BFAP Agricultural Outlook: The Good, the Bad and the Ugly

Dr Mmatlou Kalaba from the Bureau for Food and Agricultural Policy (BFAP) provided a critical assessment of the agricultural landscape at the African Farming Agri-Development Imbizo on Thursday 27 March. His analysis highlighted key trends, challenges and opportunities shaping South Africa’s farming sector. We unpack the most crucial statistics and insights from his address.

By Marieke Snyman, senior journalist at African Farming

The Good: Resilience and growth in key sectors

Despite economic pressures, South African agriculture has shown remarkable resilience. The sector has grown by an average of 7% per annum over the past five years, significantly outpacing the national economy. This growth is largely driven by high-value industries, such as horticulture and animal production.

Horticulture booming

The fruit sector, particularly citrus, table grapes and avocados, has expanded its export footprint. Citrus exports alone grew by 10% in 2023, with projections indicating further increases as new markets open. Similarly, macadamia and avocado exports have surged, benefiting from rising global demand.

Dr Kalaba emphasised the importance of this trend, stating, “Our horticulture sector remains a shining star in agriculture, proving that with market access and quality produce, South African farmers can compete on the global stage.”

Animal production holding steady

Livestock production remains a cornerstone of the sector, with beef, poultry and dairy maintaining stable output levels. The poultry industry has expanded production by 5% year-on-year, despite challenges such as loadshedding and input costs. Meanwhile, the wool industry rebounded strongly following China’s lifting of import restrictions, boosting farmer incomes.

“The livestock sector is resilient, but we must address rising costs and disease risks to ensure long-term sustainability,” said Dr Kalaba.

The Bad: Cost pressures and market volatility

While growth in some areas is promising, the sector is grappling with severe financial pressures.

Input costs soaring

The cost of key inputs, such as fertiliser, fuel and electricity, has surged. Fertiliser prices spiked by 30% in 2022, driven by geopolitical tensions, though they have since moderated slightly. Electricity costs have also risen by 18%, exacerbating profitability concerns for energy-intensive farming operations.

“With production costs rising at an unsustainable rate, farmers must adopt innovative solutions to remain competitive,” he warned.

Logistics and market disruptions

Port inefficiencies and transport challenges continue to hinder exports. Delays at major ports have led to losses estimated at R7 billion annually, affecting perishable goods like fruit and dairy. Additionally, deteriorating rail infrastructure has increased dependency on road transport, further inflating costs.

“Improving infrastructure efficiency is crucial – our farmers produce world-class products, but logistical bottlenecks are holding them back,” Dr Kalaba remarked.

The Ugly: Climate risks and policy uncertainty

Perhaps the most concerning issues facing the sector are climate variability and policy instability.

Erratic weather patterns

South Africa has experienced increasing climatic extremes, from severe droughts to unexpected floods. The agricultural sector recorded R10 billion in losses due to extreme weather events in 2023, with staple crops such as maize and wheat particularly affected. Water security remains a pressing concern, with dam levels in key production areas declining by an average of 15% over the past decade.

“The unpredictability of climate change means farmers must invest in water efficiency and climate-smart farming techniques,” Dr Kalaba cautioned.

Policy and land reform uncertainty

Uncertainty surrounding land reform policies continue to affect investor confidence. While land redistribution remains a government priority, slow implementation and a lack of clear funding mechanisms create uncertainty for commercial farmers and agribusinesses. Additionally, concerns around biosecurity regulations, especially in the poultry and beef industries, have made international trade negotiations more complex.

According to Dr Kalaba policy clarity is essential to drive investment in the sector.

“We need a balanced approach that ensures transformation while maintaining agricultural productivity.”

Looking ahead: Strategies for resilience

To navigate these challenges, Dr Kalaba emphasised the need for innovation, collaboration and policy clarity. Farmers are increasingly turning to precision agriculture and alternative energy solutions to mitigate rising costs. Expanding export market access and improving infrastructure efficiency will also be critical in sustaining sectoral growth.

As South African agriculture moves forward, balancing immediate challenges with long-term sustainability will be key. The sector has proven its ability to adapt and thrive, but decisive action is needed to secure its future in an increasingly unpredictable global landscape.