by Wandile Sihlobo | Feb 23, 2025 | General Comments
On the sunny morning of 5 April 2021, when the Covid-19 pandemic had provided a breather following a sharp wave of infection, I drove from my office at the Agricultural Business Chamber of South Africa in Pretoria to a farm in Bronkhorstspruit.
Bronkhorstspruit is a small town of roughly 3 720 people, located 50 kilometres east of Pretoria in the Gauteng province of South Africa. I was on a visit to Gift Mafuleka’s farm. Gift is a young, black commercial farmer who hails from the Esikhawini region of Richards Bay in KwaZulu-Natal. He started farming commercially in Bronkhorstspruit after a successful stint at McCain Foods South Africa (McCain), where he had progressed to crop manager on one of their farms. After he left McCain to start his own enterprise, he leased a farm from the South African government, which it had obtained from private owners for the purpose of land reform – known as Proactive Land Acquisition Strategy (PLAS) farms, one of the land redistribution strategies introduced in 2006. The farms acquired in this manner are not transferred to black land reform beneficiaries; instead, they are given non-tradable short-term leases, while the ownership of the land remains with the government.
These leases typically vary from five to 30 years, followed by the option to transfer ownership, which seldom happens. This time frame in itself is frightening, as it suggests that if one receives a lease at age 30, one might have an option to buy the land at the age of 60 – this in a country where World Bank data suggest that life expectancy was 64 in 2019. This means a person can farm their whole life without ever feeling ownership and making a tangible investment in a farm under legislative arrangements such as the Proactive Land Acquisition Strategy. There might be other arguments against this point, but this book is not about land reform, so I won’t dive into this further. Suffice to mention that this method of land reform has many downsides that constrain black farmers, some of which I discussed in my previous book, Finding Common Ground: Land, Equity & Agriculture. The commonly cited challenge is the lack of collateral, which leaves the land reform beneficiaries cash-starved and often causes their farming ventures to fail.
Gift’s story on the day of my visit was a positive one. The Cable News Network (CNN) was shooting a segment for its show, ‘Connecting Africa’, with journalist Eleni Giokos showcasing the success of African farmers and the untapped potential in this sector. They chose Gift, in part, to show the success of young black farmers. This is not mentioned in the show, but was shared with me by the producers in our conversations after the shoot. Gift was in the middle of cabbage harvesting, one of various vegetables produced on his roughly 350-hectare farm. My role there was to speak broadly about the untapped agricultural potential and avenues of investment in South Africa’s agriculture and in other parts of the African continent. The expansion in area of plantings that focus on labour-intensive and high-value agricultural commodities and investment in various value chains were some of the issues we discussed, along with opportunities for agricultural input providers.
After everyone had left, I sat down with Gift to chat about agricultural conditions, which in his case were positive as South Africa received a lot of rain in the 2020/2021 summer season. Gift was curious to know about the agricultural policy discussions in Pretoria and what we thought was the way forward to improving the participation of black farmers in commercial agriculture. After all, as of 2022, black farmers have produced between 5% and 10% of total agricultural output in South Africa. What Gift was essentially asking about were the practical means of confronting the dualism that exists in South Africa’s agricultural sector, while simultaneously ensuring the growth and sustainability of the sector.
The poor and slow implementation of land reform, inefficient government decisions and support systems, poorly structured financial support, bureaucratic delays, drought and diseases have all entrenched the divide between commercial agriculture (mainly white) and subsistence farming (mainly black).
Indeed, at the dawn of democracy, few people probably thought that South Africa would still be battling with the phenomenon of ‘two agricultures’ – or dualism – nearly three decades on. Although some progress has been made, as black farmers have joined commercial production and supply chains, the numbers are still disappointing, at less than 10%. Admittedly, there are commodities in which the inclusion of black farmers is much better than others. A case in point is the wool industry, tomato production and cattle, where black farmers’ contribution is more than 9%. There has been a deliberate effort by both the private sector and government to jointly support black farmers in these commodities; hence their inclusion at the commercial level is notable. I should also emphasise, however, that this is at best a guestimate and unfortunately hides the amazing progress in maize production, wool production, commercial beef output (where black farmers are responsible for a substantial share, of 34%), and some horticultural products.
