e-Newsletter
44/2021
12 November 2021
Agbiz welcomes the Medium-Term Budget Policy Statement
Agbiz welcomes the Medium-Term Budget Policy Statement (MTBPS), which showed continuity between former Finance Minister Tito Mboweni and his successor Enoch Godongwana. “Growth and reforms” was a key theme of Minister Godongwana’s statement. The National Treasury expects the South African economy to grow by 5.1% in 2021, from a 6.4% contraction in 2020. The emphasis on the government’s commitment to fiscal consolidation and structural reforms to lift economic growth is a welcome move. In terms of structural reforms, the focus on improving the efficiency of South Africa’s logistics infrastructure to support export growth is one of the vital positive interventions for South Africa’s agricultural sector. “Our country currently exports nearly half of its agricultural products in value terms, and with the expected increase in production in the coming years, efficient ports and border posts will be key to sustaining South Africa’s agriculture,” says Dr John Purchase, Agbiz CEO. Please click here for the full Agbiz media statement. The minister's maiden medium-term budget has been cautiously welcomed by economists and analysts. In a media statement, Business Unity South Africa (BUSA) says Minister Godongwana "demonstrated the need for prudence and to stay the course on managing scarce resources". Commenting on the MTBPS, North-West University Business School economist Prof. Raymond Parsons says: "In a measured policy assessment by Finance Minister Enoch Godongwana in his first MTBPS he confirms that SA’s public finances remain in safe hands and that there will be broad continuity in fiscal policy." Please click on the links to peruse.
BUSA on Eskom leadership and load-shedding
In a media statement issued earlier this week, Business Unity SA (BUSA) rejected calls for Eskom's leadership to step down. “The fundamental issue lies in years of irreversible damage inflicted on the utility over more than a decade of state capture and corruption, which resulted in critically undermaintained plants,” said BUSA CEO Cas Coovadia. “Despite the deep maintenance programme, the trend shows an increasingly worsening energy availability factor with more and more faults identified and more unplanned outages because of the ageing and poorly maintained plants. It does not help to exacerbate the ongoing operational crisis by creating a leadership and governance crisis at Eskom." Please click here for the full BUSA media statement.
Myths and truths around South Africa’s recent renewable energy auction
South Africa’s department of mineral resources and energy recently announced its choice of companies to build and operate a new “batch” of renewable energy projects. This is part of a programme in which the government invites private companies to compete for contracts to produce electricity and sell it to the national utility, Eskom. In this most recent auction of contracts, known as “bid window 5”, 25 projects – 12 solar and 13 wind – totalling close to 2,600 MW of capacity got the go-ahead. These projects are expected to come online in the next two to three years. The contracts last for 20 years. Read more in the linked article, first published on The Conversation.
POLICY AND LEGISLATION
Vacancy at Agbiz for manager of legal intelligence
Agbiz invites suitably qualified applicants to apply for the position of manager: legal intelligence, commencing on 1 January 2022. The incumbent needs a legal qualification as background but the position differs vastly from legal practice. Agbiz conducts policy advocacy on behalf of its members and requires someone who can convert legal knowledge into legal intelligence by analysing draft policies and legislation to determine their relevance to the sector, the impact it would have on agribusinesses and to formulate counter-proposals and advocate for amendments to draft policy and legislation in line with the organisation’s mandate. Please click here for more information.
AGRIBUSINESS RESEARCH
Rising domestic and international agricultural input costs set to
squeeze both farmers and consumers
The dominant message about SA’s agriculture in the past few months has been of a thriving sector, having grown by 13.4% year on year in 2020 and expected to grow a further 7.6% in 2021. The large harvests of 2020 improved farmers’ finances and allowed some to replace old machinery. Tractor and combine harvester sales expanded by double digits in many months after mid-2020. Yet, this is not a complete picture of the financial conditions in this sector. Rising input costs — higher fuel, labour, fertiliser, energy and agrochemical costs for those in field crops and horticulture — are squeezing producers and calls have been made for some sort of intervention. The challenge, however, is that South Africa has very limited control as many of these issues are driven by international events over which South Africa has very little influence. By investigating the factors that weigh on the cost of inputs, we see that there is little policy space to effect a change and these must also be carefully considered. Read more in the linked article by Agbiz chief economist Wandile Sihlobo and Agbiz head of Legal Intelligence Theo Boshoff.
Former homelands have been left behind to occupy the periphery of progress
South Africa’s agriculture sector has been the mainstay of economic growth even at the height of Covid-19. Its underbelly, however, is its dualism and lack of inclusiveness. The former homelands are left behind. They occupy the periphery of agricultural progress. This reality hits you when you drive from the southern parts of KwaZulu-Natal to the northern parts of the former Transkei. The more established commercial farming parts in some regions of KwaZulu-Natal blossom with green pastures and bountiful crop farming. In contrast, the parts that fell under the homeland system are fallow even though they are sitting on arable land and a potential source of wealth. The government’s interventions to prioritise agriculture in the past two decades have not led to meaningful improvement of the agricultural economy in the former homelands, more pointedly in the Eastern Cape’s Transkei region. Read more in the linked article by Wandile Sihlobo.
OTHER NEWS
World agricultural production
The World Agricultural Supply and Demand Estimates (WASDE) is prepared and released by the World Agricultural Outlook Board (WAOB). The report is released monthly and reflects official USDA estimates released in the monthly World Agricultural Supply and Demand Estimates (WASDE). It provides annual forecasts for the supply and use of US and world wheat, rice, coarse grains, oilseeds, and cotton. The report also covers US supply and use of sugar, meat, poultry eggs and milk, as well as Mexico’s supply and use of sugar. The WAOB chairs the Interagency Commodity Estimates Committees (ICECs), which include analysts from key USDA agencies who compile and interpret information from USDA and other domestic and foreign sources to produce the report. Please click here to peruse.
Pacific remains at La Niña alert
