Transcript Source: DAFF, 2010. - USAID Southern Africa Trade Hub

Overview on South African
Agriculture and Agribusiness
USA NAMPO Exhibitors
15 May 2011
John Purchase
Content
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Introduction
SA Agriculture
SA Agribusiness
Prospects & Challenges
Introduction
• Well developed commercial sector and subsistence
oriented sector – dual economy
• Only ~12% of land area arable, of which 22% high
potential
• ~1.3 million hectares under irrigation
• Water major limiting factor – SA semi-arid
• Deregulation & market freedom
• Number of competitive advantages
- Near world-class infrastructure
-
Counter-seasonality to Europe
Biodiversity
Trade agreements
Competitive input costs
Access to latest technology & innovation
Role of Agriculture in
SA Economy
• Strategic sector – provides food, fiber, wine & beer,
satisfying two basic needs of man (+ others!)
• Has provided national food security since the start
of the 20th century (Pop: ~4,0 million), right
through to the 21st century (Pop: ~49,0 million,
~60% in urban areas)
Contribution of Primary
Agriculture to GDP (Source: Statssa)
5
4
%
3
2
94
95
96
97
98
99
'00
'01
'02
'03
'04
'05
06
07
Graph: ABC
08
09
SA economic growth: Tradable goods
sectors lag the non-tradable goods sectors
GDP Index per Sector of Economy
250
200
GDP
INDEX
Agric
Mining
150
Manufacturing
Construction
100
Trade
Transport
50
Finance
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: StatsSA
Graph: ABC
Source: AMT, 2011
FAO Food Price Index
Source: FAO
Inflation
Source: AMT, 2011
Exchange rate
Source: AMT, 2010
SAARF LSM Segments: Proportion of SA adult
population and average monthly household
income in 2009
Source: SAARF (2010a) & BFAP, 2010
LSM class mobility: All adults during the
period 2004 to 2008
Source: SAARF AMPS data for the period 2004 to 2009, as quoted by BFAP
SA Resource Situation
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Land issue: sensitive now, awaiting Green Paper
Energy crisis and energy security situation
Electricity price hikes (31% + 25% pa next 3 years)
Scarce high potential agricultural land to mining, esp.
Mpumalanga, and urban development
Water and water quality crisis
Climate Change effects create uncertainty
Soil degradation/erosion
Resources for sustainable expansion?!
Greater competition for resources
Global warming: Effect?!
Content
• Introduction
• SA Agriculture
• SA Agribusiness
• Prospects & Challenges
Commercial Agric Census 2007
Indicator
1993
2002
2007
Farming units
57 980
45 818
39 982
Gross Farm income (R x1 000 000)
19 620
53 329
79 544
Employees Remuneration (R X1 000 000)
3 637
6 216
8 611
Paid employees
1 093 265
940 820
796 806
Expenditure (R X1 000 000) (Current & Cap)
16 377
45 038
54 072
Market value of assets (R X1 000 000)
66 905
98 428
178 647
Farming debt (R X1 000 000)
15 295
30 857
37 090
Ratio between Farming Debt and GFI (%)
78,0
57,9
46,6
Source: StatsSA
Performance of Sector
Gross Value of Production in R million
Field Crops
70000
Horticulture
Animal Production
60000
R'million
50000
40000
30000
20000
10000
0
2001/02
2002/03
2003/04
Source: DAFF, 2010.
2004/05
2005/06
2006/07
2007/08
2008/09
Performance of Sector
Gross and Nett Farming Income
Gross Farm Income
Nett Farm Income
140 000
Rand X1 000 000
120 000
100 000
80 000
60 000
40 000
20 000
0
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Source: DAFF, 2009.
Seasons
Net farm income
Source: AMT, 2011
Cost price squeeze
Source: AMT, 2011
SA Agricultural Sectors
1. Field crops
- Maize (Corn), wheat, sugar, sunflower,
soybean, groundnuts, dry beans, etc.
2. Horticulture
- Wine/Viticulture, Citrus, Deciduous fruit,
sub-tropical fruit, table grapes, vegetables
3. Animal production
- Poultry, beef, dairy, mutton, wool, mohair,
ostrich, game/venison
Field crops
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Maize – major importance, net exports, GM
Wheat – also staple food, net imports
Sugar – net exports, move into Africa
Soya – growing importance, cake imports, GM
Sunflower – growing importance, S/D balance
Groundnuts – net exports, but declining
Dry beans – net imports, also from China
Total RSA Maize Area (X1000 ha) and Production (X1000 tons)
ProductionArea (X1000 ha)
Production (X1000 tons)
14,000
Ha & Tons (X1000)
12,000
10,000
8,000
6,000
4,000
2,000
0
Years
Data Source: DAFF, 2010
Graph by ABC
Years
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1995/96
1994/95
1993/94
1992/93
1991/92
1990/91
Tons/ha
RSA Maize Yield (Tons/ha)
Yield (Tons/ha)
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Data Source: DAFF, 2010
Graph by ABC
Soya Production Area (X1000 ha) and Production (X1000 tons)
600
Soya Production area (X1000 ha)
Soya Production (X1000 tons)
500
Ha & Tons (X1000)
400
300
200
100
0
Years
Data Source: DAFF, 2010
Graph by ABC
Soya Yield (tons/ha)
Soya Yield (tons/ha)
2.50
Yield (tons/ha)
2.00
1.50
1.00
0.50
0.00
Years
Data Source: DAFF, 2010
Graph by ABC
Horticulture
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Totally deregulated market
Viticulture & Wine – major export industry
Citrus – 2nd biggest global exports, growing
Deciduous fruit – major net exports
Table grapes – major net exports
Sub-tropical fruit – net exports
Vegetables – S/D balance, some
