EDITORIAL: What the rest of SA can learn from the soya bean industry’s success
The sector is one of the biggest successes in targeted import replacement
Driving past random heaps of rubbish on potholed streets every day, just to arrive at a home left dark by load-shedding is enough to make you forget that some things in SA still work very well.
One of these is the country’s food production and supply chain. As long as national roads are not blocked by looters and protesters, fresh produce markets, supermarkets and spaza shops remain well stocked with everything their customers need and want.
The ubiquitous availability of food does, of course, not mean that everyone in SA can afford a healthy meal, or any meal at all, every day. But our socioeconomic problems that drive food insecurity should not take away from successes SA’s farming sector have achieved.
Its ability to remain internationally competitive despite dire challenges such as load-shedding, poor water quality, and dreadful road infrastructure holds lessons for other industries such as renewable energy and manufacturing that are struggling to develop and compete against imports.
One of the best examples is the way the local soya bean industry has been able to substitute imports from global farming giants such as Brazil.
Soya beans are primarily important in SA as a source of animal feed — the beans get processed into meal or oilcake which is used as an ingredient in many feeds. Given that feed often represents that largest share of input costs in animal farming, the price of soya beans plays a large role in the price consumers ultimately pay for meat.
According to the Bureau for Food and Agricultural Policy (BFAP) the story of the SA soya bean industry is one of the biggest successes in targeted import replacement. It also shows what can be achieved when the government and private sector earnestly pursue a common vision.
The department of trade, industry & competition played its part with clear policy mandates and by facilitating financing to the sector via the Industrial Development Corporation.
This triggered private sector investment in 2-million tonnes of crushing capacity (to process soya beans into meal used in animal feed) during the early 2010s.
Industry worked together and farmers agreed to support local research & development, such as cultivar trials and the development of new soya bean cultivars suited to SA farming conditions, through a statutory technology levy.
As outlined in BFAP’s latest 10-year agriculture outlook for SA, the result was a rapid expansion in production. Twenty years ago, SA produced only 220,000 tonnes of soya, this year farmers are expected to grow 2.8-million tonnes.
As production grew soya bean prices switched to export parity levels, and exports are projected to exceed 500,000 tonnes in the current marketing season.
In addition, BFAP says, with soya beans now trading at export parity levels, the crushing plants are processing high volumes, despite load-shedding, and are offering considerable discounts on soya meal, which is providing some relief to the intensive livestock industries.
By increasing production and investing in processing capacity the industry has created value, jobs and security of supply.
A final lesson to take away from this is a truth that SA knows well but implements rather poorly — that the government should enable as much as it can, but interfere as little as possible.
After all, the things that work in SA are usually controlled predominantly by the private sector.
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