Bumper maize harvest

Bumper maize harvest

With summer crop harvest underway across South Africa, the recent production estimates are more reliable and reflect the large yields farmers continue to reap.

Hence, we were unsurprised this afternoon when South Africa’s Crop Estimates Committee lifted the country’s 2022/23 maize production estimate by 1% from last month to 16,35 million tonnes. This crop is 6% more than the 2021/22 season and the second-largest harvest on record.

The expected ample harvest is primarily on the back of large yields, as the area planted is slightly down from the 2021/22 season. About 8,64 million tonnes is white maize, with 7,71 million tonnes being yellow maize.

A crop of 16,35 million tonnes implies South Africa will have sufficient supplies to meet domestic maize needs of roughly 11,40 million tonnes and have over 3,00 million tonnes for export markets in the 2023/24 marketing year.

The soybeans harvest was unchanged from May’s record estimate of 2,76 million tonnes (up 24% y/y). The annual crop improvement is due to an expansion in the area planted and higher yields. The ample soybeans harvest means South Africa could meet its domestic demand and remain with over 300 000 tonnes of soybeans for export markets.

This soybean export expansion is a new territory for South Africa, which until recently, had been a net importer of soybeans and soybean products, and positive for the agricultural trade balance.

However, the sunflower seed production estimate was lowered by 5% from last month at 758 610 tonnes (down 10% y/y). The annual decline in the sunflower seed production forecast mirrors the reduced planted area and yields in some areas.

Sorghum production estimate is down 1% from last month and now estimated at 103 870  tonnes (up 1% y/y). Other small crops, such as groundnuts and dry beans, were left unchanged from last month at 51 510 tonnes (up 6% y/y) and 48 560 tonnes (down 8% y/y), respectively.

Overall, South Africa has big summer grain and oilseed harvest, and the recent rains did not cause quality issues as some may have feared.

From a grains consumer perspective, these data bode well with the already softening maize and oilseed prices and reinforce our view of a possible moderation in grains-related food product prices in the food inflation basket.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Zimbabwe’s maize imports could rise markedly in the 2023/24 marketing year

Zimbabwe’s maize imports could rise markedly in the 2023/24 marketing year

From a maize supply perspective, South Africa is in a relatively strong position. According to recent estimates by the Crop Estimates Committee, the country’s 2022/23 commercial maize production could reach 16,1 million tonnes, up 5% year-on-year and the third largest on record.

Given South Africa’s annual maize needs are roughly 12 million tonnes; the country could have over 3 million tonnes for export markets in the 2023/24 marketing year that started in May (this marketing year corresponds with the 2022/23 production year).

This ample harvest materialized through farmers’ persistent efforts to plant even beyond the optimal planting window, which closed in December before the entire area of 2,6 million hectares was planted as heavy rainfall disrupted farmers’ activity.

Thus, farmers planted some hectares outside this window, and some feared there would be poor yields and frost risks later in the season. Fortunately, the worst did not materialize, and South Africa expects an ample maize harvest.

However, neighbouring Zimbabwe was not as fortunate as South Africa. Initially, Zimbabwe’s 2022/23 maize production season had a better start than South Africa’s. The favourable rainfall from October to November allowed farmers to till the land and start planting.

But the season hit a dry spell in December, adversely affecting the maize crop in the southern and western areas of the country. Zimbabwe’s fortunes worsened when the country was hit by Cyclone Freddy in late January 2023, leading to crop damage.

Hence, Zimbabwe’s 2022/23 maize production could reach 1,5 million tonnes,  almost half of the ample harvest of 2,7 million tonnes in the 2020/21 production season, according to the latest estimates by the Pretoria Office of the United States Department of Agriculture (USDA).

With that said the expected harvest of 1,5 million tonnes is a mild improvement from the 2021/22 production season’s maize harvest of 1,4 million tonnes but 32% lower than the annual maize needs of 2,2 million tonnes. At face value, Zimbabwe might have to import about half a million tonnes to fulfil the yearly maize needs in the marketing year 2023/24.

It is also worth considering that the Zimbabwe Grain Marketing Board is mandated to maintain a minimum of half a million tonnes of strategic maize reserve in physical stocks. Therefore, Zimbabwe will likely require a million tonnes of imports in the 2023/24 marketing year.

