AGRICULTURAL NEWS - Agriculture could play an important role in driving South Africa’s economic growth and strengthening the rural economy, according to FNB senior agricultural economist Paul Makube.
Speaking at a sustainability seminar at Nelson Mandela University’s George Campus on Thursday 13 August, Makube said agriculture and mining were the sectors that have been absorbing the economic shocks currently facing South Africa and the global economy the best.
Despite geopolitical conflicts, rising input costs, logistics problems and changing weather patterns putting pressure on farmers and businesses, agriculture has proved to be remarkably resilient.
Primary agriculture contributes about 2.5% to the economy, but its broader contribution rises to about 15% when upstream and downstream industries are included. “If you want to rejig the South African economy, it’s to support agriculture at that [primary] level,” he said.
Stronger rural economies could absorb labour, reduce migration to cities and help attract essential professionals such as doctors, nurses and teachers to these areas.
The Garden Route has a diverse agricultural base and access to export markets, and future growth here could increasingly come from “dollar-income crops”. He said the Southern Cape has good opportunities in commodities such as avocados, berries and dairy. Further growth is possible through better access to international markets which would also benefit the broader agricultural value chain.
However, to unlock these opportunities, the agricultural sector must overcome several challenges. South Africa imports about 80% of its fertiliser, which exposes farmers to international price and supply shocks. Logistics are also a concern, as about 85% of goods are transported by road, while rail is underperforming.
Makube was, however, cautiously optimistic about current reforms taking place in ports and rail infrastructure. He said private sector involvement was bringing more investment, technology and skills to these sectors.
Makube said the impact of climate change is also becoming an increasingly important factor. The El Niño weather pattern could bring below normal rainfall, although its strength and timing remain uncertain at the moment.
He said sustainable farming practices, such as protecting soil health and improving its ability to retain moisture, are critical in the light of possible dry conditions. He further stressed that farmers need to be financially resilient by maintaining strong balance sheets. Disciplined management, succession planning and traceability must also be in place to ensure the long term sustainability of farming businesses.
Compliance in agriculture
Also on the programme was Matthew Wessels, sustainability officer from the Sustainability Initiative of South Africa (Siza), who did a presentation on compliance in agriculture.
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