JOHN STEENHUISEN: Agoa exit would be a bitter harvest for SA’s citrus industry

The SA citrus industry stands at a precipice. If US President Donald Trump decides not to renew the African Growth & Opportunity Act (Agoa), the ramifications for our nation’s agricultural sector — particularly our thriving citrus exports — would be devastating. 

For more than two decades Agoa has been a pillar of SA’s trade with the US, granting duty-free access to a range of agricultural products, including citrus. SA is the second-largest exporter of citrus globally and the US is a crucial market. According to the Citrus Growers Association of Southern Africa, under Agoa SA citrus exports to the US totalled more than 102,000 tonnes last year, which equates to 6.8-million 15kg cartons with a total value of R1.7bn.

The total tariff penalty on our exports would have been a R35m without Agoa. The elimination of Agoa privileges would upend this economic lifeline and risk thousands of jobs across the agricultural value chain.

Under Agoa, SA citrus enters the US market tariff-free. If the agreement is not renewed our citrus exports would be subjected to an average tariff of 1.53%. At first glance this might seem minor, but in an industry with tight profit margins such costs are often passed down to farmers and workers, jeopardising livelihoods. 

Moreover, SA competes against citrus exporters such as Spain, Morocco and Egypt, which enjoy trade agreements with the US. Losing Agoa would place SA at a disadvantage, making our products less competitive. The Citrus Growers Association has already raised the alarm that without Agoa our market share in the US would shrink, leading to financial strain on farmers and exporters. 

SA’s agricultural sector is deeply interconnected, with each link in the value chain reliant on sustained exports. A decline in citrus exports would lead to reduced demand for farm inputs such as fertiliser, pesticides and equipment, negatively affecting suppliers. Moreover, citrus farms employ thousands of seasonal labourers, many of whom would face job insecurity or wage reductions if export volumes drop. 

Logistics providers, including transport companies and cold storage operators, would also be affected, as citrus exports constitute a big portion of perishable shipments. Ports such as Durban and Cape Town, which handle large volumes of fruit exports, would see reduced activity, leading to financial losses and possible job cuts in associated industries. 

With fewer exports, packaging facilities that produce cartons, crates and labelling materials for citrus exports would experience declining revenues, compounding the economic impact. In addition, SA’s reputation as a reliable citrus supplier could suffer if logistical inefficiencies arise due to sudden shifts in export patterns. This would make it harder for producers to regain lost market share even if alternative trade agreements are negotiated in future. 

The impact of Agoa’s termination will not be limited to trade statistics. Agriculture remains a labour-intensive sector, employing about 935,000 people in SA in the third quarter of 2024. The citrus industry alone supports about 250,000 jobs across its entire value chain, spanning farm labourers, transport and logistics workers, and packaging and export specialists. Many of these positions are concentrated in rural areas, where citrus farming remains a cornerstone of local economies.

As Agbiz’s Wandile Sihlobo has pointed out, the industry accounts for more than 100,000 jobs in rural SA. These jobs provide critical employment opportunities, especially in regions where alternative job prospects are limited. Furthermore, the sector has seen consistent growth in recent years, with increased production volumes leading to expansion in downstream industries such as processing, marketing and distribution.

Losing Agoa would create a domino effect: fewer exports lead to decreased demand, lower production and, ultimately, job losses. The knock-on effects would also extend to investment in the sector. SA’s participation in Agoa has encouraged foreign direct investment in agriculture, particularly in citrus farming infrastructure. If the US market becomes less accessible, investors may redirect funds elsewhere, undermining the sector’s long-term growth potential. 

Exports such as nuts, wine, processed fruits and wool enjoy tariff-free access to the US market, a privilege that has made them competitive globally. With the imposition of tariffs these industries will struggle to maintain their foothold, leading to revenue losses across the sector. 

The Western Cape, a hub for agricultural exports, is particularly vulnerable. Wine and table grapes, which have seen steady growth in the US market, could face increased competition from European and South American producers. This would not only reduce export revenues but also affect employment and economic activity in rural farming communities.

SA’s processed food sector, which has expanded in recent years, is also at risk. Many fruit and nut processors depend on US demand, and a loss of Agoa could stifle investment in value-added agriculture, further limiting opportunities for job creation and growth. 

While the US market is crucial, SA must accelerate efforts to diversify its citrus export destinations. Growth opportunities exist in Asia, particularly in China and India, where demand is rising due to increasing health-conscious consumer trends. Strengthening trade agreements with the EU and expanding market access in the Middle East would also help offset potential losses from the US.

In addition, improving cold storage logistics and supply chain efficiencies will make SA citrus more competitive in these alternative markets. However, SA faces infrastructure challenges, including unreliable rail transport, inefficient port operations and ageing cold storage facilities. The country’s freight rail system, crucial for transporting citrus from inland farms to ports, has suffered from operational inefficiencies and frequent disruptions, leading to costly delays. Investment in modernising rail logistics and upgrading port facilities, particularly in Durban and Cape Town, will be critical to ensuring citrus exports reach global markets swiftly and in top condition. 

SA is not alone in facing trade challenges in the global citrus market. A relevant comparison can be drawn with Argentina, another developing citrus exporter that does not benefit from a free trade agreement with the US. Like SA, Argentina exports large volumes of citrus, particularly lemons and oranges, and faces trade barriers when entering the US market. Instead of relying on tariff-free access, Argentina has focused on strengthening phytosanitary protocols, securing niche markets in Asia and the Middle East, and investing in logistics infrastructure to remain competitive.

SA must take lessons from Argentina’s strategy by enhancing its market diversification efforts, improving compliance with international quality standards, and addressing logistical inefficiencies to maintain its global competitiveness. Considering these far-reaching implications, I urge all stakeholders — government, industry and our US counterparts — to prioritise Agoa’s renewal. Our citrus industry cannot easily absorb a disruption of this magnitude. 

However, if Agoa is not renewed SA must seize the opportunity to accelerate the diversification of its citrus export markets. Our citrus industry has already made inroads into Asia, particularly China and India. In addition, strengthening trade ties with the EU and Gulf nations offers promising alternatives. The government and industry must work together to streamline export processes, reduce logistical bottlenecks and promote SA citrus as a premium global product.

Replacing the US as a trading partner will not be easy, nor will it happen overnight. By embracing innovation, enhancing trade partnerships and investing in infrastructure, we can ensure that SA citrus remains a dominant player in the global market. The challenges ahead are significant, but with proactive strategies and a commitment to market expansion our citrus industry can thrive beyond Agoa.

SA’s citrus industry is one of our greatest success stories. We must ensure it continues to flourish, not wither under the weight of lost opportunities. 

• Steenhuisen is DA leader and agriculture minister.