In addition, the numbers also do not consider transactions in informal value chains and sales in small local markets. This is because the reported shares are largely extracted from records provided by the commodity organisations as part of their commitment to transformation. The incomplete picture is also a result of how the agricultural census conducted by Statistics South Africa was done by only including Value-Added Tax (VAT)-registered farmers. The 2017 agricultural census excluded 92 634 households that practised commercial farming as their main source of income, and a further 122 200 households that practised commercial farming as a secondary source of income (these are estimates from Statistics South Africa’s Community Survey of 20166).
Therefore, one can assume that around 214 800 farming households (black and white) who practise some forms of commercial farming were excluded from the agricultural census. Most of these are micro-enterprises with gross farm incomes below R500 000 per annum, but still are commercial since they sell produce.
Reasons for the slow progress of black farmers
There are several reasons behind the slow progress in black farmers’ total share of farm output. First, a lack of direction, critical and fast decision making in the national and provincial governments, as well as poorly designed programmes to support black farmers to become part of the commercial sectors. These have been a challenge for years.
Second, there has been poor adoption of the latest technology to increase productivity. The commercial farming sector, whose output has more than doubled in real terms since 1994, was able to leverage technological innovation and expansion in export markets when South Africa integrated into the world economy after years of isolation, but new entrants have not always succeeded in doing so.
Third, there is a lack of collaboration between the government and the private sector as manifested in commodity organisations, agribusinesses, commercial farmer organisations, etc. This results in the slow implementation of farmer development plans. The farmer organisations are frustrated with the lack of delivery and extreme bureaucracy.
Fourth is the inefficiency of many of the provincial departments of agriculture. This results in poor and non-delivery of critical programmes to support farmers with effective broad based support programmes, especially in the former homeland regions in KwaZulu-Natal, the Eastern Cape, Mpumalanga, North West and Limpopo.
This list is not exhaustive, but it is to provide a reader a feel of the challenges that confront new entrant black farmers in South Africa.
These many factors contributing to the continuation of dualism in South African agriculture, and frustrations for young black commercial farmers like Gift Mafuleka, only require effective policy making and the right incentives
Overall message
This book will focus less on history and more on the present and the future. My motivation in writing this book was to understand why the agricultural sector is still marked by inequalities nearly three decades after the onset of democracy.
The contribution of this book is to explain why these disparities have persisted in the democratic era, and what it would take to overcome them. I dissect these issues against the backdrop of major shifts in the agricultural landscape occasioned by the Covid-19 pandemic, Russia-Ukraine war, technological shifts, and changing external market conditions.
In the book, you will find the story of the evolution of South Africa’s agriculture since 1994, and the particular challenges facing the sector. Amongst other subjects, the often ignored importance of agricultural finance, the importance of trade for South Africa’s agriculture, as well as agriculture and technology. The book is intended to give the reader a full picture of the sector, painted less in arcane numbers and more in a narrative form.
A Country of Two Agricultures, by Wandile Sihlobo, is published by Tracey McDonald Publishers and is available in all major bookstores in South Africa. You can buy it online here.
The Kindle version of the book is here.
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by Wandile Sihlobo | Feb 22, 2025 | Agricultural Environment and Natural Resource
In the first two weeks of the month I drove across the various regions of SA visiting farmers and agribusinesses. Two aspects dominated the conversations I had.
First, there is growing discomfort about the rise of misinformation over the Expropriation Act in SA. Farmers understand that property rights are intact and continue with their farming activities.
Worries that linger due to misinformation are the possible exclusion of SA from the African Growth & Opportunity Act (Agoa) at the official review later this year.