The ENSO Outlook remains at La Niña alert. La Niña is likely to continue through the Northern Hemisphere winter 2021-22 (~90% chance) and into spring 2022 (~50% chance during March-May). La Niña strengthened in the last month, with below-average sea surface temperatures (SSTs) evident across most of the equatorial Pacific. In the last week, all of the Niño index values were between -0.7°C and -1.0°C, with the coolest anomalies in the Niño-3.4 region. Below-average subsurface temperatures (averaged from 180-100°W) were roughly the same amplitude at this time last month and reflected the prevalence of below-average temperatures in the eastern Pacific Ocean. Low-level easterly and upper-level westerly wind anomalies were again observed over parts of the equatorial Pacific, although weaker than last month. Tropical convection was suppressed near and west of the Date Line and was slightly enhanced over Indonesia. The Southern Oscillation Index and Equatorial Southern Oscillation Index remained positive. Overall, the coupled ocean-atmosphere system was consistent with La Niña. Please click here to peruse.
South Africa’s mango crop down by 15%
Recent good rain in Limpopo has been beneficial to mangos, although some orchards experienced a degree of wind damage which should be minimal. Prospects for the mango season differ over the various production regions, and it’s difficult to give a firm estimate at this stage, notes Derek Donkin, CEO of Subtrop, the industry organisation for mangoes, litchis and avocados. The major harvesting only takes place from December but the first Tommy Atkins mangoes have arrived on the market. Read more in the linked article first published on Fresh Plaza.
South African citrus exports 2021 confirm sustained industry growth
As South Africa’s 2021 citrus season draws to a close, it has become clear that there was export growth, even during these challenging times for South African. It is expected that the industry will grow by 500 000 tons over the next three to five years. In the midst of this growth, logistics to ensure that citrus can be exported timely and in good condition is still a challenge Please click here for the Production and Export Volume Logistics Report 2021, prepared by Mitchell Brooke of the Citrus Growers' Association of Southern Africa (CGA).
The USDA forecasts continued growth in South Africa's deciduous fruit production 
The United States Department of Agriculture (USDA) released its annual report on South Africa's deciduous fruit production for the 2021/22 season, forecasting a continuous growth in apples, pears and tables grapes production. This is on the back of favourable weather conditions, new areas coming into production and high yielding varieties. For example, the USDA forecasts a 1% y/y increase in South Africa's apple area plantings in 2021/22 to 25 400 hectares. This will likely be in the Northern and Western Capes regions. The production of apples is also expected to lift by 1% y/y to 997 000 tonnes. In pears, the area plantings will also likely increase by 1% y/y in 2021/22 season to 13 000 hectares. There is generally an increase in investment in this fruit in the past few years, in line with growing demand in the global market. The favourable weather conditions will likely boost production by 1% y/y to 425 000 tonnes in the 2021/22 season. Moreover, the USDA sees South Africa's table grapes area increase by 2% y/y in 2021/22 to 20 900 hectares. The Agency noted that "this is based on new orchards and varieties coming into full production, new production areas in the Northern Cape, and some wine grape areas under financial stress in the Western Cape being converted to table grapes". The production could also increase by 2% y/y to 370 000 tonnes in 2021/22. Please click here to peruse.
Overall trade improved in the second quarter of 2021
South Africa maintained a strong trade balance in the second quarter of 2021, with a surplus of R163 billion, a substantial increase from the roughly R30 billion reported in the second quarter of 2020. The large surplus is mainly the outcome of a surge in mineral prices for ores and platinum. Overall trade improved in the second quarter of 2021 following an 18% decline in exports and a 26% decline in imports in the second quarter of 2020 as a result of the Covid-19 pandemic. Total imports grew by about 28% to R328 billion in the year to the second quarter of 2021, while exports grew by about 71% to R491 billion. Although still slightly lower than reported in the second quarter of 2019, imports have returned to their general trend. In contrast, exports surged to a new high, driven by high mineral prices, including a more than R30 billion increase in ore export revenue between the second quarter of 2019 and the second quarter of 2021. Compared to the second quarter of 2021, ore export revenue increased by about R37.7 billion. Exports will likely decline as mineral prices decline. TIPS Import Tracker provides an overview of import patterns and looks at the causes of surges in imports, and their likely impact on industry.
The great organic food fraud
More than in most retail transactions, the organic consumer is buying both a thing and an assurance about a thing. Organic crops are those which, among other restrictions, have been grown without the application of certain herbicides, pesticides, and fertilizers. Close scrutiny of a crop of non-organic tomatoes might reveal that they had been exposed to these treatments. But it might not. And an organic product can become accidentally tainted if proscribed chemicals carry across from a neighbouring crop. The rules forgive such contamination—to a point. Testing for residues is not common in American organic regulation. The real difference, then, between a ton of organic soybeans and a ton of conventional soybeans is the story you can tell about them. The test, at the point of sale, is merely a question: Was this grown organically? That’s not like asking if a cup of coffee is decaffeinated. It’s more like buying sports memorabilia—is this really the ball?—or like trying to establish if a used car has had more than a single, careful owner. Read more in the linked article, first published in The New Yorker.
Giant in agriculture celebrates centenary
A prominent and well-known figure in the agricultural sector, Inus Van Rooyen, celebrated his 100th birthday on 8 November. He was born in Greytown on 8 November 1921, and spent many years in Dundee. In 1954, he was appointed as manager of the Natal Agricultural Cooperative in Dundee and played a major role in the South African agricultural sector for almost 50 years. He served as director of the Cooperative Council of the South African Agricultural Union (SAAU) – the precursor of Agbiz – from 1976 and was promoted to deputy director of SAAU. His son, Johan van Rooyen followed in his footsteps and was involved in the big change during deregulation from Cooperative Council, to Agricultural Cooperative Business (ACB), which then quickly changed to Agricultural Business Chamber (ABC). Agbiz congratulates him on this extraordinary milestone and wishes him many more years of good health and happiness.
Invitation to SMME: Value-Added-Tax (VAT) Webinar
.The Tax Administration Act states that all registered taxpayers and traders are required to comply with all tax obligations for the various tax types for which they are registered.
To assist taxpayers, SARS will host a virtual webinar for Small, Medium and Micro Enterprises (SMMEs), which will provide information on Value- Added-Tax (VAT). When taxpayers have clarity and certainty about their tax obligations, they will be in a better position to be compliant in their tax matters.
The following topics will be covered:
  • Registration requirements
  • VAT Filing categories
  • Payments
  • Refunds
  • Deregistration
The details of the event are as follows:
Date: Thursday, 18 November 2021
Time: 17:00 - 19:00
Platforms (Virtual): Zoom and YouTube 
Please register in advance for this webinar:
Passcode: 611514
Meeting ID: 928 2433 8462
After registering, you will receive a confirmation email with information on how to log in to the webinar.

