What to expect from food prices this year
There are a few things that worry us more than a potential sharp rise in food prices. Many households are already under pressure, and spend a notable share of their income on food.
Wandile Sihlobo appointed Presidential Envoy on Agriculture and Land
In addition to his work as Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) and member of the Presidential Economic Advisory Council, Sihlobo is a Senior Lecturer Extraordinary at Stellenbosch University.
The importance of exports for SA agriculture’s long-term growth
By Wandile Sihlobo We do not emphasise enough the critical role of exports in driving South Africa’s agricultural growth. If one looks at the past three decades, this sector has more than doubled in value and volume. Indeed, the improvements in genetics and cultivars, amongst other interventions, are the primary catalyst that delivered this growth. But another critical catalyst is exports. This is a point I illustrated at length in my book, A Country of Two Agriculture. We now export roughly half of what we produce in South Africa’s agriculture, which was nearly US$14.0-billion in 2024. We are not even at capacity in terms of agricultural production, as we have roughly 2.5 million hectares of government-owned land that was previously commercially farmed, but now sub-optimally utilised. We also have capacity in the former homelands to increase agricultural output. When this land is finally released to deserving black farmers, with title deeds, paired with affordable finance, and partnerships from commodity associations, we will be able to drive the agricultural output to new heights. But we won’t be in a position to absorb that output in the domestic market. We will need to look at export markets. These exports are also key in ensuring that the farming businesses remain financially viable and can sustain jobs, and provide economic value to various communities. And yes, we don’t just export without first taking care of the domestic food needs. The exports are primarily a surplus. (The poverty issues we all are aware of in South Africa are mainly an income poverty issue, not necessarily an agricultural question). It is this reality I have just explained above that has always compelled me to speak more about the need to expand our export diversification efforts. I was encouraged on August 4, 2025, when I heard the key policy makers in the trade and international relations space pushing this message strongly. In a joint media briefing by South Africa’s Ministers of International Relations and Cooperation and Trade, Industry and Competition, the intent to rigorously pursue export diversification was made clear, with the ministers stating that: “We have been strengthening trade and investment partnerships with various trade partners. These efforts are bearing fruit, targeting markets across Africa, as well as in Asia, Europe, the Middle East, and the Americas.” The Ministers further stated that: “We are making significant inroads into new, high-growth markets across Asia and the Middle East, including the UAE, Qatar, and Saudi Arabia. These efforts are not only opening doors to new opportunities but also reinforcing our commitment to retaining the vital markets we already have.” With this clarity on the importance of export diversification, the South African agricultural community must rally behind this message. The first step must be to support the government with insights that further help them in engaging with the new markets and their prioritisation. This may not be something that people have on their minds, especially in the fast-evolving world of global trade. Thus, supporting research efforts on trade to provide up-to-date key insights that guide us in decision-making is vital. Another aspect we will have to assess is capacity readiness in the various government departments that are directly engaged in trade matters, specifically, the departments of International Relations and Cooperation and Trade, Industry and Competition. This also means that South Africa will have to adjust its approach on trade matters and be more open to Free Trade Agreements, understanding that there are tradeoffs they bring. You cannot want to win in all industries. There will be tough choices of tradeoffs that the policy makers will have to make. The countries we want to diversify to may also want to sell something from South Africa. This is particularly true today, where all countries are under pressure to expand their export markets given the disruption caused by the U.S. trade policy. The government senior officials in the trade department will also need to align with this new approach, which may be a slight shift in orientation from the established way of approaching trade policy matters. Ultimately, export diversification is key to the long-term growth of South Africa’s agriculture. We should keep this work going! Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. Sources: Agbiz | Daily Maverick | dtic
The reality is that South Africa’s agriculture is thriving
