SA must protect its agricultural sector
JOHANNESBURG - - The agricultural sector is feeling the effects of the pandemic on multiple fronts. The obvious and most glaring impact is on exports.
This follows the declaration of Covid-19 as a global pandemic and a national disaster in South Africa, the country has escalated its response to this scourge as President Cyril Ramaphosa on Monday announced a national lockdown with effect from Thursday until April 16.
It is common knowledge that the Covid-19 is adversely affecting economies the world-over and South Africa is no exception.
South Africa, like in many other countries, has experienced panic buying and the consequent shortage of certain food and other essential grocery items as consumers continue to stockpile supplies in response to the pandemic and the now imminent lockdown.
The early and longer closure of schools also presents a problem for farmers and other agri-food players who supply bulk food products to the schools feeding programme. This does not only present a problem for the supplier, but also a food security challenge for a number of learners in rural and township schools who normally get their sustenance at school.
The longer this situation goes and the more countries affected, the larger the challenge for the industry to deliver food and fibre to consumers.
The lockdown, although necessary and justified, will cause extreme hardship in many sectors of the economy, including the agri-food sector. The advent of the Covid-19 epidemic has added insult to injury to the local agri-food sector given that the sector has just come out of a Foot and Mouth Disease outbreak that decimated the livestock sector from
December 2019 to the earlier parts of 2020.
The Foot and Mouth Disease outbreak cost the economy in excess of R10 billion in foregone export earnings due to an international ban on South African meat and animal products exports as revealed in a study jointly undertaken by the Agricultural Research Council and the National Agricultural Marketing Council.
As a caveat, the food supply chain is an essential sector of the South African economy and vital to the success of any cogent plan to combat the Covid-19 pandemic. Without sufficient food supply, it would be virtually impossible to enforce the lockdown.
Against the background provided thus far, South Africa needs to do everything in its power to prevent agricultural disruption in the wake of the pandemic and the lockdown.
Although the agri-food value chains in South Africa are well developed and integrated, they are not fool proof. Because of the well-integrated nature, a failure of one or more of the stages could derail the entire value chain thus the South African agri-food value chains is as strong as its weakest link.
Furthermore, the availability of and access to food and associated products is of paramount importance in times like this when production of food grinds to almost a standstill as a shortage of workers is a reality during lockdown.
The difficulty of ensuring the proper functioning of logistics such as transport for goods and people and other complications further compounds the problem presented by the limited availability of workers for the agricultural sector.
As the pandemic continues and the lockdown begins to take effect, we are likely to see the demand for perishables declining as bulk demand slows down.
However, it is likely that there will be more demand for fresh produce such as vegetables and fruits, that have a longer shelf life such as potatoes, onions, butternuts and sweet potato.
The problem of supply exceeding demand will persist in the short-run as farmers are unable to sell their produce through their normal and preferred outlets due to the restrictions imposed by the lockdown and restricted gatherings.
For example, as early as last Saturday, a number of farmers’ markets were closed because they could not obtain the necessary trading permits to trade. This closure of markets resulted in farmers not being able to sell their produce thus having to source alternative avenues to market their goods or sell them at below cost due to the perishable nature of the produce.
It is not enough to recognise the impact of the Covid-19 pandemic on the South African economy, particularly the agricultural sector, without providing a conducive environment within which the sector can rebound in the aftermath of the disaster.
Both the public and private sectors can explore several policy options in order to engender a resilient future agricultural sector.
One of these options is the provision of a financial stimulus in the form of financial assistance to the sector.
This could take the form of restructuring loans and giving farmers repayment breaks during this period and immediately after as a cushion. The public sector could also look at setting up a disaster relief fund to compensate farmers for lost revenue because of the pandemic and unintended consequences of the measured the disaster mitigation interventions. Another option would be for the state and other relief organisations to buy food in bulk from the sector for distribution to vulnerable groups, including schoolchildren, during the lockdown.
Dr Thulasizwe Mkhabela is an agricultural economist and is currently the group executive: Impact & Partnerships at the Agricultural Research Council; [email protected]