, utilising, as a starting point, much of the government’s underutilised agricultural land of roughly 2.5 million hectares. This land would need to be released with titles to appropriately selected individuals. This can be paired with blended finance support and leaning on the training and support of commodity associations.
The expansion of agricultural activity would bring much-needed jobs to rural South Africa while also improving its economic vitality and inclusivity. This could be an essential step for this decade to close the gap between the current two agricultural sectors in South Africa.
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by Wandile Sihlobo | May 21, 2025 | Agricultural Production
The warm and dry weather conditions we have been enjoying since the first week of this month are finally paying off for the summer grains and oilseed regions. The fields have dried up in some areas, and the harvest is gaining momentum.
Over the past few weeks, the grains and oilseeds lagged by double digits from the previous season’s pace as farmers struggled to get into the fields because of the April rainfall. The season’s late start has also contributed to the slow harvest process.
One crop that encountered this challenge is soybeans, whose 2025-26 marketing year started in March, but the harvest was pretty slow for months.
I was delighted when we received the producer deliveries data for May 16 and noticed that in a week, farmers delivered 530 509 tonnes of soybeans to commercial silos. This puts the producer deliveries from March to May 16 at 1,5 million tonnes, up 10% from the same period last year.
Admittedly, the fact that we expect a large harvest this year also means the deliveries were going to surpass the year’s pace at some point. We expect a soybean harvest of 2.3 million tonnes, up 26% year-over-year. This annual uptick is mainly due to better yields from last year’s drought.
The domestic market’s annual soybean requirements are roughly 1.85 million tonnes. A harvest of 2.3 million tonnes will keep South Africa a net exporter of soybeans.
The large harvest will also likely keep the soybean prices under pressure and benefit the domestic poultry and livestock industries that use soybeans as feed. As I recently stated, the soybean prices are already moderating. For example, the spot price, July 2025, and September contract months prices are down 20% from a year ago and traded around R7,100 per tonne on March 19.
The one aspect that remains unclear is the quality of the harvest. But given that we haven’t heard many complaints, it is fair to assume that the crop is likely not as severely affected as we initially feared.
Overall, what is comforting right now is the progress with harvest, permitted by the better weather conditions.
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by Wandile Sihlobo | May 21, 2025 | Food Security
Food prices have been in the headlines globally, but in South Africa, the situation is clear; we are food secure at the national level, but struggle with food insecurity at the household level. The primary challenge in our assessment is income poverty, not the lack of availability or expensive products. But that is not what I want to explore further now (you can read more here).
I want to comment briefly on consumer food price inflation data. However, one clarification is essential before we do so: we must never forget that relatively lower inflation does not equate to lower prices. Inflation is the pace of price increases.
Now that we have that out of the way, the data released today by Statistics South Africa shows that consumer food price inflation accelerated to 3.3% in April from 2.2% in the previous month.
This increase was underpinned by the rise in price inflation of most food basket products, most notably cereal products, meat, oils and fats, and vegetables. This is unsurprising and reflects the pass-through of the higher agricultural commodity prices we observed at the end of last year and into the start of 2025, particularly with grains.
In the case of meat, price increases are expected as a response to the slight recovery in consumer demand, which we have been highlighting over recent months. In the case of vegetables, we see the increases as a reflection of disruptions in field work caused by the excessive rains in recent weeks, which should be a temporary blip.
Looking ahead, we suspect that the current mild quickening of food price inflation will prevail for much of the year’s second and third quarters as the increases in the farm level of some of the key products, such as grains, continue to pass through to the retail level.
While grain prices have softened recently, they were elevated for much of the last quarter of 2024 and into the start of this year because of the tight maize stocks. There is generally a lag of three to five months before the increases at the farmgate begin to show at retail levels.
Thus, while grain prices have now softened in anticipation of an ample harvest in the 2024-25 season, we will continue to see a different price direction in the food inflation basket for months. Still, we don’t anticipate that the increases will be as sharp as the wheat and rice prices, which are other key cereals that have generally seen prices softening in the past few months.
Regarding vegetables, the recent price increases partly reflect some regions’ challenges with harvesting because of extra wet conditions. As such, we expect the prices to normalize in the coming months. Importantly, vegetables and fruits don’t have a longer price lag than grains.
In the case of meat products, the price direction may soon change because of the potential increase in domestic supplies. A foot-and-mouth disease outbreak is temporarily closing some key export markets and likely raising domestic red meat supplies.
The counter factor to this possible moderating trend could be poultry prices. South Africa imports roughly 20% of its annual poultry consumption, and over two-thirds of imports from Brazil. There is now an outbreak of avian flu in Brazil, which could limit their poultry exports.
Under such a scenario, the key determinant will be whether South Africa can boost domestic supplies or source additional imports from other regions. We suspect this may have slight upside pressures. Still, we think meat price inflation may be sideways to slowing.
South Africa’s headline CPI was 2,8% in April 2025, down from 2,7% in March.
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by Wandile Sihlobo | May 20, 2025 | Agricultural Environment and Natural Resource
The South African poultry industry typically dominates headlines for various matters such as food security, tariffs, and disease outbreaks. However, they may face a slightly better operating environment in the coming months than in the past.