Still, given the poor economic conditions in Zimbabwe, it is unclear at this stage if the Zimbabwe Grain Marketing Board will procure the half million tonnes strategic reserve in full within the 2023/24 marketing year. We will closely monitor the country’s maize import pace in the coming months, as it would lead to a substantial increase in regional maize demand.

Fortunately, South Africa’s 2023/24 marketing year maize surplus of over 3 million tonnes will help meet the potential rise in imports in Zimbabwe. While Zimbabwe could import a particular share of maize from Zambia, the country will likely rely more on South Africa.

In the previous season, when Zimbabwe was not prominent in South Africa’s maize markets, the country had decent stocks from the last good harvests and only required maize imports of about 220 000 tonnes in the 2022/23 marketing year, according to data from the USDA.

This also means there will likely be increased demand for South Africa’s maize towards the end of the year. South Africa also has established markets in the Far East and Europe, which have consistently remained active in the maize import business. This may spell good news for South African maize farmers and traders, but for grain users, the potential increased demand at the end of the year could add upside pressure on prices. Importantly, unlike Kenya, which prohibits the importation of genetically modified maize, Zimbabwe allows imports, which further opens room for South African grain exporters.

In addition to this solid regional maize demand, the added upside factor to maize prices at the end of the year into the new year will also be the uncertainty about the new season crop on the back of an expected El Niño event.

The uncertainty could be an issue, although we hope El Niño will have a mild impact on the 2023/24 production season because of better soil moisture on the back of four consecutive rainy seasons. With that said, the effect of the expected El Niño on Zimbabwe could again be severe as the country is not using similar farming inputs as South Africa regarding seeds and certain agrochemicals, and even the level of fertilizer use is lower. All these issues influence the yield level, especially in potentially drier seasons.

While Zimbabwe borders South Africa, its 2022/23 maize harvest turned out relatively poorer and thus leading to a higher dependency on its neighbour. Zimbabwe’s 2023/24 maize imports will likely reach levels that we last saw in 2016, but this time around, it may not be a struggle to secure supplies from South Africa and even Zambia.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

South Africa’s winter crops and horticulture fields are likely to be spared of dryness

South Africa’s winter crops and horticulture fields are likely to be spared of dryness

There is a generally held view that South Africa will likely transition into an El Niño state in the upcoming 2023/24 summer season. However, the intensity of it, its duration, and its impact on crop production remain uncertain.

Still, South Africa can be expected to have a smaller harvest compared with the past four years of consecutive ample harvests of field crops and horticulture. A critical factor to note is that the expected El Niño comes after four straight seasons of solid rainfall and good soil moisture.

Therefore, in the event of a weak El Niño state, the current soil moisture conditions could support crop conditions and ensure another reasonably decent harvest as in 2018/19, which was also an El Niño period. Notably, the season before 2018/19 was not even as favourably wet as the past four seasons.

We will have a much better view of the expected El Niño intensity in two to three months, which will also be closer to the summer crop planting. On June 2, 2023, the South African Weather Service (SAWS) noted that ” ENSO predictions during this time are less skilful than other times of the year” and that the “forecasts be monitored until we reach August/September, when ENSO forecasts have significantly higher skill levels.”

Positively, with all the fears about the prospects of the upcoming drought, the winter crop-growing regions across the country have received reasonably good moisture, which will support the crop. In fact, in some regions of the Western Cape, the rains were even more than necessary this past week, leading to the destruction of roads and infrastructure.

As the winter season continues, there is likely to be additional rainfall in the Western Cape and coastal regions, possibly not destructive as recent ones, all of which will be supportive of winter crops, wine grapes, and various horticulture. This is a view held by the SAWS. In its recent release, the weather bureau stated that “the multi-model rainfall forecast indicates above-normal rainfall for most of the country during winter (Jun-Jul-Aug) through to early-spring (Aug-Sep-Oct). This is still only relevant for the south-western parts of the country during winter but also for the eastern coastal areas during spring.”

This weather outlook reinforces our optimism about the South African 2023/24 winter crop season. At the end of April, the Crop Estimates Committee indicated that farmers intend to plant 542 600 hectares of wheat in the 2023/24 season, 3% up from the five-year average area planted (although down 4% y/y). We view such an area planted, combined with favourable weather conditions, as a catalyst for a solid harvest of around 2 million tonnes. We assumed an average yield of 3,75 tonnes per hectare, which is a possibility if the weather conditions remain favourable throughout the season, as the forecasts suggest.

