SA agricultural stakeholders want to increase exports to the Brics (Brazil, Russia, India, China, SA) bloc of countries. This message came out sharply during a hybrid event of the Agricultural Business Chamber of SA (Agbiz) with members, commodity organisations and government representatives on March 19.
The event’s primary focus was to explore how SA’s agriculture and agribusiness sectors could gain more traction within Brics. This theme is premised on the observation that SA’s agricultural sector is expanding and is ripe to contest more international markets.
In the next few years the sector could enjoy a growth spurt, especially if government policies, including the master plan on agriculture and agro-processing, come into play. To get a sense of how SA’s agricultural sector has expanded in the past decade, consider the sector’s production volume since 2010, which has grown 19%. Notably, the Bureau for Food and Agricultural Policy’s long-term projections also present an optimistic picture of output growth through to 2030. The key message here is that SA agriculture is growing, and export markets should be diversified and expanded to accommodate volumes.
Bolstering the proposal for export market expansion is that some of the outputs have already surpassed targets set out in the National Development Plan (NDP) in 2012. These include citrus, macadamias, dairy and pork. Others, such as soya beans, avocados, apples and table grapes are fast approaching the targets. This added production and expected growth in other major crops, fruits, vegetables and livestock need new and growing markets. The sector should be looking more at the Brics countries and hone a Brics strategy complemented by robust bilateral engagements with each of the countries.
I’ve recently noted in this column that SA’s agricultural sector is highly orientated towards exports, which account for roughly half of production in value terms, about $10.2bn in 2020. Just last week colleagues from the SA citrus industry announced that the sector is likely to break all previous seasonal records for exports with an estimated 158.7-million cartons in 2021. If the estimate is reached it will represent a third consecutive season of record export volumes, with 130-million cartons exported in 2019, followed by 146-million cartons in 2020. Moreover, industry estimates indicate that available citrus for export could increase by 300,000 tonnes over the next three years.
The expected growth in agriculture and export markets calls for increased attention to logistical efficiencies at the ports. SA has already achieved some efficiency gains. The industry has been working with the government and other stakeholders, such as Transnet, to smooth the ports’ flow. Work continues at Transnet to decongest the Durban port. Such multistakeholder co-operation has been vital in enabling higher export volumes during the pandemic, and led to SA recording the mentioned record exports by value.
Back to the Brics: the most attractive markets in the grouping are China and India. They account for sizeable agricultural import volumes, have growing populations, fast-growing economies, and changing consumer tastes. SA policymakers’ engagements with their Brics counterparts should be aimed at lowering tariffs for certain agricultural products and tackling nontariff barriers.
Consider the wine trade with China — the likes of Australia and Chile have accessed the Chinese market at 0% preferential tariffs. Meanwhile, SA producers face 14% import tariffs. It has therefore been a challenging market for wine and a range of other agricultural products.
It is also crucial that the industry pay closer attention to geopolitical developments in this region. China has sanctioned Australia for criticising some of its policy positions. These sanctions include trade restrictions that have allowed other countries to take advantage of the situation and meet China’s import demand.
• Wandile Sihlobo is Agbiz chief economist and author of ‘Finding Common Ground: Land, Equity, and Agriculture’. He is a visiting research fellow at the Wits School of Governance.
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