A lot has already been written about the implications of SA’s recent sovereign credit rating downgrade to subinvestment grade by Moody’s Investors Service, with a negative outlook on the rating. Its effects on the agricultural sector could vary, but I believe there will be three major implications in the near term.

First there could be a deterioration in confidence levels in the agricultural and agribusiness sectors, and thereafter investment. The Agbiz/IDC Agribusiness Confidence index (ACI) improved by six points to the neutral 50-point mark in the first quarter of 2020. This uptick was underpinned by improved rainfall conditions across the country. The ACI comprises 10 subindices, two of which are economic conditions in the country and capital investment...

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