Agriculture cares
To have certainty about sufficient and nutritious food is of great value to any country, more so for a diverse society such as that of South Africa.
The DuPont report (see here) shows that South Africa is the African country with the highest level of food security. According to this company's 2014 global food security index, South Africa stands at 61.1 points which compares well with that of its BRICS partners. India stands at 48.3 points, China at 62.2, Russia at 62.7 and the food giant Brazil at 68.1. Most African countries score between 30 and 40 points on this index. Developed countries lead the way with more than 80 points.
The South African agricultural sector is also a successful competitor in export markets. In 2013 exports amounted to R72.5 billion, which are R15.2 billion more than agricultural imports. Should favourable production conditions prevail, and considering the weaker Rand, the sector can improve on this performance in 2014 and 2015. Current conditions are favourable for field crop production. Irrigation agriculture, which contributes 25 percent to the value of agricultural production, also has good prospects. Nationwide dams are on average 80 percent full, and in the larger systems, the situation is even more favourable.
Consumers can look forward to a slowdown or even decline in food price inflation. In November 2014 food price inflation was still 6.5 percent, but the producer price index for agriculture, forestry and fisheries was 2.3 percent. The latter should within a few months have a diminishing effect on food price inflation.
One of the factors contributing to this trend is the decline in the price of fuel. Expenditure on fuel amounts to 14 percent of agriculture's expenditure on intermediary goods and services. Indications are that the recent and expected further fuel price cuts will reduce this cost element. The rest of the food value chain should, however, also pass on cost-savings to the benefit of consumers.
Continued investment is probably the best guarantee for continued food security and sustainable competitive production. While there are challenges that the industry must overcome to maintain its competitiveness and at the same time contribute to the industries' transformation and the social upliftment of workers and their families, there is confidence in the future of the industry.
The 8.4 percent increase in the value of investment in agriculture in the past year is indicative of such confidence, backed by a 10.1 percent increase in the value of land and fixed improvements and 9.9 percent in that of machinery, implements and vehicles. This is a positive trend which should be built upon to make South Africa an even better country to all its people.
Statement issued by Agri Wes-Cape/Agri SA, January 12 2015
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