The Bureau for Food and Agricultural Policy
(BFAP) recently released its annual Baseline
Agricultural Outlook for 2019 to 2028. It is
important to remember that the baseline, as
BFAP explains in the report, does not constitute a
forecast, but instead a benchmark of what could
happen under a particular set of assumptions.
The report is valuable when used as a tool to
determine the major trends that could shape
the future profitability of a certain commodity
or product. It can also be used to determine
how the future might pan out if worse comes
to worst, or how much better the future
might look if positive changes are made.
For example, the report gives a very good
indication of how volumes of certain citrus
products, such as lemons and mandarins, should
increase when massive areas under new plantings
come into production. However, if South Africa
fails to access new export markets, the future of
the local citrus industry may turn sour. If better
partnerships between the industry and government are forged, and if these partnerships
lead to an improvement in the preferential trade environment for South African produce
in key markets, and to essential upgrades in the rail and port infrastructure needed to get
the fruit from the farm to its destination, then the future will be considerably sweeter.
Many of the graphs in the report, especially those indicating producer prices for
commodities over the next decade, are flat, and in real terms, the BFAP projects
that the gross value of agricultural production in 2019 will be similar to the value
recorded in 2015, with projections showing little upswing until at least 2023.
The outlook’s message is that things won’t change unless they change. Yes, this is
obvious, but it seems government does not clearly understand this point. If we want to
see real change in economic growth, employment and the performance of state-owned
enterprises (SOEs), some real changes have to made in how the country and SOEs are run.
As the BFAP report says, the farming sector will continue to perform ‘okay’, but
if we want to see exponential improvement, the type of improvement needed to
achieve the targets of transformation, jobs, growth and land reform that have been
set by the National Development Plan, a “bending of the curve” is required.
As an alternative to the flat future, BFAP suggests the possibility of an alternative
growth path that will yield 12% growth in real terms above the baseline by 2028. “This
alternative path illustrates the gap between the current reality and growth if South
Africa’s true potential is unlocked with respect to its natural resources and its people.”
But bending the curve will not be easy; it will require, to quote BFAP, “very specific and
well-coordinated actions and plans, executed through the committed and combined
effort of the public and private sector with real capital and people to drive inclusive
agricultural transformation and transfer of land in a just and sustainable way”. (^) ▪FW
Bending the curve
Denene Erasmus
Editor
From the Editor
4 farmer’sweekly 30 august 2019
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