Covid-19 Watch

USA continues to identify more opportunities in SA agriculture market, are we?

With South Africa’s unemployment rate hitting a new record high of 34.9% in the third quarter of 2021, South African leaders should be having sleepless nights trying to figure out solutions to poverty alleviation and food security, whilst supporting core agricultural development programmes to stimulate growth and employment opportunities.

The economic impacts of Covid-19 can be felt even by ordinary South Africans. This, then, is a period where individuals and government need to look for proper remedies to solve the problem and develop the country’s economy.

The Centre for Development and Enterprise (CDE) said in its 2020 report that South Africa has one of the deepest and most persistent unemployment crisis in the world.

Now, if we are to succeed in fighting this jobs bloodbath, then we need a new pattern of doing things. As Albert Einstein puts it “The definition of insanity is doing the same thing over and over again, but expecting different results”.

In 2017, Luc Christiaensen published an article in the WorldBank.org titled:  ‘Can agriculture create job opportunities for youth?

The answer was ‘yes’. Luc argued that while the majority of youth expresses to see its future outside agriculture, many good job opportunities on and off the farm remain in agriculture.  He said the challenge is to make the agricultural sector and its up and downstream activities competitive through innovation, public investment in supportive rural public goods and services, and secondary town development to make them sufficiently attractive to young and older farmers alike.

This, he said, remains a largely unfinished agenda, one which is equally important to reach the twin goals of eradicating extreme poverty and boosting shared prosperity.

Now, in the Global Agricultural Information Network (GAIN) report released on 5 January 2021, the United States Department of Agriculture (USDA) said South Africa continued “to be an important market for U.S. agricultural products”.

Our local agriculture market is seemingly enticing the USA to even consider increasing more of its agricultural exports to South Africa.

The report adds that South African consumers’ willingness to try new products and a growing demand for imported products due to changes in health-conscious eating and drinking habits has created opportunities for U.S. agricultural exports in niche food and beverage categories.

After reading this report, I paused long and thought if the USA sees us as an important market for agricultural products, are we also viewing ourselves as such? What opportunities in the local market had they identified? Are we able to identify such?

According to a 2020 trade report released by our local department of agriculture, land reform and rural development (DALRRD), the United States was SA’s fourth largest supplier of agricultural products, with “a value of R4 billion and a market share of 4.3% of South Africa’s agricultural imports”. 

If the USA was able to calculate its value in our economy and see more agriculture related opportunities, what real economic value are our smallholder farmers bringing to the table? What were their expansion plans other than relying on formal markets to open doors for them?

When one base or compare most SA small farmers with their counterparts in African countries, one finds that the South African ones are way behind. In countries such as Nigeria, Tanzania and Kenya, all farmers – big or small – directly contribute to their agriculture economy and there’s evidence of this.

Or maybe in the South African context, could it be because of uncoordinated data collections for small holder farmers?  If yes or not, what new or old measures can be implemented to have some sort of real time data on production and markets?

The South Africa agriculture is very unique and interesting. If government is able to budget for support programmes for developing the sector, how difficult can it be for the same processes to be employed on the projections of agricultural outputs/harvest per province?

Again, as a country faced with jobs bloodbath, our industry captains and government should be executing agricultural developmental policies with penchant. Take for example a country like Kenya, which has a similar economic frame of thinking as South Africa, yet, its unemployment figures were at a level of 6.6 % in the first quarter of 2021.

This was not surprising at all especially taking into cognisance the contribution of agriculture to the GDP. According to the Food and Agriculture Organisation (FAO), agriculture contributed 26% of the Gross Domestic Product (GDP) and “another 27 per cent of GDP indirectly through linkages with other sectors. The sector employs more than 40 per cent of the total population and more than 70 per cent of Kenya’s rural people”.

Whereas in South Africa, it is the opposite, as we have a large rural migration of job seekers to urban areas. According to many labour scholars, this has negatively affected socio-economic development in rural areas.

Besides issues with government’s rural development strategy and the district development models, the question of foreign countries, and not just the USA, identifying opportunities in the local agricultural market still haunts me.

I mean the USDA report further calls South Africa “an attractive business destination due to its growing market and a well-developed infrastructure, catering to efficient distribution of both imported and locally produced agricultural products to major urban centers and the entire Southern Africa region”.

Now, if we have a local growing market, a well-developed infrastructure, why are we not vigorously incorporating smallholder farmers to the market and creating an environment that will enable them to be competitors? Why is that we still have farmers whose produce rot on farms because they don’t have access to the market?

The whole agri-industry and government needs to stand up and use the agriculture sector as a weapon to fight unemployment, food security and poverty alleviation because clearly, there is a growing market for agricultural products and there are higher chances of return on investment.

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