WANDILE SIHLOBO: Farmers know property rights are intact and continue ploughing

In the first two weeks of the month I drove across the various regions of SA visiting farmers and agribusinesses. Two aspects dominated the conversations I had. First, there is growing discomfort about the rise of misinformation over the Expropriation Act in SA. Farmers understand that property rights are intact and continue with their farming activities.

Worries that linger due to misinformation are the possible exclusion of SA from the African Growth & Opportunity Act (Agoa) at the official review later this year. While SA’s agricultural exports to the US are small — about 4% of the overall agricultural exports of $13.2bn in 2023 — they are concentrated in a few industries (mainly citrus, wine, grapes, nuts and fruit juices). These industries have enjoyed duty-free access to the US market, making them price competitive.

Exclusion from Agoa would not mean being blocked from the US market, but an imposition of about 3% duties on SA products that would affect their price competitiveness. This uncertainty demands that SA work on a post-Agoa sustainable trade arrangement with the US.

There is a need for SA to continue opening as many new export markets as possible. The focus is on retaining access to the EU, UK, Africa and various other regions of the world where SA products are established, and on promoting tariff-free access between the Brics countries (Brics is not a trade bloc). Farmers and agribusiness recognise the risks of the unpredictable geopolitical and trade environment to SA’s export-orientated agricultural sector. 

Beyond trade, agricultural production conditions in SA are promising. The sector is likely to improve in 225 after the harsh midsummer drought of 2024. However, the recovery may not be uniform across all regions. Some farmers will continue to face a financially challenging environment for some time, and crop production could only recover mildly in some areas.

In field crops farmers have managed to plant well in most regions, though the timing of the planting seems to differ vastly in some areas, partly due to the erratic rains at the start of the season.

However, regional dynamics present some nuances. While the crop fields are visibly green and in good condition, some regions were strained by the heat of November to the beginning of December 2024. In such regions, while the crop has recovered from the recent rains, it is not in its usual health state for this stage of the season.

I noticed this mainly around the small towns of the eastern Free State. I suspect the North West, the western regions of Mpumalanga and the northern parts of Limpopo may have similar experiences.

Unlike the northern and central regions of SA that had these challenging weather conditions, the far eastern areas of the country had better rains. This has benefited the sugar cane and general production prospects of the sugar industry.

The rains also improved dam levels, further supporting the production of fruits and vegetables under irrigation, and even the irrigated veld for the dairy industry. Market prices for fruit farmers look promising, and with eased delays at the SA ports so far, the sector is also likely to benefit from increased exports.

For vegetable farmers, the recent removal of the export ban on SA vegetables in Botswana will also help this year from a demand perspective. Meat producers and dairy farmers have endured higher feed costs, moderate milk prices and animal diseases. Therefore, improving the grazing veld due to better rains and controlling the spread of animal diseases will improve production conditions this year.

Ultimately, SA’s agriculture is likely to experience a mixed and slow recovery in 2025. The erratic rains and the season’s late start are some challenges. Fortunately, the rainfall outlook to March is optimistic and will support crops, fruits and grazing veld.

Beyond production, the sector must also battle dangerous misinformation from a trade perspective.

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