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Opening an exhibition on the fourth industrial revolution at parliament recently, science & technology minister Mmamoloko Kubayi-Ngubane stressed that SA plans to use its opportunities to deal with poverty, unemployment and inequality — but also that the country needs new skills for the new industries and markets that will emerge.

A case in point is the fruit sector which, as a high-value and labour-intensive industry with high export potential, is central to agriculture’s contribution to economic growth.

Adopting and adapting to technological changes associated with the fourth industrial revolution could have huge implications for the industry’s global position. While the country is an established world player in specific fruits, it lags behind competitors such as Mexico, Peru and Chile. SA is also yet to maximise the substantial opportunities for export growth in high-value and in-demand fruits such as berries and avocados.

Research by the Centre for Competition Regulation and Economic Development at the University of Johannesburg shows that harnessing technological change is necessary for producers to keep up with escalating standards; to comply with the many — and complex — plant health requirements; and to adapt to climate change and environmental constraints.

Our research shows that key technologies in the global fresh fruit industry that must be leveraged by local producers to remain relevant include electronic digital platforms and the internet of things, biotechnology, and sorting and cold storage equipment. Collectively, these offer technological solutions to SA’s key challenges in the fruit industry.

While mainly large players are adopting these technologies, an industry-wide scaling can benefit participation and market access for black farmers. The growing number of increasingly complex plant health requirements make it difficult for producers to comply and access export markets. The current paper-based and manual systems of export certification require technological solutions to cut down time wasted with frequent trips to the government offices to sign paperwork, and eliminate human errors associated with manual data capturing.

A promising local development has been an electronic data-sharing platform jointly developed by Fruit SA and the department of agriculture, forestry & fisheries. The platform, called Phytclean, captures data on orchards and growers’ phytosanitary records for the issuing of electronic certificates. After a pilot phase in the citrus industry, electronic certification will be implemented in June 2019 from SA to the Netherlands.

Another core challenge in exporting fresh fruit is the high levels of congestion and delays at SA’s main ports, which reduce shelf life drastically. The situation is particularly acute during peak seasons of major export products such as citrus. In 2011, the World Bank estimated that delays at the Durban port cost the local citrus industry $10.5m per season.

With delays at the main ports expected to increase as fruit export volumes grow, integrated digital platforms that link local producers’ in-house systems to ports, logistics companies and shipping lines are crucial to foster better planning and faster movement of fruits. Digital solutions that reduce the costs of logistics and ease the export process could increase the value of exports and help new players to enter export markets.


The European avocado market is in a transition phase. The last volumes of Chilean, Spanish, Israeli and Mexican products are still on the shelves, while Peru, Kenya, Brazil and South Africa are slowly taking over the market. Avocados remain incredibly popular. A great deal is being invested in the sector worldwide, both in promotions and in new plantings. More and more countries are exporting to China.


Increasing sugar imports and the so-called sugar tax are significant risks that may impact on the profitability of the agricultural sector in the short to medium term, says Land Bank research analyst Gilberto Blacuana.

He adds, however, that these risks can be mitigated through higher import tariffs and investment in alternative uses of sugarcane, such as ethanol production.

“The global sugar market is distorted by production and export subsidies, which create an oversupply of sugar. Additionally, almost all countries have tariff protection in their domestic sugar industries.”

Blacuana says data from the South African Revenue Serviceshows that sugar imports from India have increased substantially in recent months.


He says the Indian government offers its sugar producers a $150/t rebate or subsidy on sugar exports.

“This unfair practice, or dumping, makes the Indian sugar [industry] competitive in the global market, thus depressing global prices. This unfair practice has prompted Brazil, the world’s largest sugar producer, and Australia, to lodge a formal complaint against India at the World Trade Organisation.”

This is especially relevant since markets compete for share in the massive sugar importer, the US, which increased its sugar imports by 58.3% between the 2015/16 and 2016/17 season, from 470 000 t to 744 000 t.

Moreover, Blacuana says South Africa’s export data shows that sugar exports had increased by 54.5% to 1.2-million tonnes in the 2017/18 season. The proportion of South Africa’s exports to domestic production increased from 13.6% in the 2016/17 season, to 37.3% in the 2017/18 season.

“Should the South African government not take further steps to protect the local market, the domestic market will come under renewed pressure from sugar imports from India. The industry has called for the tariff to be increased from R4 500/t to about R7 000/t.”

Meanwhile, Blacuana says the Health Promotion Levy, or sugar tax as it is better known, which was implemented in April 2018, involved a 5.2% increase in tax on sugar sweetened beverages.

Estimates from the South African Sugar Association indicate that the revenue lost since the implementation of the sugar tax is about R1.3-billion, Blacuana points out.

“While it is difficult to quantify the impact of imports and the sugar tax on employment, the South African Cane Growers Association estimates that the sugar tax is likely to lead to about 10 000 people losing their jobs in the primary level of the sugar value chain; however, this figure does not consider the impact on job losses in the milling and beverage industries. The sugar industry employs about 350 000 people.”

However, the African News Agency earlier this week reported that the National Treasury’s Mpho Legote had stated that any current estimates are guesswork and that the government was undertaking an assessment of the impact of the sugar tax.


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