WANDILE SIHLOBO: Agriculture must guard against geopolitical noise

The challenges that have constrained SA’s agricultural growth potential in the past few years remain. These include poorly functioning municipalities, deteriorating roads and rail, inefficiencies at the ports, the slow process of releasing government-owned land to beneficiaries with title deeds, higher crime levels and stock theft. These challenges must be resolved if SA’s agriculture is to grow robustly in the coming years.

At the start of the year we expected that the focus would primarily continue to be on a collaborative approach between the government and the private sector to tackle these challenges. However, much of the public discourse has been on international trade risks and misinformation about land reform policy in SA.

While it is important to address the misinformation and risks it presents to SA’s participation in the African Growth & Opportunity Act (Agoa), these two issues must not take all the focus and effort of stakeholders. The domestic challenges still matter more as they directly affect the daily operations of farming businesses and agribusiness in many small towns across SA.

Significantly, given that we are in an environment of heightened uncertainty, the sector’s approach should move from the reactive mode we observed since the start of the year to a proactive approach. This would entail SA refocusing on domestic plans and programmes such as the Agriculture & Agro-processing Master Plan and Operation Vulindlela.

In trade matters, there should be increased efforts to widen export markets to new regions. The present environment, where all countries are uncertain about the direction of world trade, also presents an opportunity for SA to strengthen friendship and trade in various regions. 

Within the Brics bloc, SA must use the current geopolitical climate to firm up trade ties with this bloc, addressing all tariffs and nontariff barriers that have long made SA agricultural products uncompetitive relative to those countries that have duty-free access to some Brics markets, such as China and India. This approach would be in line with the aspirations of the master Plan, which seeks to expand SA’s agricultural production through an export-orientated approach, in addition to gains that can be realised domestically with value addition.   

Opening up new markets would also refocus South Africans on the port issues and rural roads, which require significant improvements. As things stand, the more attention given to global issues that various regions of SA have limited influence on, the more domestic challenges will continue to constrain the sector’s growth. 

This refocusing must start at government level. The directorates responsible for domestic matters in the departments of agriculture and trade, industry & competition, among others, must refocus and rekindle conversations with stakeholders about the programmes under way. Equally, a small and well-resourced team with senior government officials and the private sector must focus on widening trade to new markets.

Given that we are in a noisy time in international trade, frequent stakeholder updates by government and private sector trade teams that would work on trade would provide comfort about the work under way. This would also assure stakeholders that this team was directing the trade matters of the agricultural sector in the right direction.

Allowing the geopolitical noise to drown out the core issues constraining this sector’s long-term growth and job creation will guarantee limited progress.

In other areas that require a release of government land with title deeds to beneficiaries, the government should march forward with that process and not open more discussion. The new beneficiaries would then partake in the programmes under the master plan, collaborating with commodity associations and many development organisations.

Ultimately, this is not an attempt to minimise the global risks, which could have profound implications on SA’s agriculture. However, some balance and focus on domestic issues would help. 

• Sihlobo is chief economist at the Agricultural Business Chamber of SA and an extraordinary senior lecturer in Stellenbosch University’s department of agricultural economics.