Moreover, farmers intend to plant 109 100 hectares of barley, up 8% y/y (but below the five-year average planting). If we apply the same logic here of a five-year average yield of 3,38 tonnes per hectare in an area planting of 109 100 hectares, South Africa could have a barley crop of 368 758 tonnes in the 2023/24 season (up 19% y/y). The canola planting intentions are at 127 500 hectares, up by 3%, and a record area planting. Combined with an average yield of 1,71 tonnes per hectare, such an area suggests 218 025 tonnes of harvest this season, 4% higher than the previous year.

Still, the completion of planting activity in the intended area and weather conditions of the next two to three months are crucial in determining whether the intended area is successfully planted or even exceeded. We will have an update on the area plantings when the Crop Estimates Committee releases the preliminary area planted data on 26 July. The first actual production forecast will be released on 29 August. We generally hold a positive view of these expected data releases. Importantly, the broader horticulture subsector will also benefit from favourable weather conditions.

Overall, while there generally is some fear about the impact of the expected El Niño phenomenon on South Africa’s agriculture, the winter crops could be spared the dryness. Notably, the effect of the Niño on the 2023/24 season remains highly uncertain at this stage. A lot of it will depend on the intensity, which in our view, is not clear so far. It will be two to three months before we better understand the weather outlook and impact on the next season’s crop.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

There is no cause for alarm if South Africa has a drier summer

There is no cause for alarm if South Africa has a drier summer

Forecasts of an El Niño occurrence in the 2023/24 summer season do not necessarily equate to a bad agricultural season. The upcoming season of possible below-normal rainfall follows a rare consecutive four years of heavy rains that have improved soil moisture and natural grazing veld.

This means there is a natural cushion for agricultural activity even if the rains are below average (typically about 500mm) in SA this summer. However, it will be necessary for the rain that does fall to occur in critical periods, such as the seed germination and pollination stages of growth, which are essential for crop growing.

If this were to occur it would not be the first time SA was in such a fortunate position. The summer of 2018/19 was marked by an El Niño event, but there was rainfall at just the right times and SA ended up harvesting decent crops, with commercial maize at 11.2-million tonnes, soya beans at 1.2-million tonnes and sunflower seed at 678,000 tonnes.

Other field crops and horticulture also achieved good yields that year. Notably, the 2018/19 season was not preceded by a favourable four-year period of good rainfall that improved overall soil moisture. The current position is therefore better than the last El Niño period.

Various weather forecasters share the view in terms of the likelihood of the occurrence of an El Niño. In the past few months I have reflected in this column on forecasts by the SA Weather Service and Columbia University’s International Research Institute for Climate & Society, which all point to a higher probability of El Niño occurring towards the end of this year. The latter placed the odds at more than 80% at the start of June.

The Australian Bureau of Meteorology also put out a statement recently that the “outlook has been shifted to El Niño ALERT. This means that while the El Niño-Southern Oscillation (Enso) is now neutral, there is about a 70% chance of El Niño forming in 2023”. It said this is “roughly three times the normal chance of an El Niño”.

Under such conditions the agricultural sector and agribusinesses must plan for a changing operational environment from the conducive four years that supported growth in the sector. Still, this weather outlook should not necessarily imply less investment in agriculture or elevated risk.

Such trepidation is inevitable as people still remember the harsh drought of the 2015/16 production season, when maize output fell to 7.8-million tonnes and soya beans to 742,000 tonnes, while the sunflower seeds harvest, at 755,000 tonnes, was boosted by farmers switching white maize hectares to sunflower seed and cotton in the western regions of the country.

That season the livestock industry, various field crops and horticulture all suffered major losses. Importantly, the 2015/16 season was preceded by a drier production period in 2014/15, and soil moisture was low in various regions. The fall in yields was therefore unavoidable. Moreover, the years before were not exceptionally wet, and production conditions were generally challenging.

This means teams in the agricultural credit desks at various organisations that use the recent drought periods as a reference for what could transpire in the coming season would be misguided, and could result in a far more risk-averse approach than production conditions on the ground warrant.

The financiers and service providers in the sector could perhaps start to worry if we get another drought in the 2024/25 season. Such a scenario would then be on the back of a less wet season, and soil moisture reserves would have been depleted in 2023/24. But this is not in the forecasts at this point. The communication from all major weather forecasters has focused on the upcoming season.

Also worth noting is that farmers’ production methods have changed over the past few years with the adoption of no-till farming and other climate-friendly practices, which all aim to conserve soil moisture and support production.