While SA’s agricultural exports to the US are small — about 4% of the overall agricultural exports of $13.2bn in 2023 — they are concentrated in a few industries (mainly citrus, wine, grapes, nuts and fruit juices). These industries have enjoyed duty-free access to the US market, making them price competitive.
Exclusion from Agoa would not mean being blocked from the US market, but an imposition of about 3% duties on SA products that would affect their price competitiveness. This uncertainty demands that SA work on a post-Agoa sustainable trade arrangement with the US.
There is a need for SA to continue opening as many new export markets as possible. The focus is on retaining access to the EU, UK, Africa and various other regions of the world where SA products are established, and on promoting tariff-free access between the Brics countries (Brics is not a trade bloc).
Farmers and agribusiness recognise the risks of the unpredictable geopolitical and trade environment to SA’s export-orientated agricultural sector.
Beyond trade, agricultural production conditions in SA are promising. The sector is likely to improve in 225 after the harsh midsummer drought of 2024. However, the recovery may not be uniform across all regions. Some farmers will continue to face a financially challenging environment for some time, and crop production could only recover mildly in some areas.
In field crops farmers have managed to plant well in most regions, though the timing of the planting seems to differ vastly in some areas, partly due to the erratic rains at the start of the season.
However, regional dynamics present some nuances. While the crop fields are visibly green and in good condition, some regions were strained by the heat of November to the beginning of December 2024. In such regions, while the crop has recovered from the recent rains, it is not in its usual health state for this stage of the season.
I noticed this mainly around the small towns of the eastern Free State. I suspect the North West, the western regions of Mpumalanga and the northern parts of Limpopo may have similar experiences.
Unlike the northern and central regions of SA that had these challenging weather conditions, the far eastern areas of the country had better rains. This has benefited the sugar cane and general production prospects of the sugar industry.
The rains also improved dam levels, further supporting the production of fruits and vegetables under irrigation, and even the irrigated veld for the dairy industry. Market prices for fruit farmers look promising, and with eased delays at the SA ports so far, the sector is also likely to benefit from increased exports.
For vegetable farmers, the recent removal of the export ban on SA vegetables in Botswana will also help this year from a demand perspective.
Meat producers and dairy farmers have endured higher feed costs, moderate milk prices and animal diseases. Therefore, improving the grazing veld due to better rains and controlling the spread of animal diseases will improve production conditions this year.
Ultimately, SA’s agriculture is likely to experience a mixed and slow recovery in 2025. The erratic rains and the season’s late start are some challenges. Fortunately, the rainfall outlook to March is optimistic and will support crops, fruits and grazing veld.
Beyond production, the sector must also battle dangerous misinformation from a trade perspective.
Written for and first published in the Business Day.
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by Wandile Sihlobo | Feb 20, 2025 | Agricultural Production
I know a lot is happening in politics and international trade that has implications for South Africa’s agriculture. But I want to take a moment away from that and comment on the recent rains, which have been superb for agriculture and have improved farming conditions.
You see, while I have consistently maintained an optimistic view that this will be a recovery year for South Africa’s agriculture following a year of El Nino-induced drought, the summer grains and oilseeds in the country’s western regions were starting to be strained a bit because of the scant rains. This week’s rains will help improve crop-growing conditions in such areas.
I am also gathering views from our friends at Grain South Africa, among other folks we talk to, who support this optimistic viewpoint.
We are recovering in agriculture, and farmers planted a decent amount of summer grains and oilseeds for the 2024-25 season. For example, the preliminary planting data released by the Crop Estimates Committee last month showed that South African farmers likely planted 4.45 million hectares of summer grains and oilseeds in the 2024-25 season, up slightly by 0.3% from the previous season.
In more detail, the data show that South Africa’s 2024-25 maize preliminary plantings were 2.64 million hectares, up by 0.4% year over year (y/y).
Moreover, sunflower seed preliminary plantings are 552 000 hectares (up 4% y/y), with groundnuts at 46 175 hectares (up 12% y/y) and dry beans at 45 500 hectares (up 15% y/y).
