Uneven | Agriculture

The Complete Story of Growth in SA Agriculture

By Wandile Sihlobo

For much of this year, many, myself included, have written about the positive growth prospects of South Africa's agricultural sector. The optimism largely stemmed from the excellent harvests of grains, oilseeds, fruits, and vegetables we see across the country following the favourable summer rains in the 2024-25 season.

Indeed, the high-frequency data also reflect this optimism, with the sector's gross value added having expanded by 18.6% quarter-on-quarter in the first quarter of this year and by 2.5% in the second quarter of the year. The milder growth figures in the second quarter were partly because of the delay in the summer crop harvest. In the third quarter, the sector is expected to show notable growth again.

The sentiment in the sector remains reasonably positive, with the Agbiz/ IDC Agribusiness Confidence Index, a sentiment indicator in South Africa's agriculture, at 63 points in the third quarter, well above the 50-point neutral mark that separates optimism (above 50 points) from pessimism (below 50 points). Due to these abundant harvests, exports have also been encouraging since the start of this year, with agricultural exports reaching US$3.7-billion in the second quarter, a 10% year-onyear increase.

With a picture like this, one might believe that all is well with South Africa's agriculture. However, that is not the complete story. The close observers of the sector are aware that this flourishing picture conceals some significant challenges in certain subsectors. The sector's recovery, while generally uplifting, is uneven. The major subsector of agriculture, livestock, is strained. The foot-and-mouth disease that many South Africans read about at the start of this year remains a major challenge and constraint for livestock farmers. I was reminded of this ongoing challenge this past week. On September 29, I had the opportunity to engage with and listen to representatives from agribusinesses in the KwaZulu-Natal province of South Africa.

The general sentiment in the region was that the agricultural conditions are favourable.

However, one aspect that got many people in the room engaged was the comment from the representative about the ongoing challenge of footand-mouth disease among dairy producers in the province.

Representatives from various banks commented on the cost burden faced by some of their clients, and dairy farmers' representatives painted a picture based on their firsthand observations of the challenges.

This was a valuable input because many of us in central South Africa and the northern regions typically think of foot-and-mouth disease from the perspective of beef producers; rarely do we consider its cost burden on dairy farmers as well.

Indeed, for beef producers, the central issue is the temporary closure of various export markets, while farmers must continue to feed the cattle, thereby significantly increasing costs.

One question that also arose was about the reasons South Africa is not on full-scale vaccination against foot-and-mouth disease, especially in regions such as KwaZulu-Natal that are prone to outbreaks. We also learned more about the constraints on vaccination supplies in certain areas.

These aren't new issues, and they have been discussed in various forums in South Africa. For example, in July, the Department of Agriculture held a foot-and-mouth indaba to reflect on this very same challenge. Still, hearing about the picture of KwaZulu-Natal from the affected individuals was illuminating.

What one takes away from the conversation is that South Africa remains at a critical point regarding the control of foot-and-mouth disease and various animal diseases. This underscores our continuous emphasis on the need to strengthen the country's biosecurity to prevent animal diseases and also plant diseases.

As we contemplate what must be done to cushion the sector from this disease, we need not only to ease regulations for importing and registering the various products farmers require, but also to increase investment in vaccine manufacturing. We all know of the difficulties and cases of corruption at the Agricultural Research Council and the Onderstepoort Biological

Products (OBP), a state-owned vaccine manufacturer. The work to revive these institutions is underway, according to recent statements by the Department of Agriculture, a line department for these organisations.

Still, the partnership with the private sector must be the path forward. We must ensure that entities capable of producing critical vaccines for our livestock industry receive the necessary government support to partner and roll out the measures needed to support the sector. We no longer need just one centre of manufacturing, but rather multiple centres where capabilities exist. Thereafter, also nudge the Department of Public Works and Infrastructure to assist with fencing to ensure the strict control of animal movement in the country.

The livestock industry is a pillar of South Africa's farming economy, accounting for approximately half of the country's farming fortunes. Therefore, ensuring its resilience is vital, and that starts with addressing foot-and-mouth disease and other diseases head-on.

Importantly, as a country, we aim to drive export-led agricultural growth. To achieve this objective, we must address the animal diseases that are a major constraint.

Wandile Sihlobo is the chief economist at the Agricultural Business Chamber of SA (Agbiz) and a senior fellow in Stellenbosch University’s Department of Agricultural Economics.