The agricultural industry has gone to assuage government that food supply systems will not be interrupted following the announcement of a nationwide lockdown.
On March 23, President Cyril Ramaphosa finally declared the country under lockdown.
“Categories of people who will be exempted from this lockdown also include those in the production, distribution and supply of food and basic goods,” he said.
The Bureau for Food and Agricultural Policy (BFAP) concurred with this assertion harbouring a view that South Africa was a surplus producer of food.
“The value of South Africa’s food exports exceeds imports by a significant margin,” it said.
Furthermore, BFAP estimated that the country had ample production and stock levels due to several years where production levels exceeded long term averages.
“This has also resulted in a cycle of lower agricultural commodity prices. If availability does become a challenge, it should be noted that for products such as poultry meat and vegetable oil, imports are only supplementary to South Africa’s own production, which has the capacity to expand and replace imported products.”
Before the COVID-19 outbreak, South African agribusiness was showing amiable signs of recovering in the first quarter of 2020.
“The market share of agribusinesses subindex was at 67 points in the first quarter of 2020 from 62 in the fourth quarter of 2019. The optimism was across the board, with grains related businesses (summer and winter grains) maintaining an unchanged view from the last quarter of 2019” said the Agricultural Business Chamber (AgBiZ) agribusiness confidence of 2020 quarter 1.
This improved optimism is expected to nosedive driving quarter 2 agribusiness confidence into regression.
Of most concern for South Africa is Europe, being at the epicentre of the global outbreak, supplied most agriculture and food products to the country than any other bloc.
BFAP noted that South Africa’s food import bill relied significantly on highly processed and non-perishable products such as vegetable oils, sugar, coffee, meat and dairy products, fruit and vegetable juices, rice and dried fruit to name.
Following the spread of the coronavirus, AgBIZ was concerned about the decline in demand from several traditional export markets and by extension lower agricultural commodities prices.
While the economy had to thrive in this midst of uncertainty, smallholder farmers were worse to be affected.
“A safety net is being developed to support persons in the informal sector, where most businesses will suffer as a result of this shutdown,” said President Ramaphosa.