Meanwhile, the soybean preliminary plantings are at 1,12 million hectares (down 2% y/y), and sorghum at 39 500 hectares (down 6% y/y).
Some of these plantings likely happen outside the typical optimal window because of some regions’ unfavourable weather conditions at the start of the season. In such areas, there will be a need for better rains through to March, when the crops will likely pollinate. Notably, the recent rains helped with the early stages of crop growth.
Encouragingly, the La Niña prospects suggest we may receive favourable rains during this period.
Of course, not all things are as glowing; there may be regions where the rains could have done some minor damage to crops, although I haven’t heard of any. Still, it remains true that rain does more good than bad in agriculture.
While I highlight the growing conditions in the summer grains and oilseeds regions, these rains also benefit the livestock industry’s grazing veld. In the current times, where feed prices remain elevated, better grazing conditions provide some relief to commercial farmers and greatly benefit smallholder non-commercial farmers.
The dam level improvement also supports the production of fruit and vegetable crops primarily under irrigation.
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by Wandile Sihlobo | Feb 16, 2025 | Africa Focus
Nobel laureate Paul Krugman popularized the term “zombie idea,” which is also the title of his new book, Arguing with Zombies. This term refers to “ideas that keep being killed by evidence but shambles relentlessly forward, essentially because they suit a political agenda”.
One such “zombie idea” in African agriculture is the view that Zimbabwe was a breadbasket of the continent. I keep hearing this from various corners (and here from the late President Robert Mugabe, and lately on X), although evidence shows Zimbabwe was never a breadbasket.
Fellow agricultural economist Sifiso Ntombela and I found in an Africa Check essay in 2017 aimed at assessing whether Zimbabwe was ever a bread basket for Africa that it was not.
However, we found that Zimbabwe was a self-sufficient food producer until its land reform programme was instituted.
In our view, a country should be able to meet its staple food consumption needs and simultaneously command a notable share in exports of the same food commodity to be considered a “bread basket”.
An examination of the production data from the UN Food and Agriculture Organization for key staple foods—maize and wheat—shows that Zimbabwe’s production of these commodities never exceeded a 10% contribution to Africa’s output over the past 55 years.
In the two decades before Mugabe’s leadership (1960–80), Zimbabwe contributed an average of 6% of Africa’s maize production—almost on par with Nigeria’s contribution but lower than Kenya’s contribution of 7%.
During that period, the country’s maize production outpaced consumption by an average of 400,000 tonnes a year, making it a net exporter.
During the first half of Mugabe’s rule (1980-2000), the country’s maize production contributed a share of 5% to Africa’s output. While it was a net importer in most years, on average, the country remained a net exporter of maize, with a declining maize trade balance. This decline, and the country’s trade balance, worsened following the introduction of Zimbabwe’s fast-track land reform programme in 2001.
The country’s share of maize production on the continent then dwindled to an average of 2%. During this period, its maize consumption outpaced production by an average of 550,000 tonnes per annum — turning it into a net importer. The trend is similar for wheat and other major grain commodities as a contribution to Africa’s food system.
Fails to fit the idea of the food basket
The available data covers three distinct phases in Zimbabwe’s agricultural sector and suggests that the country was self-sufficient before and in the two decades after Mugabe came to power.
Even then, Zimbabwe’s maize and wheat output was generally modest and volatile. It wasn’t sufficient to support strong exports to the rest of the continent and world, which failed to fit the idea of a food basket.
In the third phase, the country’s maize and wheat production significantly declined, weakening Zimbabwe’s standing in the continent’s food system.
Overall, we view Zimbabwe as a self-sufficient food producer before its fast-track land reform programme.
However, limited evidence supports the notion that Zimbabwe has ever been “the breadbasket of Africa.”
So, this is just a Zombie Idea.
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by Wandile Sihlobo | Feb 14, 2025 | Agricultural Production
Since I have been writing about the higher maize prices and possible upside risks to consumer food price inflation, I thought it is important to highlight that we have been observing a price retreat since last week.