We are emerging from higher feed costs and the spreading avian influenza, amongst other issues. This period was an additional financial strain on poultry farming businesses.
But I think we are now in an environment where feed prices may continue to moderate, guided by the decline in yellow maize and soybean prices. The contract months’ prices of yellow maize for the coming months already point to the moderating environment. On March 19, they traded around R4,000 per tonne, down roughly 4% year-on-year. This is true for the July 2025, September, and December contract month prices.
We see an even more significant price moderation in soybeans. The spot price, July 2025, and September contract months prices are down 20% from a year ago and traded around R7,100 per tonne on March 19.
The improved production underpins the softening trend of these commodity prices. Yellow maize is up 2% from the 2023-24 production season, estimated at 6.91 million tonnes. We had a soybean harvest of 2.3 million tonnes in the 2024-25 production season, up 26% year over year.
Indeed, the base effects after a drought year add to this improvement, along with decent area plantings and better yields. Admittedly, there remains uncertainty about the quality of the harvest, especially the soybeans, because of the excessive rains late in April. We will know more about the quality of the crop in the coming weeks as the harvest progresses.
On May 9, the first ten weeks of the new marketing year, the South African farmers delivered just under half of the expected soybean harvest, about 977,797 tonnes out of the anticipated harvest of 2,4 million tonnes. While this looks decent, it is 16% below the volume farmers had delivered this period last year.
The slow harvest illustrates that the season was late, and the prolonged rains may present quality issues. Be that as it may, the view remains that the volume is up, which is conducive for the soybean users.
What is comforting is the ample global soybean supplies, which may add downward price pressures on the international front. While South Africa is now a net exporter of soybeans, the global dynamics still matter a lot for the price direction. The same applies to yellow maize.
In its latest update, the International Grains Council forecasts the 2025-26 global maize production at 1,3 billion tonnes, up 8% year-on-year. The uptick is expected to be in all major maize-producing regions worldwide. The 2025-26 global soybean crop is estimated at 428 million tonnes, up 3% from the previous season.
Indeed, this season starts in the northern hemisphere and will only start later in the year in the southern hemisphere. Still, after decent supplies in the 2024-25 season in the northern hemisphere, the signalling of an even better harvest is conducive for softening prices for soybean and maize users.
Another essential dynamic for the local poultry industry is its resilience in managing the recent avian influenza outbreak. Still, one can never boldly say they are out of the woods, as we continue to see cases of avian influenza in the US, UK, and Brazil.
This means South Africa must remain vigilant and form an agile system of vaccine registration when required to assist the industry. The disease can devastate industry and food inflation; hence, vigilance and surveillance are paramount.
Considering all these risks, I remain optimistic that this year promises a much better operating environment for the poultry industry than the difficulties they recently faced.
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by Wandile Sihlobo | May 19, 2025 | Agricultural Machinery
With the optimism we see in the sector, and anecdotally at NAMPO engagements, one can only assume that associated industries such as the farming machinery will see a further uptick in the coming months. After all, we often hear that big deals are sometimes made at NAMPO, and farmers get to see the excellent and new equipment from the various suppliers.
We will now be watching the monthly data closely in the coming months. For the first quarter of the year, the figures have been encouraging. For example, tractor sales increased for the fourth consecutive month, up 5% year-on-year in April 2025, with 527 units sold. The combine harvesters’ sales were even more encouraging, up 77% year-on-year in April, with 46 units sold.
As we stated in these pages recently, the substantial increase in sales primarily reflects the sector’s positive sentiment about the 2024-25 crop and horticulture harvest due to favourable weather conditions and the base effects, given the weak sales in 2024.
Indeed, the heavy rains in April have caused concerns about the crop quality. Still, there remains optimism about the yields, which supports the robust sales. The Crop Estimates Committee forecasts South Africa’s 2024-25 summer grain and oilseeds production at 18.01 million tonnes, 16% higher than the 2023-24 production season, representing a decent recovery from drought.
If we reflect briefly on the past few years’ performance, it is fair to say that the poor agricultural machinery sales performance in 2024 resulted from three major factors. First, South Africa’s agricultural sector had higher machinery sales between 2020 and 2023. Improved farmers’ incomes supported higher sales due to an ample harvest and higher commodity prices. Thus, there was bound to be some correction, leading to a moderation in sales in 2024. Second, we struggled with a mid-summer drought in the 2023-24 season, weighing on farmers’ fortunes and worsening sales performance. Lastly, the relatively higher interest rates for much of 2024 added to the economic pressures on the sector, leading to poor sales.
This year, however, things are different, as sales in the first quarter have already shown. The interest rates have eased somewhat from last year’s levels, although there remains uncertainty about the path ahead given the renewed risks to the global economy.
Also, agricultural production conditions are favourable across most commodities. Also worth noting is that some farmers may start with machinery replacement in the coming months. All this will support the sales of tractors and combine harvesters. Of course, we also lean on the generally improved sentiment in the sector, as illustrated by the Agbiz/IDC Agribusiness Confidence Index (ACI), which increased in the first quarter of 2025 compared to the end of last year.
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