Overall, the SA agricultural sector faces a slightly drier 2023/24 summer season. But this should not scare investors or financiers away.

Written for and first appeared on Business Day.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za 


Rand weakness and high global rice prices present near-term challenges for South African consumers

Rand weakness and high global rice prices present near-term challenges for South African consumers

If the weaker rand/dollar exchange rate persists, we could see noticeable upside pressure on the prices of imported food products. One such particular product is rice. The global prices of rice are already high, and South Africa imports all of its domestic requirements of this commodity.

From the 2021/22 marketing year (MY) to date, the global demand for rice has increased following a surge in the prices of other major grains, which has driven up global rice prices. In May 2022, rice from various origins, such as Thailand, Vietnam, India, and Pakistan, traded below US$400 per tonne. But in May 2023, except for India, these rice price origins traded at over US$500 per tonne.

Therefore, importing countries now face increasing pressure. South Africa imports roughly 1,1 million tonnes of rice annually, and 2023/24 MY’s volume is forecast to remain unchanged from the previous season. As such, the current global rice price trend and the rand/dollar exchange remain vital variables to monitor over the coming months.

Nonetheless, over the second half of this year, the prices of maize and wheat products are expected to continue to moderate. Hence, consumers may once again reduce their rice consumption and opt for more of the other grains, especially if rice prices remain elevated.

With that said, we still believe the global rice price increase should be temporary. The International Grains Council forecasts a 2% recovery in global rice production in 2023/24 MY to 521 million tonnes.

This recovery in rice production is expected across all key producing countries such as India, Vietnam, Thailand, the US, Pakistan, China, Indonesia, and the Philippines.

The production recovery will be due to anticipated favourable weather conditions and yield improvements. Rice ending stocks in the same season are also set to improve by 1% to 173 million tonnes, which should also drive the moderation in global rice prices towards the end of 2023 into 2024.

The anticipated recovery in rice availability and its price moderation going towards 2024 will benefit South African consumers, assuming that the rand/dollar exchange rate continues to improve from its record weaker levels.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

South Africa’s Agriculture and Agro-processing Master Plan needs a clear implementation process

South Africa’s Agriculture and Agro-processing Master Plan needs a clear implementation process

May 2023 marked a year since the Agriculture & Agro-processing Master Plan was completed and launched. It offers the government and the private sector a framework to grow the sector, build competitiveness, attract more investment, improve inclusion and create jobs.

This year should mark the start of the implementation phase. But progress remains limited, as the focus shifted to energy security at the beginning of the year due to intensified load-shedding. With various interventions such as load curtailment, the extension of diesel rebates, and the Agro-Energy Fund under implementation, the sector should refocus its attention on the master plan and explore means of implementation.

Admittedly, the operating environment in the sector is more challenging than when the plan was drafted. Still, neglecting or delaying implementation will only allow the challenges to worsen. Growth constraints such as biosecurity, infrastructure, widening of export markets, registration of new crop protection chemicals and various commodity-specific and regionalised plans are some of the aspects the Agriculture & Agro-processing Master Plan reflected on.

The broad sector support behind the plan could wane over time if implementation is slow, and we may again find ourselves with another plan that is good on paper but not implemented. Getting out of this state of inertia requires the department of agriculture, land reform & rural development to reconvene the social partners with an implementation proposal at hand.

The department has a few options to gain momentum. The meeting could start with the energy interventions made thus far to assist the sector and how these will be sustained going to the next season, which may be a drought one, with higher demand for irrigation. This is a crucial step as few businesses would commit to the expansions promised in the master plan with no clear sense of the sector energy strategy. Agriculture and agroprocessing are intensive energy users.

The next step would be to remind the sector how the existing blended finance initiative between the department and Land Bank will be broadened to other financing agencies to achieve the required scale to make progress in transforming the sector. This process has been in the works for a few years, and the department should iron out the areas in which there is no alignment yet and bring this in full stream.

The department should launch its Agricultural Development & Land Reform Agency, which came into the public view in 2021 and has been at various stages of refinement since then. It should outline the agency’s mandate and working plan for its first five years in collaboration with the private sector.

This will be a courageous step to get ahead of new entrant farmers’ questions about the need for land. It will also demonstrate that expansion in the agricultural sector will be primarily through “growing the agricultural pie” by bringing into full production underused land. Another vital step that will boldly separate the agency from other land redistribution instruments will be ensuring that new entrant farmers have land with title deeds or tradable long-term leases.

