By Nico van Burick
There are more agricultural markets in the world than America and China, and South Africa must seek markets and do business with countries that are friendly to us.
This was the general feeling of the participants in a panel discussion at the Nampo Harvest Day in a Nation in Conversation session about South Africa’s international trade relations and the way forward.
The biggest threat is Donald Trump who is back in the White House. He is going to do damage, but everyone has to live with it, said JP Landman, political and economic analyst.
“Agoa (the African Growth and Opportunity Act) is dead and it is no use trying to negotiate it or go to the funeral. Alternatives must be looked at – this is of crucial importance. China and America are not the only two economies in the world. There is a big world out there, and the Middle East is one area that can be concentrated on.”
He said he was not holding his breath about Pres. Cyril Ramaphosa’s undertaking to negotiate with America. Therefore, new markets in other parts of the world must be looked at.
“By that, I do not want to be unsympathetic to companies for whom America’s attitude is a major setback, such as vehicle companies, but we will have to go on.
“There is pressure on South Africa and our agriculture, but since the new democracy, agriculture has proven itself to be one of the greatest success stories in the economy, with farmers now producing twice as much as before 1994, and 50% of that is exported. This is a fantastic achievement and with the pressure that is now there, I also see opportunities.”
Make your own plans
He believes the issue cannot be left in the hands of the state and must be addressed by the business sector in collaboration with the state. This cannot be left only to civil servants, although they can play a supporting role.
“The opportunities are there, but each market segment must determine this for itself and then negotiate greater cooperation with the government. For example, the ostrich industry pays R40 million per year to promote exports, among other things. If these costs are shared, it will help the industry a lot and be negligible for the Department of Agriculture.”
He said a more rational approach is needed in the country. Currently, there are conservatives leaving the country, and liberals who are causing damage with their arrogance. A collaborative approach can be much more successful and also benefit exports.
Difficult to predict the future
According to Dewald Olivier, CEO of the Red Meat Industry Services (RMIS), they have decided to do business with people who also want to do business with South Africa.
“There are very high barriers in some First World countries that do not want us and our red meat there, so it does not help to just continue with the efforts.
“We have friends, and the approach now is to do business with those friends. There are countries that want our products and we want to do business with them – even if they pay somewhat less for our products. At least then we are not left with surpluses. We can market it.”
Louw Pienaar, a senior analyst at the Bureau of Food and Agricultural Policy (BFAP), said he had never experienced an economic policy change on the scale of Trump’s decisions, and it made no sense.
“With all the turbulence, it is very difficult to predict the future and the decisions are coming so quickly, there is no real data to determine what is actually happening.”
Shane Naidoo, a trade specialist at Nedbank (sponsor of the panel discussion), said banks no longer want to focus only on traditional banking services, but also be involved in trade advice. They want to get involved in the entire value chain earlier and not wait until a crisis arises.
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