South Africa remains an efficient chicken producer in the global context and has consistently produced chicken cheaper than the European Union (EU) countries. This is according to the latest research from the Bureau for Food and Agricultural Policy (BFAP).

The information presented is based on assumptions about a range of economic, technological, environmental, political, institutional, and social factors.

South African agriculture, with certain exceptions, faces slow growth in coming years

Over the past few days, the complex nature of South Africa’s food supply chains has come under the spotlight.

These supply chains are a web of formal and informal interactions between agricultural inputs, logistics, farmers, spazas, bakkie traders, processing plants, shipping, retailing, biosecurity and more. Despite the reference to essential goods and services that need to continue to operate, the announcement by President Ramaphosa of a 21-day lockdown triggered a sharp rise in purchases of food that, according to various retailers, exceeded the volumes that are typically sold over Christmas. Furthermore, the lockdown has caused significant confusion at various nodes in the value chain with regards to what is classified as an essential service and what is not. Initially informal traders were excluded from the list of essential services, which caused a major bottleneck in access to food in many poor neighbourhoods, especially in rural areas. This was rectified in the second amendment to the Regulations on 2 April, when the relevant definition of essential services was changed to include “grocery stores and wholesale produce markets, including spaza shops and informal food traders, with written permission from a municipal authority to operate being required in respect of informal food traders”. This is an important amendment, which allows informal traders such as street hawkers to operate again, but requires a coordinated implementation plan with regard to the issuing of permits and the enforcement of health and safety requirements within essential but informal food trading. On-going cooperation between government and private sector is required to efficiently and effectively remove bottlenecks and enable the continuous operation of all essential goods and service delivery within the food value chain to ensure food security during COVID-19 lockdown.

In its first two briefs on the impact of COVID-19, BFAP provided an overview of the South African food system and food expenditure patterns by consumers respectively. This brief sheds light on the complex nature of the food supply chain and the extent of the essential goods and services required for its effective operation. In his initial speech, the President referred to some of the broader sectors that are exempt from restrictions, but did not provide a comprehensive list of all included sectors at the time. Essential goods or services can generally be defined as those that: • May be bought or acquired primarily for personal, family or household purposes, including but not limited to medicines, food, water or fuel; and • Are necessary for the health, safety, or welfare of consumers. Essential goods and services as defined in Section 213 of the Labour Relations Act (Act No 66 of 1995), and designated in terms of section 71(8) of the Act, are specified as power, health, transport, water and sanitation. For the purpose of the COVID-19 lockdown, an amendment of regulations to the Disaster Management Act (2002) provided increased clarity of food related ‘essential goods’ and these were outlined as: • Any food product, including non-alcoholic beverages; • Animal food; and • Chemicals, packaging and ancillary products used in the production of any food product. April 3, 2020 Bureau for Food and Agricultural Policy (BFAP) 477 Witherite road, Agri hub office park Die Wilgers, 0186 Pretoria www.bfap.co.za This email address is being protected from spambots. You need JavaScript enabled to view it. This email address is being protected from spambots. You need JavaScript enabled to view it. Although the food and related products stated above were included in the amended list of essential goods, the list of “essential services” related to food and food production was less comprehensive.

The essential services classification needs to extend across agriculture and not just food, as agricultural value chains are intertwined and if not managed carefully, will have a direct and negative impact on food security. For instance, cotton and wool are not included as essential products, but they provide cashflow to farmers, and are critical in the sustainability of livelihoods and food security, as, without cash flow, field crops cannot be planted. Both sectors are also critical components of the animal feed industry. It is therefore important that cotton and wool (export) trade be opened in order to support farm incomes. The export of cotton and wool also requires port services in order to facilitate the country’s exports. The foregoing underlines the fact that the “food industry” in South Africa is complex and includes a number of support services which, directly and indirectly, enable the efficient and effective operations of the holistic food value chain, and therefore fits the fundamental definition of essential services. By implication, such services must also be authorised to function normally for the food value chain to continue functioning in an effective manner. From a food supply chain perspective, essential goods and services entail all activities and processes which support the production, processing, distribution, consumption, and waste disposal of food in the system.

The following essential food-related supply chains remain operational: • Agricultural and food-related operations, and all agricultural input suppliers and support services; • Fish operations; • Manufacturing facilities for the processing of food, beverages and essential products; • Warehousing, transport and logistics for food, essential products, and health-related goods; • Ports, roads and rail networks, which will remain open to facilitate the import and export of essential products. It is critical that related inspection and regulatory/ documentation control systems and processes operate efficiently and effectively; • Food outlets – including retail, wholesale, spaza shops, malls for food, and essential products. Figure 1 outlines the broad framework of South Africa’s food supply chain and its various components, including the essential services that ensure the smooth functioning of the country’s food system. It includes multiple cross-cutting services such as electricity, banking, telecommunications, water, security, logistics, sanitary and phyto-sanitary (SPS) functions, and waste disposal, among others. Such services are required across the various components of the food supply chain. Transport, as well as health and safety, are pre-requisites that are essential at each node of the food supply chain; critical additional services at ports include administrative functions that ensure documentation and procedures are adhered to for exported and imported essential goods.