imports/exports
Marketing
• Fresh Produce Markets (FPM’s) play major
role as basic price discovery mechanism and
wholesale market
• However, reduction in trade from 64% to
53% of total production from 1994 to 2004
• Marketing following global trend of retailers
(supermarkets), processors and wholesalers
procuring directly from producers –
shortening/integration of supply chain
SA Wine Production, Consumption
& Exports
Source: BFAP, 2010
Vegetables
Value of total production in 2009:
US$1.2 billion
Vegetable Production (X1000 Tons)
600
500
Tomatoes
Tons 400
Pumpkins
(X1000)
Green mealies
300
Onions
Cabbage
200
Carrots
100
0
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Year
Source: DAFF
Graph: ABC
Fruit
Value of production (2009):
Deciduous fruit: US$0.9 billion
Citrus: US$0.7 billion
Viticulture: US$0.4 billion
Exports (2009):
Wine: US$728 million
Citrus: US$667 million
Table grapes: US$380 million
Apples: US$365 million
Oranges: Total Production, Market Sales,
Exports, Processing & Other
1,600,000
1,400,000
1,200,000
Other
Tons
1,000,000
Processing
800,000
600,000
Exports
400,000
Market
Sales
200,000
0
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Value in 2007/08 = R3 009 610 000
Year
Source: DAFF
Graph: ABC
Source: BFAP, 2010
Animal Production
• Value of production in 2009:
- Broilers R22.5 billion
- Beef R13.3 billion
- Fresh milk R9.1 billion
- Eggs R6.6 billion
- Mutton R3.1 billion
- Pork R3.1 billion
- Wool R1.1 billion
SA Meat consumption
Source: BFAP, 2010
Content
• Introduction
• SA Agriculture
• SA Agribusiness
• Prospects & Challenges
SA Agribusiness
• Strong input sector: Seed, fertilizer, crop
protection and veterinary chemicals,
animal feed, packaging, agricultural
machinery, fuel, etc.
• Financial sector: Major banks, DFI’s,
insurance companies, auditors,
agribusinesses, etc.,
• Storage, trade and agro-logistics
• Agro-processing and packaging
• Retail Sector
South African Agricultural Trade
(Source WTA & GTA, USDA-FAS)
(US$ billions)
2007
2008
2009
Agricultural exports
$4.0
$5.2
$5.2
% of total SA exports
5.7%
6.5%
8.3%
Agricultural imports
$4.2
$4.7
$4.2
5.3%
5.2%
6.4%
% of total SA imports
Major agricultural products exported:
(US$ millions)
2007
2008
2009
Wine
$673.6
$753.9
$727.5
Citrus
$613.1
$711.4
$667.1
Corn
$32.1
$510.3
$444.6
Table grapes
$364.5
$387.6
$379.7
Apples
$329.5
$367.3
$364.7
Sugar
$276.1
$217.9
$386.7
Major export destinations (2009)
China
United States
Germany
Mozambique
Kenya
Zimbabwe
Netherlands
United
Kingdom
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Major agricultural products imported:
(US$ millions)
2007
2008
2009
Rice
$302.1
$463.9
$458.8
Wheat
$261.6
$444.6
$282.0
Soybean cake
$209.8
$311.9
$297.1
Palm oil
$195.7
$299.3
$232.1
Soybean oil
$212.0
$288.5
$106.9
Whisky
$212.5
$202.9
$201.6
Major countries imported from (2009)
United States
Indonesia
Netherlands
China
Malaysia
Germany
Thailand
Brazil
Argentina
0%
2%
4%
6%
8%
10%
12%
14%
16%
Content
•
•
•
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Introduction
SA Agriculture
SA Agribusiness
Prospects & Challenges
South African Agriculture:
Prospects and Challenges
Challenges
• Government:
- Food security, both household and national
- Access to safe, nutritious and affordable food for all
- New Growth Path: Job creation, Shared Growth &
Opportunities
- Empowerment of PDI’s, e.g. AgriBEE, EE, etc.
- Land Reform & Rural Development
- Industrial Policy Action Plan II: Agro-processing
- Competitive environment (Competition Act)
- Sustainable resource management, e.g. CC
- African development, JADAFA, etc.
Challenges
• Private Sector:
- Profitability and competitiveness
- Transparent and reliable markets (Integrity!)
- Engage Govt ito enabling policy environment:
Create confidence for long term investment
- Need for inclusive Strategic Framework/Plan
- Sustainable transformation
- Institutional and value chain support (R&D,
SPS matters, resource base management,
trade facilitation, training & skills development, crop
estimates, agro-logistics, Act 36 of 1947, etc.)
- African opportunities
Overall Prospects
• Much greater food security awareness, both globally and
locally – very positive. Priority for G20, Paris.
• Awareness by government to work closer with Private Sector
• Greater awareness by all of the need to support both commercial and developing agriculture. Better implementation NB!
• Substantial markets: locally, regionally, globally, and especially
to the East. Need market development, though!
• General commodity and agribusiness infrastructure is good
basis – build on this & other institutional capacity.
• New technology/expertise through especially multinationals.
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New global investors looking to Africa for food production –
major development.
Conclusion
• Healthy and robust agro-food industry
• Technologically advanced, globally competitive
• Challenges: Agro-logistics, climate change,
water availability and quality, environmental
sustainability, food safety regulations, R&D, etc.
• Opportunities: Growing population, consumer
spending trends, new markets (esp to East), etc.
• Major contributor to Food Security, growth
and employment in RSA.
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