By Wandile Sihlobo Since US President Donald Trump commented about his “imaginary” land grabs in South Africa, some among us have started pushing a misleading narrative that agriculture is under pressure and has been failing for a while. The inept municipalities, poor road infrastructure, stock theft, and port inefficiencies all contribute to this narrative of failure and despair. Stories of the failings of land reform farms also add to this sentiment of regression in agricultural progress. But this narrative is far from the reality of the South African farming sector. Regardless of how experts feel about the state’s capacity and the government’s policy stance since the dawn of democracy, the one undeniable fact is that the sector has grown tremendously – and indeed, not failing. Data from the Department of Agriculture shows that domestic agricultural output in 2023/24 had more than doubled the size in 1994. A few sectors did not drive this expansion, but it has been widespread; livestock, horticulture and field crops have all grown enormously over this period. The higher production levels have mainly been underpinned by new production technologies, better farming skills, growing demand (locally and globally) and progressive trade policy. The private sector has played a major role in this progress. South Africa was the world’s 32nd largest agricultural exporter in 2023, the only African country in the top 40 in value terms. This was made possible by a range of trading agreements the South African government had secured over the past decades, the most important ones being with African countries, Europe, the Americas, and some Asian countries. The African continent and Europe now account for about two-thirds of South Africa’s agricultural exports, and Asia is now also an important market. The agricultural subsectors that have contributed most to this progress in exports are fruits, wine, wool and grains. South Africa now exports roughly half of its agricultural products in value terms, reaching a record $13.2-billion in 2023, according to data from Trade Map. The friction surrounding SA-US relations has added to the view that South Africa may be pushed out of AGOA and that agriculture would be under pressure in such a scenario. However, the reality is that South Africa’s agricultural exports directly to the US account for only 4% of the overall agricultural exports. And even if South Africa could be out of AGOA, that wouldn’t mean a blockage, but there would be tariffs of around 3%, reducing the competition of South African products. To be clear, I am not minimising what is at stake; the agricultural products South Africa exports to the US include citrus, nuts, wine, grapes, and fruit juices, amongst other products. For these industries, an exclusion from AGOA would be negative, but it would not be a collapse of SA agriculture. Beyond exports, the increase in agricultural output over the past 30 years is why South Africa is now ranked 59th out of 113 countries in the global food security index, making it the most food-secure country in sub-Saharan Africa. I recognise that boasting about this ranking when millions of South Africans go to bed hungry daily may ring hollow, as I pointed out after a few presentations where I cited these statistics. However, it is essential to note that many South Africans lack access to food due to the “income poverty challenge” rather than lack of availability due to low agricultural output, as in other parts of Africa. South Africa produces enough food but does not export all of it. A lot is kept domestically for the local market. To address poverty, South Africa must ensure employment and that households have sufficient income to buy food. The disappointing part of South Africa’s agriculture is the exclusion of black farmers. As I argued in my recent book, A Country of Two Agricultures, “Nearly three decades after the dawn of democracy, SA has remained a country of ‘two agricultures’. On the one hand, we have a subsistence, primarily non-commercial and black farming segment; on the other, we have predominantly commercial and white farmers.” The book adds that: “the democratic government’s corrective policies and programmes to unify the sector and build an inclusive agricultural economy have suffered failures since 1994. The private sector has also not provided many successful partnership programmes to foster black farmers’ inclusion in scale commercial production. It is no surprise that institutions such as the National Agricultural Marketing Council estimate that black farmers account for less than 10%, on average, of commercial agricultural production in SA.” This lacklustre performance by black farmers in commercial agriculture cannot be blamed solely on historical legacies. The democratic government is also blamed for its inability to support the development of the new crop of farmers. Fortunately, not all is lost. Plans and programmes are in place to sustainably increase the number of black farmers in the sector. The agriculture and land reform plants are not aimed at replacing the existing farmers with new black farmers. The government has around 2.5 million hectares of land to distribute with title deeds to black farmers. This will be “growing the agricultural piece” without threatening the property rights in the country. South Africa’s agriculture is robust and has room for growth. As we progress toward supporting the sector, there must also be room for young people to be included. Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa (Agbiz) Sources: The Conversation | Democratic Alliance | DALRRD | Economist Impact | The Conversation
Green energy, green economy, green opportunities