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The total of 2.3 million maize hectares planted in 2019 is only 0.8% below the area planted with maize in 2018, according to the BFAP Baseline Agricultural Outlook for the period 2019 to 2028.

An increase of 16%, 21% and 25% in the gross production value of wheat, barley and canola respectively, according to the BFAP Baseline Agricultural Outlook for the period 2019 to 2028.

Within the citrus and table grape industries, the number of hectares under production has seen tremendous growth over the last couple of years, according to the BFAP Baseline Agricultural Outlook for the period 2019 to 2028.

Over the past ten years, the number of milk producers in South Africa has declined by 65%, from 3551 in January 2009 to 1235 in January 2019, according to the BFAP Baseline Agricultural Outlook for the period 2019 to 2028.

This piece draws on recent findings on mechanization in Sub-Saharan Africa and reflects on how these trends can play out on farms and in the rest of the value chain over the next 20 to 30 years.

According to the recently launched “Bureau for Food and Agricultural Policy (BFAP) Baseline Agricultural Outlook 2019–2028”, SA’s agricultural sector needs to do more to support the targets of transformation, jobs, growth and land reform that have been set by the National Development Plan (NDP).

On Monday 23 March 2020, the President announced that, starting Thursday at midnight, the country would go into a 21-day lock down period. All South Africans will have to stay at home for the next three weeks unless they are involved in essential goods and services, including the provision of food.

This is a critical message to all food and feed producers, traders, processors, logistic companies, ports, farmers and input suppliers. South Africans are used to relying on a highly competitive and effective food system, which will now be tested to its limits, especially in rural areas where critical information is lacking and we have a big concentration of vulnerable people. Effective collaboration and coordination between communities, the private sector and government will be decisive and researchers and analysts will have to support decision makers with accurate information and analyses.

In this second brief on the impact of COVID-19, we present an overview of food expenditure in South African households

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In independent research centre, the Bureau for Food and Agricultural Policy (BFAP), has published an overview of five key foods produced in South Africa, as part of its analysis of food and agricultural aspects of the Covid-19 pandemic crisis.

Most countries around the world have responded to the spread of the coronavirus through large scale lockdowns. With the global economy coming to a near stand-still, trade in food and related essentials has been prioritised to ensure food security.

COVID-19 has caused widespread turmoil and volatility since the start of 2020 and the measures implemented to contain it have sent shockwaves throughout the global economy.

Experts in the agricultural sector are confident that the introduction of level 3 lockdown restrictions will bring relief to the food supply chain, which has experienced significant disruptions over the past two months.

Professor Ferdi Meyer, Managing Director of the Bureau for Food and Agricultural Policy (BFAP), says that disruptions experienced by the agro-food chain during levels 4 and 5 include decreased sales as a result of restaurant closures, lower overall demand due to reduced economic activity, and challenges at ports causing considerable congestion in exports.

‘However, since mid-May, most agribusinesses reported that they were operating at 80% capacity and weren’t wasting significantly more product compared to the business-as-usual scenario,’ he says.

 Despite these disruptions, Dr John Purchase, Chief Executive Officer of the Agricultural Business Chamber (Agbiz), says that South Africa’s agricultural sector is not expected to be as hard hit by the Covid-19 pandemic as the global agricultural sector; in fact, we could see a 10% year-on-year recovery in GDP in the sector for 2020 because of bumper grain and fruit harvests.

For example, the current maize harvest is up 38% from the 2018/19 harvest and is the second-largest harvest on record. This essentially means that South Africa would remain a net exporter of maize and could also export maize beyond the African continent to markets such as Japan, Taiwan, Vietnam and South Korea that were not prominent in previous years,’ says Purchase.

However, both Meyer and Purchase agree that medium-to-long-term strategies are needed to further stimulate agricultural growth and job creation in South Africa. These include expansion of primary agriculture in the regions with higher poverty levels such as KZN, the Eastern Cape and Limpopo Province; improvement of land governance in the former homelands; enhanced ability of state funding institutions to attract private capital; and improved local government delivery.

Purchase and Meyer will discuss the impact of Covid-19 on South Africa’s agricultural sector as well as learnings from the pandemic and the way forward in an agriculture webinar hosted by Nedbank Business Banking on Thursday, 4 June. To register, please click here.

THE 2018 EDITION of the BFAP South African Baseline presents an outlook of agricultural production, consumption, prices and trade in South Africa for the period 2018 to 2027, within the context of the current uncertainty regarding land reform policies. The information presented is based on assumptions about a range of economic, technological, environmental, political, institutional, and social factors.

Official food inflation data in South Africa has traditionally been released with a 3-week lag, based on food price data in the preceding month.

The latest estimate from the Crop Estimates Committee (CEC) points to a maize crop of 15.51 million tons in 2020 – of which 9 million tons is white maize.

On 1 June, South Africa moved from Level 4 lockdown to Level 3 lockdown.

The high-frequency data across the major economies and the developing world underscore the view that the world will experience one of the sharpest declines in economic activity in history.