South Africa must push agricultural exports within Brics
South Africa's agricultural growth in the first 30 years of the democratic era has been supported, among other things, by two pivotal interventions.
The first was a deliberate and concerted strategy to invest in genetics for crops, horticulture, and livestock. The second was a strong push to expand export markets. As production continues to increase, and there remains capacity for its expansion, these two levers must be accelerated.
The Department of Agriculture must support new ethical breeding techniques that the private sector occasionally presents, as they may be vital for continuous productivity improvement.
More importantly, with climate change and the increasing frequency of extreme adverse weather conditions, improved seed cultivars that cope with such environments will become critical in supporting our agricultural system. Therefore, crop and livestock breeding should remain a priority policy area for South Africa as an anchor for food security and agricultural production progress.
Equally important is boosting exports to new frontiers while maintaining access to the existing markets in the EU, Africa, and elsewhere. Admittedly, South Africa is the only African country in the top 40 global agricultural exporters, with an export value of US$13,2bn in 2023 and ranked the 32nd largest agricultural exporter in the world, according to data from Trade Map.
But accessibility to these markets is not cast in stone. In an increasingly fragmented world and various recent incidents of non-tariff import barriers, paying particular attention to nurturing the existing markets and opening new ones will be vital.
South Africa already has experience of protectionism in the EU, with barriers in citrus, and in the Southern African Customs Union, where Botswana and Namibia have targeted South African vegetables and citrus.
Political leadership vital
The trade issues are not purely economic but political, which means that South Africa’s political leadership must take a clear stand and focus on retaining the existing markets through dialogue with the political leaders of those countries where we continue to experience challenges.
The Departments of Trade Industry and Competition (DTIC) and of International Relations and Cooperation (DIRCO) must be at the forefront of these efforts, supported by scientific insights from the Department of Agriculture. DIRCO minister Ronald Lamola has already made it clear that diplomacy must be aligned with economic interests.
While in the past, DIRCO may not have played a leading role in economic discussions, in today's world, where geopolitical tensions have spilled over into trade, this particular department should be even more prominent in promoting South African economic interests.
The Southern African Customs Union issues should be the first test case. At the same time, the obstacles put up by the EU are currently part of the World Trade Organisation processes after South Africa formally lodged a case against the EU.
Brics Summit an opportunity to highlight agricultural trade
Also very important in the near term is the upcoming Brics summit in October 2024, which will take place in the city of Kazan in Russia. While this grouping is not a trade bloc, utilising the structure to push more ambitious trade matters is vital. The agricultural sector is one of South Africa’s economic sectors that would benefit from deeper trade relations with the Brics+ countries.
As things stand, South African agriculture has not benefited much from trade with this grouping. Before adding other members to the 15th Summit in Johannesburg in 2023, the original Brics countries accounted, on average, for just 8% of South Africa's agricultural exports. In comparison, the UK accounts for roughly 7% of South Africa's agricultural exports.
Yet, between 2019 and 2022, the original Brics countries' agricultural imports averaged US$255 billion annually, according to Trade Map data.
China accounted for 71% of all the agricultural imports into the group, followed by India and Russia at 11% each, Brazil at 4%, and South Africa at a mere 3%. Despite these sizeable agricultural import figures, the intra-Brics agricultural trade remained relatively low.
Remarkably, the products these countries imported include soybeans, beef, maize, berries, wheat, palm oil, poultry meat, cotton, barley, dairy products, pork, apricots and peaches, sugar, wool, sunflower seed, nuts, sorghum, goat meat, wine, grapes, bananas, avocados, mangos, guavas, and fruit juices, among other products.
South Africa produces some of these products in abundance and has surplus export volumes. Thus, South Africa championed a need to deepen trade in the 2023 Brics Summit.
This year, the message going to the Brics Summit in Kazan should focus on building on the spirit of the 2023 Johannesburg Summit, which promoted dialogue about deeper agricultural trade. This year, the message is even more urgent as the newly added BRICS+ members also present an opportunity for widening agricultural exports.
The South African authorities should lobby for a more pragmatic approach beyond the high-level talk so that businesses can see the full benefit of BRICS+ engagements.
