AGRI-FOOD
FOOD SECURITY IN SOUTH AFRICA
PEOPLE, PLANTS AND PLANET
Our country is grappling with the challenge of how to enhance the resilience of food systems to deal with sudden shocks like the pandemic and ongoing stresses like climate change. Meanwhile, hunger persists despite high agricultural productivity that should support every citizen’s nutritional needs.
THE CREAM OF THE CROP: Agriculture economy BY MELISSA MOORE, FUTUREGROWTH ASSET MANAGEMENT
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outh Africa has a highly diversified, market-oriented agricultural sector that extends across various product ranges. Overall agricultural GDP growth is 13.1% year-on-year (relative to a 7% economic contraction for the country as a whole). This outperformance is underpinned by high levels of agricultural output following favourable production conditions; high commodity prices; strong export demand and a favourable rand exchange rate.
FUNDAMENTAL FACETS 1. VOLATILITY. Instability influenced by climate and social change. • Variable weather conditions and climate change cause a fluctuation in yields, which impacts the local and global supply dynamics. This creates volatility in volumes and crop prices. • Geopolitical influences and government actions: o Global supply and demand pressures emerge when governments take actions to subsidise production or when they ban exports due to concerns about domestic supplies. The US-China trade tensions were a source of volatility for certain agricultural commodities. o Locally, policy uncertainty around land expropriation has had an impact on the ability to access capital investment in the sector. o Changing consumer preferences. 2. COMPLEXITY. Agriculture is not homogenous. There are different crops and food types, each with their unique and fragmented
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supply chains. There is diversity within each crop, in terms of how, where and by who it is produced. The complexity is intensified by environmental factors that influence regional and yearly production. 3. S CRUTINY. Role players in the agriculture and food value chain are under pressure to improve the traceability of the food we eat.
Agriculture that prioritises maximum productivity by exploiting natural resources will prevent us from meeting our growing demand for food and fibre on a sustainable basis.
Notwithstanding these complexities, agriculture is widely anticipated to be a vital driver of economic growth worldwide. Within a troubled global economy, the agri-food value chain sectors remain a strong outlier, driven by population growth, urbanisation and the rise of the middle class.
