OPINION | SA’s white farmers would be among victims if Trump ends growth bill

Donald Trump's axing of aid to SA, in response to land reform policies he says will harm its white minority, has raised fears a trade deal may be next, though any such move would hurt the farmers the US president says he wants to help.

Under the Africa Growth and Opportunities Act (Agoa), SA receives tariff-free quotas on agricultural exports including wine, citrus, soybeans, sugar cane and beef. The act makes up about a quarter of its $15bn (R276.59bn) annual trade with the US. That compares with less than $440m (R8.11bn) in US aid in 2023.

"It is not clear whether the exporters are black or white. We don't record such data," said Wandile Sihlobo, chief economist at the Agricultural Business Chamber of SA, but only a tenth of farm output is from black farmers.

"Most white farmers likely have a significant exposure into the US market."

Sihlobo said produce shipped to the US makes up 4% of agricultural exports, equal to about $450m (R8.30bn) a year, compared with 19% for the EU and 38% to the rest of Africa.

However, some producers, such as those for citrus fruit and wine, are more exposed. The former made $134m (R2.47bn) in 2022, 7% of the country's total, while the US is its fourth largest wine market, Sihlobo said.

"It's not industry ending but it's very unfortunate," said Justin Chadwick, Citrus Growers Association president, estimating US-bound exports at 120,000 tonnes. "We [would have] to find another home for that fruit, and our other markets are pretty full."

Agoa is up for review in September. Some Republicans want to punish SA for land reform, its genocide case against Israel and actions such as naval exercises with Russia and China.

The US state department did not respond to a request for comment.

"We urge you to revoke SA's preference benefits under the act," four US congressmen wrote to Trump on February 11, CNBC news reported.

"There's a real likelihood SA is not going to be included in a renewed Agoa," Chatham House senior research fellow Chris Vandome, said. "It's position is fragile."

Trump singled out a law President Cyril Ramaphosa signed last month enabling land expropriation, in rare cases without compensation, after decades of voluntary purchases barely dented inequalities between a white minority who own 75% of freehold land and majority blacks with 4%.

Some farmers said the law violates property rights. Groups defending Afrikaners, descendants of Dutch settlers who make up the largest white ethnic group and own most privately held land, have lobbied Republican politicians for years.

"It was unwise. They're shooting themselves in the foot," foreign minister Ronald Lamola told Reuters in an interview on Monday. "If Agoa is cut, it's a cutting of white farmers."

However, Ernst Roets, then-lobbyist for Afrikaner group AfriForum who travelled to the US in 2018 and brought the land issue to Fox News and some Republican officials, the year Trump first took an interest in it, said he had "no regrets".

"We're hoping for pressure on the government to reconsider its destructive policy ideas," said Roets, now part of a different lobby group.

Not all agribusiness will lose if the act is chopped.

Poultry farmers struggling to "compete with dumping" of subsidised US chicken imports under the act would benefit, said Marthinus Stander, a board member of the SA Poultry Association. 

Reuters