With South Africa hosting the 15th Brics summit this week, the bloc’s supposed benefits for the country’s agricultural sector have not materialised, according to experts.
Speaking at a panel discussion on Africa’s food insecurity and global food supply challenges, Francois Fouche, an economist and research fellow at GIBS Business School, said the steep increase in global fertiliser prices after Russia was slapped with sanctions for its invasion of Ukraine had a negative impact on the sector.
“We are talking about fertiliser prices that have spiraled several hundred percent. What was the primary cause of the spike? Yet we are still buddy buddy?” Fouche queried.
“What are the benefits of us being in Brics if we cannot access the two largest markets in the world ... if we are experiencing significant increases in fertiliser prices which hurt our farmers, if we are experiencing significant food inflation that hurts our poor? These have done the same in many parts of Africa because wheat exports have been blocked out of the Black Sea,” he said, referring to Russia’s withdrawal from the UN Black Sea Grain Initiative that allowed the safe delivery of Ukraine’s grain to global markets.
There is still an immense amount of red tape; it is not seamless. It is both ways
Seelan Gobalsamy, CEO of Omnia — a company that manufactures chemical products for mining and agricultural industries — told Business Times he hoped the summit would result in South Africa’s agricultural sector benefiting from increased trade and removal of red tape between member states.
“There is still an immense amount of red tape; it is not seamless. It is both ways ... It is exporting and it is importing. There are tariffs on either side. It is about getting some level of evenness. You can see it when you have an agreement with the US, or India, or China, or Brazil — it opens a lot of doors.”
Gobalsamy said the biggest challenge for farmers remained access to water and electricity.
“There is load-shedding and the infrastructure is failing around water. The price of electricity has gone up 30% in the last two years. To pay 30% more, to then have load-shedding, and then pay for diesel generators or alternative energies ... You are being penalised because of failing infrastructure,” he said.
South Africa should invest in creating more small-scale farmers, he added.
“We need more small-scale farmers. If we can have hundreds and thousands of new farmers, it will help. It will help the fiscus, it will help food production and job creation. It will make people feel valued if you can say ‘I grew this spinach, I sold it, I made this money and I put my kids through school’.”
Agri SA CEO Christo van der Rheede told the panel that weaknesses at our ports were causing farmers to look to other ports in southern Africa — such as Maputo in Mozambique and Walvis Bay in Namibia — to ship more produce.
He said Agri SA was enquiring about the costs of air freight, to fly out perishables such as berries and watermelons instead of transporting them by rail.
“Our big battle is to have a conducive environment for food production to take place and to maximise profitability. Without ensuring farmers remain profitable, it will become very difficult to continue to produce.
“We have seen the impact of load-shedding, and the impact of logistics on [farmers’] financial sustainability ... so much so that some are already reducing the number of hectares they are planting, especially when it comes to vegetables. That is not what we want to see; we want to see greater growth in the agricultural sector and the sector becoming a more inclusive industry. It is not a farming problem, that problem sits right up there at Treasury level.”