MEMBERS' NEWS
Get the latest news from the FPEF
Keeping it Fresh, the newsletter of the Fresh Produce Exporters Forum (FPEF) contains all the recent relevant news and developments. Please click here for the latest edition.
Weekly newsletter from CGA
The Citrus Growers' Association of Southern African, shares the latest news in the citrus industry in its weekly update - From the desk of the CEO. Please click here to peruse.
The latest news from the pork industry
Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation (SAPPO) newsletter, SAPPO Weekly Update.
UPCOMING EVENTS
We are very excited to announce that the Agbiz Congress 2022 will take place from 22 to 24 June 2022 at Sun City. Our congress marks the gathering of more than 400 stakeholders in the Southern African agricultural and agri-food industry. As in the past, we are planning to bring together CEOs, senior management and board members, as well as key delegates from government, producer organisations, processors, academia and various other major role players for the Agbiz Congress 2022.

With the continued support from our sponsors, we will bring you a cutting-edge congress with world-class speakers. With the renewed possibility of hosting a face-to-face congress, we can assure you that the Agbiz Congress 2022 will be bigger and better than before and promises to be the event not to be missed.

Delegates can now register for the Agbiz Congress 2022. In-line with international best practices, delegates will be required to be fully vaccinated. If you have already registered, our organisers will be in contact with you to verify your vaccination status. If you haven’t registered yet, please don’t hesitate to sign up for early bird registration at only R4 110 for members and R4 630 for non-members. Please click here to register.
Intra-African Trade Fair 2021
15-21 November 2021 | Durban

2nd Drone Users Conference: Conservation and Agriculture
29 November-1 December 2021 | Elsenburg | Stellenbosch

Agbiz Congress 2022
22-24 June 2022 | Sun City
AGBIZ MEMBERSHIP
Why join Agbiz?
  • Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
  • Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.
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