1 / 51

Overview on South African Agriculture and Agribusiness

Overview on South African Agriculture and Agribusiness. USA NAMPO Exhibitors 15 May 2011 John Purchase. Content. Introduction SA Agriculture SA Agribusiness Prospects & Challenges. Introduction. Well developed commercial sector and subsistence oriented sector – dual economy

rpeggy
Download Presentation

Overview on South African Agriculture and Agribusiness

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Overview on South African Agriculture and Agribusiness USA NAMPO Exhibitors 15 May 2011 John Purchase

  2. Content • Introduction • SA Agriculture • SA Agribusiness • Prospects & Challenges

  3. 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 - Nearworld-class infrastructure - Counter-seasonality to Europe - Biodiversity - Trade agreements - Competitive input costs - Access to latest technology & innovation

  4. 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)

  5. Contribution of Primary Agriculture to GDP (Source: Statssa) % Graph: ABC

  6. SA economic growth: Tradable goods sectors lag the non-tradable goods sectors Source: StatsSA Graph: ABC

  7. Source: AMT, 2011

  8. FAO Food Price Index Source: FAO

  9. Inflation Source: AMT, 2011

  10. Exchange rate Source: AMT, 2010

  11. SAARF LSM Segments: Proportion of SA adult population and average monthly householdincome in 2009 Source: SAARF (2010a) & BFAP, 2010

  12. 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

  13. SA Resource Situation • 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

  14. Global warming: Effect?!

  15. Content • Introduction • SA Agriculture • SA Agribusiness • Prospects & Challenges

  16. Commercial Agric Census 2007 Source: StatsSA

  17. Performance of SectorGross Value of Production in R million R'million Source: DAFF, 2010.

  18. Performance of Sector Source: DAFF, 2009.

  19. Net farm income Source: AMT, 2011

  20. Cost price squeeze Source: AMT, 2011

  21. SA Agricultural Sectors • Field crops - Maize (Corn), wheat, sugar, sunflower, soybean, groundnuts, dry beans, etc. • Horticulture - Wine/Viticulture, Citrus, Deciduous fruit, sub-tropical fruit, table grapes, vegetables • Animal production - Poultry, beef, dairy, mutton, wool, mohair, ostrich, game/venison

  22. Field crops • 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

  23. Horticulture • 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

  24. 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

  25. SA Wine Production, Consumption & Exports Source: BFAP, 2010

  26. VegetablesValue of total production in 2009:US$1.2 billion

  27. Source: DAFF Graph: ABC

  28. FruitValue of production (2009): Deciduous fruit: US$0.9 billionCitrus: US$0.7 billionViticulture: US$0.4 billionExports (2009):Wine: US$728 millionCitrus: US$667 millionTable grapes: US$380 millionApples: US$365 million

  29. Source: BFAP, 2010

  30. 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

  31. SA Meat consumption Source: BFAP, 2010

  32. Content • Introduction • SA Agriculture • SA Agribusiness • Prospects & Challenges

  33. 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

  34. South African Agricultural Trade (Source WTA & GTA, USDA-FAS) (US$ billions) 200720082009 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 % of total SA imports 5.3% 5.2% 6.4%

  35. Major agricultural products exported: (US$ millions) 200720082009 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

  36. Major export destinations (2009)

  37. Major agricultural products imported: (US$ millions) 200720082009 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

  38. Major countries imported from (2009)

  39. Content • Introduction • SA Agriculture • SA Agribusiness • Prospects & Challenges

  40. South African Agriculture: Prospects and Challenges

  41. 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.

  42. 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

  43. 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 commer- cial 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. • New global investors looking to Africa for food production – major development.

  44. 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.

More Related