The South African wool industry is driving an inclusive growth agenda

The South African wool industry is driving an inclusive growth agenda

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I attended the National Wool Growers Association’s 2024 Congress in Gqeberha in the Eastern Cape on 12 June 2024, and emerged with optimism. The South African wool industry remains resilient after a few challenging times in recent years.

First, there was a temporary wool export ban in the critical market, China, which accounts for about 70% of our wool exports in the past few years because of animal diseases, such as foot-and-mouth disease.

China’s reason for this move was to protect their market from the foot-and-mouth disease spreading in the South African cattle industry (not in sheep).

But this was an oversight on the Chinese part. There is a unique protocol to handle the wool shipments and avoid contamination during a foot-and-mouth disease outbreak in South Africa.

South Africa and China agreed on this protocol following the 2019 outbreak, which weighed on exports.

China temporarily suspended South Africa’s wool exports in the second quarter of 2022 and only opened the market in the last week of August 2022.

This resulted in a 21% year-on-year decline in the export value of wool in 2022, to $255-million, according to data from Trade Map. Still, this is notable, accounting for 2% of South Africa’s record agricultural export value of $12.8-billion in 2022.

Positively, 2023 was a recovery year. The wool exports lifted by 11% year-on-year to $284-million. There was an improvement in both value and volumes.

The Chinese market remained open, and the share of wool exported to China improved significantly. Wool accounted for 2% of South Africa’s new record agricultural exports of $13.2-billion in 2023.

The failing municipalities and poorly maintained rural roads across South Africa have also strained the wool industry over the past few years. This remains a challenge even today and requires government intervention in the next administration.

Transformation in the wool industry
The wool industry is among the industries that have also made admirable progress regarding inclusion/transformation. The number of black commercial wool growers has increased significantly over time.

Black farmers account for roughly 11% of the commercial wool output and 13% of commercial mohair output. The National Wool Growers Association, in collaboration with the government, has been the critical driver of progress.

The National Wool Growers Association plans to drive growth and inclusion for the coming years, aligned with the Agriculture and Agroprocessing Master Plan (AAMP). The AAMP will guide the South African government in agriculture and rural development in the next administration. Organised agriculture leaders also support the AAMP.

 South Africa's red meat and wool exports are on a recovery path

The other areas that will require a focus are the continuous release of government land with title deeds to properly selected beneficiaries and the alignment of the blended finance instrument to support these efforts. The government has just over two million hectares that should be released to appropriately selected beneficiaries with title deeds. This should be earmarked for commercial production.

The director-general of the Department of Agriculture, Mooketsa Ramasodi, agrees. In his remarks at the Wool Growers Congress on 12 June he underscored this same message of collaboration and focus on the sector’s untapped potential.

Conversations with farmers
In conversations with farmers, I left with a feeling of optimism. The folks are focusing on growing the industry and strengthening their farming communities. They need every inch of support they can get along the way.

The focus, particularly for the former homeland regions of the Eastern Cape, is on 1) controlling animal disease; 2) improving genetics; 3) strengthening and building infrastructure; and 4) skills and training. The leadership of the National Wool Growers Association identified these areas as the key focus areas as they drive inclusive growth in the industry.

Read more in Daily Maverick: Award-winning Karoo wool farmers win battle to have farms returned after government locked them out

I also had the opportunity to deliver a keynote address. My remarks focused on “Reflections on South Africa’s agriculture 30 years into democracy, and the current realities post-elections”.

The central point was on our progress since 1994, having doubled in value and volume terms as a sector. I also spoke about 10 key areas vital for the leadership of the Department of Agriculture, Land Reform and Rural Development in the next administration.

After my input, director-general Ramasodi concurred with the central theme of my remarks, which also gave me a sense of optimism about the direction of policy and the recovery path of this important agricultural industry.