When the market closed today, February 14, 2025, South Africa’s white maize spot price was R5 559 per tonne, well below the R6 700 per tonne mark we saw at the start of January 2025. However, it is still up 30% from a year ago.
The yellow maize price is R4 940 per tonne, down from R5 110 per tonne at the start of January 2025. Still, this was up by roughly 30% from the same period in 2024.
The tight maize supplies underpinned the generally high prices over the past few months. South Africa was hard hit by the mid-summer drought in the 2023-24 season, leading to a 21% decline in maize production to 12,9 million tonnes.
The Southern Africa region was also hit hard, with Zimbabwe losing 60% of its maize crop, Zambia’s maize harvest down 50%, and significant crop losses across the region. This led to a strong demand for maize, and South Africa remained one of the significant maize suppliers to Southern Africa.
South Africa’s poor maize harvest of 12.9 million tonnes was supplemented by better stocks of about 2.4 million tonnes, enabling the country to remain a net exporter.
Between May 2024 and the end of January 2025, South Africa exported 1.80 million tonnes out of the expected 1.90 million tonnes (down from 3.44 million tonnes in the 2023-24 marketing year because of the mid-summer drought).
In essence, the primary price drivers in recent months were the poor domestic maize harvest of the 2023-24 season, strong regional demand for maize, and uncertainty about the new 24-25 season outlook.
So, what changed in these past few weeks?
The focus is shifting to the new 2024-25 season, and the crop is generally in good condition across South Africa.
Broadly, the farmers have managed to plant well in most regions, although the timing of the planting seems to differ vastly in some areas, partly because of the erratic rains at the start of the season. The crop conditions are favourable.
South Africa’s 2024-25 maize preliminary plantings were 2.64 million hectares, up 0.4% year over year (y/y). White maize was 1.59 million hectares (up 3% y/y), and yellow maize was 1,05 million hectares (down 3% y/y).
Admittedly, while the crop fields are visibly green and in good condition, the heat of November to early December 2024 strained some regions.
While the crop has recovered from the recent rains in such areas, it is not in its usual health state for this season, especially in the various small towns in the eastern Free State. We suspect that the Nort West, the western regions of Mpumalanga and the northern parts of Limpopo may have similar experiences. These areas saw erratic and late rains.
Still, the overall view of the maize crop and the general agricultural conditions is far better than that of the past season.
Therefore, optimism about the season ahead and favourable rainfall forecasts through March are the key drivers of the market’s price decline. We also see some selling pressure, which further moderates this price decline.
Of course, this isn’t ideal for maize farmers, especially since they are planted with relatively higher input costs. But the fact that prices remain well above last year’s levels provides a cushion.
The current price trend bodes well for the consumer regarding food inflation dynamics. And yes, there is a lag between farmgate prices and what we ultimately see at the retail level.
So, the moderation in maize prices shouldn’t lead to people looking for a quick price decline. Other costs in the value chain are associated with processing, packaging, and distribution.
Ultimately, suppose the weather conditions remain favourable through March, and there is no frost. In that case, South Africa may likely see a recovery in grain production and a generally better agricultural season.
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by Wandile Sihlobo | Feb 13, 2025 | Agricultural Production
As much as I like boasting about South Africa’s agricultural production and exports, there are particular commodities I pay close attention to which we import in large volume. One such commodity is wheat.
In one of my previous posts, I stated that South Africa imports roughly half of its annual wheat consumption; thus, it is always essential to pay close attention to global wheat production dynamics.
It is comforting that the International Grains Council maintained the 2024-25 global wheat production forecast at 796 million tonnes, slightly up from the previous year.
Australia, Canada, Kazakhstan, the US, China, and India are the key countries that boosted the harvest this year, while other large producers in the EU and Black Sea expect a slight decline in production.
With global wheat consumption set to remain moderate, we can expect the global wheat stocks also to be stable in 2024-25. This means the prices may move sideways to moderate in the near to medium term.