If the department fails to launch the agency sooner, the deliberations in implementing the master plan will always go back to land needs as a hindrance. Therefore, the government should unlock all of these possible stoppages before advocating for a comprehensive implementation of the master plan.

These implementation steps are vital for building trust in the sector, not only between the government and existing role players in agriculture but also other South Africans who aspire to join the sector and have followed these programmes from inception hoping for inclusion and economic opportunities.

The sector’s stakeholders will also be more appreciative of the seriousness of government programmes and policy if there is full-scale implementation of all these steps. There may be faults at the starting stages, which provides us with an opportunity to learn and improve policy and programme design along the way.

Written for and first appeared on Business Day.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

SA agriculture’s lousy performance in the first quarter is a temporary blip

SA agriculture’s lousy performance in the first quarter is a temporary blip

The data released by Statistics South Africa today show that in the first quarter of 2023, agriculture gross value added sharply contracted by -12,3% quarter-on-quarter (seasonally adjusted).

There are a few elements that explain this sharp contraction. First, the field crops had a tough start to the season because of excessive rains, which disrupted and delayed plantings by over a month in some areas.

Second, the cattle industry still feels the adverse effects of foot and mouth disease, leading to a decline in slaughtering activity. We see similar issues of animal disease challenges also in the pork industry.

Lastly, one can not underestimate the impact of load-shedding disruptions on poultry production. However, the government has since introduced various measures to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and, most recently, the launch of the Agro-Energy Fund.

Also worth noting is that South Africa’s agriculture quarterly gross value-added figures tend to be quite volatile; hence our communication always focuses on the annual performance.

Importantly, we expect the coming quarters in the sector to show a robust performance and boost the annual growth figure to around 3% (from a revised 0,9% in 2022).

While the summer crop season started on bad footing, and the planting of some crops was delayed by roughly a month, the weather conditions improved in January and allowed for the completion of the planting.

Moreover, the load-shedding interventions we mentioned above assisted some farming entities. However, the effectiveness of these energy support measures differs across farming enterprises, and the costs are high mainly for those not fully benefiting from the above efforts and have had to rely on diesel generators to maintain production.

Consequently, South Africa’s 2022/23 summer crops are in good shape. For example, the 2022/23 maize harvest is estimated at 16,1 million tonnes, 5% higher than the 2021/22 season’s harvest and the third-largest harvest on record.

Soybeans harvest could reach a record 2,8 million tonnes. Other field crops and fruits also show prospects for decent harvest this season. These good agricultural conditions will support the fortunes of the sector. However, the possible slow recovery in the livestock subsector, which accounts for nearly half of agriculture’s gross value added, remains a critical risk to this year’s performance.

From a policy position, the Agriculture and Agro-processing Master Plan launched in May 2022 remains an essential guiding pillar for the long-term growth of the sector. This plan offers the government and the private sector framework to grow the sector, build competitiveness, attract more investment, improve inclusion, and create jobs.

This year should mark the start of the implementation phase. But progress so far remains limited, as the focus shifted to energy security at the beginning of the year because of the intensified load-shedding. Still, the sector should now focus on the Agriculture and Agro-processing Masterplan and explore means of implementation.

The growth constraints such as biosecurity (animal diseases), infrastructure, widening of export markets, registration of new crop protection chemicals, and various commodity-specific and regionalized plans are some of the aspects that the Agriculture and Agro-processing Master Plan reflected on.

Notably, the broad sector support behind the plan could wane over time if the implementation is slow, and we may again find ourselves with another “good on paper but not implemented plan”. Getting out of this state of inertia requires the Department of Agriculture, Land Reform and Rural Development (DALRRD) to reconvene the social partners with an implementation proposal at hand to propose.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Farming in South Africa is being hobbled by power cuts and poor roads. Rural towns are being hit hardest

Farming in South Africa is being hobbled by power cuts and poor roads. Rural towns are being hit hardest

South Africa’s agriculture has had great consecutive seasons since 2019/20. The sector’s gross value added grew by 14.9% in 2020, 8.8% in 2021 and modestly by 0.3% in 2022 . This was primarily supported by favourable weather conditions.

The current season is also likely to deliver solid growth for the sector, with variation across sub-sectors. We already see prospects of large crops across the country.

