As 2024 draws to a close, it is worth reflecting on critical events and themes that dominated the South African agricultural scene.
Five stood out for me and resulted in mixed performances across the different subsectors. The field crops and livestock subsectors had their fair share of challenges while the horticulture subsector had a relatively better year.
We started the 2023-24 production season aware it would be a mild El Niño year, but the timing was uncertain at the start of the season. Consensus from early forecasts showed it would intensify from March onwards. In theory, this would not be the worst timing for farmers as the crop would have passed the pollination stages that require moisture.
As a result, we assumed South Africa would achieve a decent harvest under such conditions. Farmers planted slightly higher areas for the 2023-24 summer grains and oilseeds than the previous season. The good rains at the start of the season were a major incentive for farmers, along with relatively higher agricultural commodity prices. For the first few months of the season, South Africa seemed to be in for a decent summer grains and oilseed harvest.
However, conditions changed for the worst from February to the end of March. The country did not receive meaningful rains throughout the period, and there was a severe heatwave. This resulted in significant crop failure and financial loss to farmers as they had planted a slightly bigger area. By the end of the season, South Africa's 2023-24 summer grains and oilseed harvest was down 23% from the previous season at 15,40-million tonnes.
The consequence of crop failure is the tight grain supply and higher commodity prices we continue to see. For example, on December 6 2024, white maize spot price traded at R6,388 per tonne (up by roughly 50% year-on-year), with yellow maize at R5,036 per tonne (up roughly 30% year-on-year). The high maize prices also present upside risks to consumer food price inflation.
Animal disease continued to be a major challenge for farmers.
Animal disease continued to be a major challenge for farmers. This is understandable because we have had cases of foot-and-mouth disease in cattle, African swine fever in pigs and avian influenza in poultry over the past three years. While animal disease outbreaks are not unique to South Africa and are common across the world, South Africa's challenges have intensified in the recent past. In 2022, six of South Africa's nine provinces reported foot-and-mouth disease outbreaks. This was the first time in the country's history the disease had spread so wide. Livestock and poultry farming account for roughly half of agriculture's annual gross value added.
Moreover, the livestock subsector also significantly contributes to the inclusion of black farmers in commercial agricultural production.
The challenging place in which the country found itself prompted government and industry stakeholders to increase their focus on strengthening farm biosecurity controls and surveillance. Among interventions underway are efforts to improve veterinary and related support services (mainly the laboratories) that deal with vaccine production needs.
On October 25 2024, the department of agriculture announced the "foot-and-mouth disease outbreak has been successfully resolved in North West, Free State, Gauteng and Mpumalanga ”.
This is admirable progress and further supports South Africa's ambition of being a global player in red meat exports. The path to export markets involves addressing the biosecurity challenges.
There were positive developments in agriculture this year. One which is not necessarily agriculture specific is the improvement in electricity supply. This positively contributed to the sector and partly to robust horticulture production. For example, when one considers the dependence of agriculture on horticulture, it is always worth highlighting that all horticulture – fruits and vegetables - depends on irrigation that needs an adequate power supply.
In crucial field crops, roughly 20% of maize, 15% of soybean, 34% of sugarcane and nearly half of wheat are produced under irrigation. In red meat, poultry, piggery, wool and dairy production, electricity is also heavily used across processing activities. Similarly, agribusinesses and other food-producing businesses use high amounts of electricity and downstream processing activities, such as milling, bakeries, abattoirs, wine processing, packaging and animal vaccine production. This year's better electricity supply has helped the sector and significantly lowered the cost of doing business as it reduced reliance on expensive diesel-backed generators.
The commitment to policy continuity after the formation of the government of national unity is also a noteworthy development for agriculture.
Logistics infrastructure efficiency remains a primary concern for the farming sector. However, the ongoing collaboration between Transnet, private industry and logistical organisations assists in ensuring the continuous flow of products, even if there are delays in specific periods. The gains of this collaboration are visible in export figures. For example, South Africa's cumulative agricultural export value for the first three quarters of 2024 is up 4% from last year at $10.5 bn (R192.2bn). This reflects an uptick in the volume of agricultural exports and the price surge in some products. The top exported products by value include citrus, nuts, maize, apples and pears, wine, fruit juices, sugar, dates, figs, avocados and mangos, berries and grapes.
The commitment to policy continuity after the formation of the government of national unity is also a noteworthy development for agriculture.
Ordinarily, when a new government begins its term, there would be a temptation to introduce new policies and programmes. At times this is justified. However, in agriculture, the Agriculture and Agro-processing Master Plan has been formulated and embraced by business, labour, government and other social partners. There was no need to introduce a new policy, but for continuity and a sharper focus on implementation of policy and programmes.
This is precisely what the seventh administration committed to doing in agriculture. This approach saved the sector valuable time, and the efforts could be channelled towards implementing programmes and the sector's growth. Among other things, this is partly why sentiment in the sector improved notably in recent months.
While there were other developments in the sector, the five points outlined above were perhaps the most notable and crosscutting in value chains.
As we end this year, there is renewed optimism in the sector on the back of expected better rainfall and improvements on the animal disease control front.
The focus next year should remain on the opening of export markets, improvement of the network industries and improvement in municipality performance. There also needs to be a relentless focus on implementing the Agriculture and Agro-processing Master Plan as it carries relevant and necessary interventions to support the inclusive growth of agriculture.
• Wandile Sihlobo is an agricultural economist
For opinion and analysis consideration, email Opinions@timeslive.co.za
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