The growth prospects in Mzansi’s agriculture sector for 2021 are looking positive, predicts Dr John Purchase, chief executive of the Agricultural Business Chamber of South Africa (Agbiz).
Purchase indicates that growth in the sector will be driven by the weather conditions and the global prices.
“Conditions are good. The prices are generally good, and the global prices encourage the farmers to produce and to plant. Secondly, conditions are also good in terms of crop growth. We had good early rains over the major regions of the summer rainfall areas in the Western Cape and in most of the areas in the country. The irrigation dams are fairly full, so prospects are good for 2021,” he says.
Availing market access to small-scale farmers in South Africa is a critical element that will sprout more growth in the sector.” – DR JOHN PURCHASE
Purchase reveals that even the growth in 2020 exceeded their expectations in the wake of the covid-19 pandemic.
“For 2020, because we had generally good weather conditions and especially in the Western Cape, which is a very big producer, they produce 25% of the agriculture GDP. We also had our second biggest maize crop ever in our summer rainfall areas and that’s plays a huge role in agricultural GDP and in the value chains subsequently. Because it goes into animal feed, into the dairy industry, beef industry and into the poultry industry. And the value add that you get from maize and export parity provides a lot of value addition opportunity and that is what you measure in GDP.”
However, Purchase believes more growth opportunities could be provided in the sector if government advanced the regulatory framework that would enable agriculture to exploit the potential cannabis market.
“At this stage, the cannabis market is a potential market in South Africa. We have been too slow to develop a regulatory framework. You need a regulatory framework to manage cannabis because of the drug effects that you have because of it. But I am a big believer in cannabis and the medicinal properties that it brings because I saw it with my mother. She had to use it when she had cancer before she passed on, but it does work.”
Purchase adds, “We know it works it has been well published and recognised by scientist. But first before we get into investing in it, we need a regulatory framework within which investments can be made. Countries like Canada have moved way before us and the problem is, they can then export to other markets which we should actually have access to,” he says.
Opportunities to exploit cannabis market
Purchase reveals that delaying the regulatory framework diminishes our opportunity to exploit this market and that they are in discussions with various organisations to urge government to speed up the process.
“We interact formally, either bilaterally or directly with the department or with ministers also through Business Unity South Africa where we are very involved and also through the National Economic Development and Labour Council (Nedlac).
“Nedlac is where all policies and legislations must come for interaction with social partners. That includes government, business, labour and community and we must push them to put policies in place and we can do that also through Nedlac to ensure that we create this opportunity that it does present.”
He believes that availing market access to small-scale farmers in South Africa is a critical element that will sprout more growth in the sector.
“Market access is important, as is access to finance and access to technology and information. Market access is an absolutely critical issue, and we are working very hard to create models. Many of our bigger agribusinesses like Sernick, the beef industry and the avocado industry have strong procurement models to procure from small scale or emerging farmers.
“So, we need to expand that and also train those farmers and make sure they have the right quality, and the right sanitary issues and quality standards are met. These are the models we are currently working with at the moment and we are trying to roll these out on a far bigger scale,” he says.