By Sakhumzi May
There have been two pressing issues in South Africa’s agriculture that calls for our thoughtful consideration.
First, the recent African Growth and Opportunity Act (Agoa) Forum has captured the spotlight, and as an industry, it’s important to reflect on the trade agreement and what it signifies for our industry. Second, the persistent challenge of bird flu has been a prevailing concern.
Although there are indications of progress, the situation remains volatile as the number of cases reported remains high, and the expectation is that the interventions that are being made at the industry level and in the government will result in the industry operating at capacity.
Agoa has been a game-changer for South African agriculture, and its success is not only important but essential for our farming community.
The legislation substantially improves market entry into the US for eligible sub-Saharan African nations. It opens opportunities for duty-free access to the US market.
Maintaining Agoa status is, therefore, essential as it enhances South Africa’s competitiveness and strengthens its position in the global marketplace. The country’s agricultural exports to the US have seen a consistent presence over the years, with export values amounting to 4.2% of the country’s total agricultural exports to the world in 2022.
The US ranks as the eighth largest market for South African agriculture. This signifies that the US market is a substantial destination for South African agricultural products. Despite its percentage of total exports being in the single digits, the US remains a strategic market for South Africa. The US market offers opportunities for high-value agricultural products, including nuts, citrus, wine, grapes, dried fruits, and fruit and vegetable juice. The products are vital contributors to South Africa’s agricultural export profile.
The preferential access is a vital channel for South African agricultural products to enter the US market with favourable trade terms, benefiting South African farmers and the broader agricultural sector. It contributes to economic growth and bolsters South Africa’s global trade position. In essence, the continuation of South Africa’s involvement in Agoa is a crucial factor in sustaining and expanding its agricultural exports to the US.
The trade relationship has provided a platform for South African farmers to access a highly valued market and maintain their competitive edge in the global arena. The geopolitical issues have raised questions about the country’s eligibility for Agoa, particularly due to its neutral stance on the Russia-Ukraine conflict. The decision to renew or not renew the Agoa ultimately lies with Congress. As of now, there is no indication that South Africa will be excluded.
South Africa continues to grapple with persistent animal disease issues. The poultry industry, in particular, has been facing a myriad problems, some of which pre-date the recent bird flu outbreaks.
The issues range from cost pressures to operational disruptions caused by power outages, affecting not only the profitability of poultry companies but also the industry’s stability and the affordability of poultry products for consumers. With the threat of avian influenza present, it is hoped that new hens will enter the market within about 18 weeks, alleviating supply constraints. The infection rate has, fortunately, decreased significantly in recent weeks.
In addition to avian diseases, the Department of Agriculture, Land Reform, and Rural Development expressed concerns about a potential foot and mouth disease outbreak in cattle in the Ngaka Modiri Molema District Municipality in North West. At this point, this is merely a suspicion based on initial serological findings. The situation serves as a stark reminder of the challenge of animal diseases in the country.
It highlights the enduring biosecurity issues that have long been a concern for South Africa’s livestock industry. The struggle to protect the nation’s livestock from disease outbreaks is a continuous effort, requiring vigilant measures and strong biosecurity protocols to safeguard agricultural assets.
Sakhumzi May is the acting executive manager of agricultural economics and advisory at Land and Agricultural Development Bank of South Africa.