By Zhann Meyer; Africa Head for Nedbank Capital Global Commodity Finance
South Africa continues to play a leading, and vital, role in the African agriculture landscape. In this country, each farmer provides food for approximately 1 600 people. To put this in perspective, the average food provision ratio for the rest of Africa is closer to one farmer feeding 26 other people. And South Africa’s leadership position in this regard is set to become increasingly relevant and important as the world looks to Africa to play a bigger role in addressing global food security issues.
However, the ability of South Africa to capitalise on the opportunities this global shift presents will depend largely on the perspective in SA, and its agriculture stakeholders, take with regard to the growing number of challenges facing its agriculture industry as a whole. And there can be no denying that there are numerous challenges.
Insecurity relating to land reform remains a significant hindrance to investment and development as stakeholders in agriculture adopt a ‘wait and see’ attitude rather than investing capital into land or farming inputs.
Climate change is becoming a greater inhibitor of yields, as incidents of widespread droughts and floods play an ever-increasing role in crop choices and planting decisions of the country’s commercial farmers.
Also, a lack of coordination in terms of agriculture policies across most of the SADC countries, coupled with seemingly ad hoc import or export tariffs, or bans based on seasonal surplus or shortage of certain commodities, continue to inhibit the potential that exists for southern African countries to achieve the integration and collaboration required to raise the international expectations of the region’s agriculture sectors.
This combination of challenges, combined with growing security fears of South African farmers, has resulted in more than 2000 of these farmers moving their primary agriculture activities outside of this country’s borders – taking with them vast amounts of knowledge, experience and potential financial investment. While many of these farmers remain residents of South Africa and commute to their newly established farms in bordering countries, the reality is that they are no longer as committed as they may previously have been on developing agriculture in their home country – instead focusing more of their attention on developing the many opportunities they now enjoy outside of this country.
While all of this may appear to paint a somewhat bleak picture of the future of SA agriculture, the reality is that where there are challenges, there are also opportunities. The issue is how to identify and capitalise on them.
In recent years, South Africa has successfully consolidated much of its agricultural activity, thereby creating a robust and largely sustainable industry, characterised by synergistic large-scale commercial farming with the potential to deliver numerous benefits – to farming as a job-creating industry, broader society, and food security as a whole. This type of core/satellite farming model, with the commercial farmer as the central point around which an organized, smaller-scale agriculture industry is nurtured, is key to the long-term success and growth of agriculture across the rest of Africa. It will achieve this by providing access to expertise, affordable inputs, mechanisation, safe and secure storage and transparent market-related pricing with a ready and reliable market into which smaller farmers can sell their produce.
In many ways, South Africa has, or is steadily moving towards, this model, which government has had a hand in creating through its recognition of the need for balanced legislation that promotes and facilitates a strong, commercially viable local agriculture industry without sacrificing international investment appeal. The result has been a more realistic and sensible approach to import tariffs and a tangible commitment to the enablement of sustainable farming. Consequently, the local agriculture industry remains largely stable, jobs are largely being protected, and South Africa is coming to the realisation that, in many respects, it has all the resources and skills it needs to be self sufficient rather than relying on expensive imports to meet its food requirements.
It’s been a relatively steep learning curve, but the rewards are potentially massive – not just in terms of ensuring the sustainability of our own agriculture, but also in the ability it affords us to guide and assist the rest of Africa to realize its full potential.
All of this has also helped create an environment that is proving appealing to international agriculture investors, many of who now view South African Agricultural Corporates and other role players as valuable springboards into the rest of Africa.
Leveraging this perception offers untold benefits for our country and, ultimately, our continent. The fundamentals are all in place for South Africa to act as this African agriculture hub. Our country is arguably one of the easiest in Africa to do business with. Our farming infrastructure is in place and has been proven reliable and robust. And while we may have seen a small measure of agriculture ‘brain drain’ in recent years, we most definitely still have the skills, expertise and local knowledge to transform ourselves into an African centre of excellence and facilitator of African agriculture growth. In fact, doing so may very well be a good way of attracting many of the farmers who have left for greener pastures back to South Africa as they recognise the value placed on their skills, and the unique opportunities they have to play a vital role in moving the country’s agriculture sector forward towards realising the massive potential it has to become not just an African leader, but a global one too.