Export performance is likely be robust, especially with a weaker rand exchange rate, which makes South African products more competitively priced in the global market.

Still, the sector is not reaching its full potential. A number of factors stand in the way of even greater successes and greater participation of black farmers in commercial value chains.

The first factor to mention is worsening power cuts. The agricultural sector is heavily reliant on energy. For example, recent work by the agriculture and food policy research group, the Bureau for Food and Agricultural Policy shows that roughly a third of South Africa’s farming income depends directly on irrigation, which requires power.

But that’s not the only challenge. Deteriorating roads, collapsing water infrastructure and rising crime are barriers to functioning effectively and efficiently.

These are not new issues. They have been flagged before. But they have worsened. They are a challenge for large commercial farmers as well as smaller farming enterprises. The emerging or new entrant black farmers, with limited financial resources, face it more acutely.

These challenges highlight the effects of weak governance across all spheres of government in South Africa. It is serious for all sectors, but particularly so for agriculture, which depends on the proper functioning of essentials such as roads, water and power.

Provincial governments and municipalities have not maintained or upgraded infrastructure that would support agriculture.

The results of this neglect, over time, are likely to lead to declining economic conditions and employment opportunities in small towns. Farming and agribusiness play a crucial role in sustaining the economies of small towns and rural areas. Paying attention to infrastructure could catalyse a virtual cycle in which the private sector increases investment, in turn leading to increased economic opportunities.

Roadblocks facing farmers

The impact that poor roads have on farmers is well illustrated by a recent case in the Eastern Cape province. Dairy farmers in the Ncorha area struggled to receive farm supplements, feeds and diesel because of the poor state of roads. And they couldn’t deliver their produce to the market.

Ncorha is a small region in the Chris Hani District Municipality in the Eastern Cape province of South Africa. One of its vital economic activities is farming, primarily the dairy industry. The Eastern Cape accounts for nearly a third of South Africa’s dairy production.

Poor infrastructure is not isolated to the Eastern Cape. Roads across the rural towns of the Free State, North West, Limpopo and KwaZulu-Natal, all of which are major agricultural provinces, are also poorly maintained and are in a bad condition.

More than two-thirds of South Africa’s agricultural produce is now transported by roads, as rail transport has faced challenges over the years. This is a major change from two decades ago when rail played an important role in transporting agricultural produce, specifically grains.

The poor road network has forced some farmers to pay for road maintenance. They have not been able to reap the full benefit of higher agricultural output because they’re incurring additional operating costs. Farmers have to step in when municipalities misuse funds allocated for infrastructure. Details of this have appeared in numerous Auditor General reports.

Water has often been flagged by various agribusinesses and farmers as another major problem. Key is the maintenance of water infrastructure such as dams and purification systems. Agribusinesses in some towns have had to step in and maintain water infrastructure. This again takes financial and human capital away from businesses to public service that municipalities should be covering.

Agribusinesses and farmers are also seeing a rise in corruption and crime. Commercial farming businesses have had to tighten security over the years at their own cost because of lawlessness in rural South Africa. Harvest and livestock theft affect all farmers and are much harder for new entrant farmers without a strong financial position to invest in security and technical solutions. Again, having to tighten security shifts resources from more productive uses to cover for the government’s shortcomings.

Why strong agricultural sector matters

South Africa faces a high unemployment rate at just under 33% in the first quarter of 2023. Rural areas tend to face the harsh effects of the poor economic conditions.

Resolving the unemployment crisis requires that all economic sectors perform optimally, especially the primary sectors with an ability to absorb even the least skilled labour. Agriculture is one such sector, while agribusiness and agro-processing also present a range of employment opportunities.

But all these hinge on effective provision of public services such as roads, water and electricity. In turn, these depend on strong provincial governments and municipalities.

The recently launched Agriculture and Agro-processing Master Plan presents practical steps for implementing Chapter Six of the National Development Plan, which outlined a vision for developing the agricultural sector further.

Weaknesses of the provincial government and municipalities are undermining the government’s plans to expand agricultural output and resolve inefficiencies within the Department of Agriculture, Land Reform and Rural Development.

These weaknesses are also hindering the economic vision for South Africa set out by President Cyril Ramaphosa.

Addressing local government failures should be a top priority for the presidency. Rural towns and communities support millions of people and are currently in despair.

Public-private sector partnerships can also be considered to help tackle some of these challenges. Models of how these can work are outlined in various master plans and need commitment and effective leadership.

Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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