By Nicholas Fordyce, Communications and Publications Manager, Green Cape The building blocks of any economy are the same; to power an economy, we need sources of energy. To grow our community, we must provide food and other resources. We need infrastructure to supply and distribute water and sanitation services. We require a waste management system that can capture, process, and safely dispose of, or clean, the waste we generate. And for all of the above, we require modes of transportation. However, not all economies are built the same way. For far too long, people have pursued a form of economy based on a linear “take-make-waste” model based on the extraction and consumption of limited fossil fuel resources. This has gradually plunged us into a number of crises, including the global climate crisis, the 6th extinction, resource availability crises, landfill airspace shortages, and significant widespread inequality. Globally, there is now an urgent trend towards transitioning to alternative ways of operating. A green economy has all of the same building blocks as its linear counterpart, but with an emphasis on technological solutions that are circular, clean, renewable, sustainable, and, critically, also profitable. Moreover, a green economy is one that is considered socially inclusive, creates meaningful and dignified job opportunities, and is focused on service delivery to those communities that are most vulnerable. For businesses that transition to green technologies, enhanced business resilience and profitability are anticipated outcomes. Through its partnership with the City of Cape Town, GreenCape, a non-profit organisation that drives the widespread adoption of economically viable greentech solutions across Africa, has published a suite of freely available case studies and industry briefs designed to showcase the broad range of green economy opportunities, solutions, and interventions across all of the aforementioned sectors that are currently present within Cape Town. The examples provided below are not exhaustive but paint a clear picture of the types of opportunities that exist within Cape Town’s enabling environment. The energy crisis For South Africans, the most glaringly obvious challenge facing our country is our energy crisis. Load shedding is now a daily reality, and with the schedule so extreme, we shift through many stages a day. Indeed, in 2023, we saw more hours of load shedding, and at higher stages, than in any previous year. For businesses, the combination of energy insecurity and rising Eskom tariffs makes the provision of electricity a major liability. There is now a huge movement for businesses to ensure security of supply, with many opting for the costly and dirty solution of running diesel generators or seeking energy storage solutions. But those are not the only solutions. There is an increasingly strong business case for small-scale embedded generation (SSEG), a green economy solution that allows for the generation of clean, renewable energy at a cost significantly lower than that of Eskom tariffs. Indeed, the uptake of SSEG has exploded in South Africa, particularly in the commercial and industrial (C&I) sectors. So, what’s the catch? Until recently, a significant one was the upfront capital costs associated with installing a solar photovoltaic (PV) system. But accessing finance has now shifted from being a barrier to becoming a competitive means of extracting additional value. Consequently, the most significant consideration for companies is selecting the most appropriate financing option for their project, and a range of innovative financing options exist. While outright purchases still provide the best return on investment over the lifetime of the asset, power purchase agreements (PPAs) and lease agreements have cash flow and system performance benefits and provide great alternatives for businesses without the upfront capital for a solar PV system. Many businesses are starting to take up these opportunities. For example, Pick n Pay (Brackenfell, Cape Town) has demonstrated the benefits experienced from installing a 250.8 kW solar PV system (developed, designed and installed by Emergent Energy and financed through a solar rooftop rental agreement by Decentral Energy). Urban agriculture: the growth of cannabis Turning to agriculture, a trio of urban agricultural opportunities in the hemp market—in pharmaceuticals, in the construction industry, and in textile production—demonstrate the inherent potential within Cape Town’s urban agricultural market. Globally, the cannabis sector is growing, and is currently valued at ~$51.28 billion (Statistica 2023). Nationally, recent policy and regulatory changes have created an enabling environment that is opening up local opportunities for investment and job creation within the cannabis sector. In Cape Town, the first of these key opportunities for investment in the cannabis sector, lies within the pharmaceuticals industry. Because medicinal cannabis can be grown in three different production systems (indoor, greenhouse, or outdoor), opportunities exist across the value chain, not only in cultivation and processing but also in the companies that provide the required agro-technologies and services. The medicinal cannabis companies in the Western Cape use both greenhouse and indoor production systems, and so agro-technology suppliers of systems such as lighting, fertigation (the practice of applying fertiliser solutions with irrigation water), drip irrigation, water treatment, etc. will benefit from the greater market demand as more medicinal cannabis start-ups set up facilities. Industrial zones, such as Epping, are well-suited for start-ups looking to repurpose existing warehouses and set up indoor facilities. Additionally, in 2018, Cape Town was the leading medical destination for medical travellers in Africa and has a competitive advantage in that it has world-renowned doctors, a medical industry that has pioneered many ground-breaking surgeries, and a favourable currency exchange rate (in comparison to the US Dollar, Pound Sterling, and Euro). This only serves to highlight the potential of the opportunity within the Cape Town context. In addition to pharmaceuticals, there is a growing global interest in the use of hemp in the construction sector, particularly as the sector looks at different pathways for reducing the overall carbon footprint of the value chain. It is estimated that the building and construction sector accounts for around 40% of greenhouse gas (GHG) emissions globally, from materials to heating, cooling, and lighting (Muller et al 2020). There is also growing concern that the price