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SA Farming: Covid-19 and beyond

By Dr Thulasizwe Mkhabela

JOHANNESBURG – It has been a month since the declaration of Covid-19 as a pandemic and as South Africa is in the midst of the  21-day national lockdown. The number of confirmed Covid-19 cases has now surpassed 1600 with 12 confirmed deaths at the time of writing this article.

South Africa has received accolades on its handling of the situation from renowned bodies such as the World Health Organisation and the British Broadcasting Corporation.

The agri-food sector, (farming community, largely, and the government have given the assurance that the country is doing all that could be done and all endeavours will continue to be undertaken to ensure adequate food supplies during the Covid- 19 pandemic and the ensuing lockdown.

However, there is the ever-present real threat that, although sufficient food supplies may be available at the national level, access to food may become extremely difficult for some. The most vulnerable are the poor, especially in remote rural areas in the country.

There is now consensus that there will be a high human toll because of the pandemic, despite the gallant efforts that South Africa has expended. The ongoing closures and lockdown have created logistical bottlenecks that reverberate and permeate throughout the long value chains in the economy. The curfew, coupled with the basic risk aversion behaviour by workers may make farming for farmers and food processing by agro-processors very difficult.

This situation could be exacerbated by the likely shortage of inputs, especially imported ones, such as fertilizers, animal feed and veterinary supplies and agro-chemicals, thereby adversely affecting agricultural production during the lockdown and beyond.

Furthermore, the closure of restaurants, schools (feeding schemes), farmers’ and fresh produce markets and reduced grocery shopping have reduced the demand for fresh produce and other perishables.

In turn, the declining demand for fresh produce is adversely affecting farmers and suppliers businesses with long-term consequences and smallholder farmers are hardest hit.

The agricultural sector is in a precarious situation due to its backward and forward linkages with other sectors in the economy. Thus, the South African agricultural sector will suffer from the so-called contagious effect in that what happens to other sectors of the economy will have a bearing on the agricultural sector. For example, the vast majority of the working class live from pay cheque to pay cheque and many of them will have their livelihoods affected by the coronavirus pandemic.

Either a number of workers will be retrenched or have their salaries cut as most employers feel the squeeze from the pandemic’s restricted business environment.

This will mean that the purchasing power of many families will be negatively affected leading to reduced expenditure on even essential goods, including food. The effect of the reduced buying power will be felt by farmers and food processors through reduced demand for food and other related items.

The contagion effects of the pandemic will ricochet through the economy and push more people deeper into poverty and food insecurity. In turn, this will increase the pressure on the already over-burdened social protection system with increased demand for social grants and food parcels.

The latter would be beneficial to the agricultural sector because it would increase the demand for agricultural products thus providing markets for farmers.

Other countries have successfully used the notion of food parcels and/or food stamps to ensure the survival of their farming community in times of distress and there is no reason why South Africa cannot use a similar approach.

This is one possible policy intervention that South Africa can adopt to support the resilience of the agricultural sector and ensure that transformational programmes such as the land reform programme are not undermined unwittingly by the Covid-19 pandemic.

Other policy recommendations include, but are not limited to:

Strengthening information for knowledge generation and evidence-based policy making through greater investments in the collection and analysis across the entire food system in order to design better and well-targeted interventions. The availability of accurate and real-time data is indispensable to good policy making and would assist even with better targeting the recently announced R1.4 billion stimulus package for agriculture.

Linking social protection with food security initiatives can also assist greatly in dealing food security issues that might emanate during and in the aftermath of a pandemic. South Africa can learn from countries that have done this successfully and Lesotho provides an example closer to home.

Repeated assurances from the government and the private sector on the availability of food supplies are necessary in order to reduce uncertainty and allow producers, consumers, traders, and processors to make informed decisions thereby restraining unnecessary panic behaviour in the markets.

There is no doubt that the agricultural sector and the economy, at large, have not been here before and the road that lies ahead will be hard and treacherous.

The Covid-19 pandemic requires all hands on deck in order to ensure that the South African economy bounces back stronger than before.  The pandemic could not have come at a worst time to South Africa with the economy on its knees and buffeted from all sides with bad news such as the recent economic downgrades.

Dr Thulasizwe Mkhabela is an  agricultural economist and is currently the Group Executive: Impact & Partnerships at the Agricultural Research Council; mkhabelat@arc.agric.za

Source: IOL BUSINESS REPORT