This promising global wheat production outlook is in an environment where South Africa’s wheat production has not been ideal. Farmers have just completed the 2024-25 harvest, and most provinces had poor yields.
South Africa’s 2024-25 wheat production is forecast at 1,92 million tonnes, down by 6% from the 2023-24 production season.
The farmers have delivered much of the crop to the commercial silos. For example, the wheat producer deliveries for the first 19 weeks of the 2024-25 marketing year stand at 1,76 million tonnes as of February 7. This is closer to the expected overall harvest of 1,92 million tonnes.
Wheat production has declined across the other provinces except for the Northern Cape, North West, and Gauteng.
For example, the Western Cape, a major wheat producer, saw a 1% drop in its wheat harvest to 1.07 million tonnes. This is mainly due to poor yields in regions that suffered from excessive rains, not the decline in area plantings.
The area planted was reduced in other major producing provinces, such as the Free State and Limpopo. The relatively lower wheat prices at the start of the season may have been one factor in the decision to slash plantings.
However, the Free State and Limpopo face challenges beyond the prices. In 2024, these provinces experienced a severe mid-summer drought, which led to significant summer grain losses. When the winter wheat season started in May, farmers were downbeat and worried about soil moisture.
Others may have wanted to conserve soil moisture for the new summer crop season. Thus, we saw lower plantings and relatively lower expected yields in some areas. These challenges have contributed to the 6% expected national decline in the 2024-25 South African winter wheat harvest.
In a season like this, with a reasonably expected lower harvest, one would assume that imports would increase, especially as South Africa’s consumption of wheat and wheat products remains strong.
However, the latest South African Grain and Oilseeds Supply and Demand Estimates Committee estimates suggest that 2024-25 wheat imports may fall 6% to 1,82 million tonnes. This is closely aligned with the five-year average of wheat imports to South Africa.
The major reason for an expected decline in imports is that we have ample supplies, thanks to the higher opening stocks, supplemented by the ample imports in the past season.
One could argue that South African importers took advantage of the relatively better prices of global wheat imports in the past few months to build supplies for this new season.
Overall, the 2024-25 season imports will likely account for 47% of South Africa’s annual wheat consumption. Sourcing imports should not be a challenge, as there are sizeable global wheat supplies.
In such an environment, the major risk is the domestic currency. If it remains strong and stable, as it has in recent times, then the wheat price path ahead remains positive for consumers.
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by Wandile Sihlobo | Feb 12, 2025 | Food Security
I noticed some headlines about “falling world food prices” and thought I should comment. These articles do not necessarily refer to “retail food prices”; they are primarily about agricultural commodity prices, measured in the FAO’s “global food price index.”
So why do I care about all of this? I care because when people read about “falling global food prices” and do not see them at their local retailers, they start thinking someone is taking chances and blame retailers.
So, we must stress that these are global agricultural commodity prices. These commodities must first be processed and distributed, among other things, which adds costs.
Also, we don’t all shop at one big global retail, so things differ from country to country, region by region, and so on.
So this is what happened — last week, the FAO released its global Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, for January 2025.
The index was at 125 points, down 2% from the previous month and 22% below its peak in March 2022. This peak occurred after Russia invaded Ukraine, and there was heightened uncertainty in the grain markets.
The mild monthly easing in prices was not widespread but only in a few commodities: sugar, vegetable oils, and meat. This is broadly due to slowing demand after the festive season and promising production prospects for vegetable oils.
For fellow South Africans, we must continuously monitor these global developments as we are interlinked to the world agricultural markets.
However, our key import commodities are wheat, rice, and some vegetable oils. Due to ample supplies, the prices of these commodities are moderating, which benefits importers like South Africa. This is a welcome development and bodes well with the generally moderate food price inflation in South Africa.
As a reminder, South Africa ended 2024 with lower consumer food price inflation, at 1,7% in December 2024.
Again, this broad post isn’t about inflation per se, but an emphasis that this “global food price” story mainly refers to agricultural commodity prices, which have a leg before they show at the retail level.
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