Green Economy Journal Issue 48

AGRI-FOOD
AGRI-FOOD
FOOD SECURITY IN SOUTH AFRICA
PEOPLE, PLANTS
AND PLANET
READ REPORT
[ECO]NOMIC THOUGHT
greeneconomy/the upshot
Covid-19 and the Food Safety/Environment Dilemma
Tetra Pak Index 2020
Covid-19 is the number one concern for consumers worldwide, evidenced in recent global
research. Against this backdrop, economic worries have seen a sharp upturn, reflecting
widespread uncertainty about the impact of the pandemic on the economy.
Food safety has quickly moved up the list of consumer priorities and is now seen as a major
issue for society. Consumers believe that improving food safety is not only the responsibility
of manufacturers, it needs to be their priority. Consumers are looking for transparency and
reassurance that this priority is being addressed. Many want to know everything they can
about a product’s provenance and production process – highlighting a communication
opportunity for brands.
Concern for the environment remains strikingly powerful. More than two-thirds of consumers
believe that we must change our habits quickly to mitigate further environmental impact. In this
context, sustainable packaging remains key, rated a top expectation from manufacturers.
[Excerpt from foreword]
08 19 30 35 39
The changing
interplay between
food safety and
environment
Food waste is
rising up the
agenda
Sustainable
packaging
matters
Convergence
is on the
increase
Factors
influencing
the future of
packaging
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
South 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. SCRUTINY. 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.
EXPORTS ON THE UP
The South African agricultural sector remains a net exporter, with
exportable volumes of various commodities growing annually. In 2020,
South Africa’s agricultural exports hit $10.2-billion, a 3% increase from
the prior year and the second largest level on record. Simultaneously,
agricultural imports fell 8%, leading to a 26% annual increase in the
agricultural trade surplus, which widened to $4.3-billion in 2020.
Citrus, as a sub-sector, experienced a notable increase in demand due
to the pandemic-related demand for vitamin C. Citrus exports hit a record
high in 2020, with South Africa cementing its position as the secondlargest
exporter of fresh citrus in the world, after Spain. This follows a
period of citrus production growth in response to a spike in global demand
and the attractive investment returns and profit margins – expected to be
sustained beyond 2021.
THE MOMENTUM CONTINUES
Higher yields expected
• Favourable weather has resulted in increased summer crop plantings.
The country could export an estimated 2.8-million tons of maize in
2021/2022, the largest volume since 1994/1995.
• Wine grape production is expected to be larger than in 2020.
• The South African citrus industry should break all previous export
season records with an estimated 158.7-million cartons in 2021, up from
146-million cartons in 2020.
The high yields for the sector should curtail food and overall consumer
inflation – and enhance the sector’s contribution to GDP.
The logistics industry
The anticipated growth in agricultural exports will place pressure on
infrastructure, from handling facilities to transport and the shipping ports.
Industry players are concerned over the country’s logistics systems, after
struggling with port congestion and a shortage of refrigeration equipment
in recent years. The long-term prospects for this significant sector require
that we overcome current operational inefficiencies. We need an efficient
and cost-effective logistics industry that can facilitate the movement of
commodities, not only between provinces, but also to export markets. This
presents an opportunity for infrastructure investment in the sector.
OPPORTUNITIES ABOUND
In line with global trends to meet the rising food demand driven by
population growth, local agricultural research and development (R&D)
could contribute towards higher yields and lower post-harvest losses.
Many regions globally have reached their agricultural land expansion
frontiers, such that increasing agricultural output requires increased
productivity. Optimising yields through intensive input use, new cultivars
and better production practices will hopefully increase agricultural
sustainability and resilience in the longer term.
A growing focal area for R&D, according to agricultural economist Dr
Thulasizwe Mkhabela, relates to zoonotic diseases, food-borne pathogens,
and vaccine development for livestock diseases. There is scope for the
development of agri-tech, particularly those that address the needs of
smallholder farmers.
WATCH NOW
THREATS TO BIOSECURITY
Plant health is intrinsically linked to the survival of our planet and
all that live on it. If we care about the eradication of poverty, the
critical nature of food security, and the importance of nutrition,
then we care about plant health.
Watch The National Science and Technology Discussion
Forum on plant health in SA.
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