South Africa’s agriculture outlook was positive for the near term, with a 3% growth forecast for the sector’s gross value added this year, from 0.9% last year, Agricultural Business chief economist Wandile Sihlobo said yesterday.
He attributed the growth to the favourable rains during the summer season that supported crop production and grazing veld.
“However, the medium-term outlook is uncertain. We have an El Niño on the horizon, which we believe may not be as devastating as the 2015/16 episode. But more issues are conspiring against the sector.
“These include persistent episodes of load-shedding, higher input costs, rising protection in some export markets, animal disease outbreaks, rising interest rates, intensified geopolitical tension, ongoing weaknesses in municipal service delivery and freight, rail and port networks, and the deterioration of rural roads. These are also issues that have kept the sentiment in the sector downbeat for some time,” Sihlobo said.
Reclaim the Karoo name
Over the weekend, Agbiz said that on invitation from its members, Cape Wools, BKB and OVK, it had attended the Karoo Winter Wool Festival.
The festival was hosted in Middelburg, the Karoo region of the Eastern Cape. The event showcased the value chain activities of the South African sheep industry and the rich Karoo heritage.
Agbiz said the Karoo’s message focused on how South Africa could promote agricultural growth in the sparse and remote region by unlocking its natural assets and heritage. There were various opportunities to pursue, including the region’s food heritage, high-end fashion and agritourism.
Agbiz said: “Exploring and expanding these opportunities would ensure that the farmers in the Karoo can diversify and improve their revenue streams by not solely depending on export markets of wool. High dependence on wool exports can come with challenges, such as when China temporarily banned the exports of South African wool, leading to a 22% y/y decline in South Africa’s wool export earnings.”
Food heritage offered obvious spin-offs in product development, economic value and tourism.
“We see elements of these foreign food heritage products on the shelves of our leading supermarkets but, somehow, these same retailers do not showcase enough of our own heritage. The Karoo is South Africa's hinterland and one of the natural assets of the Northern, Eastern and Western Cape because of its pristine natural beauty, clean air, peace and quiet. It, therefore, has a strong commercial and marketing value which farmers can utilise.
“Still, the name ‘Karoo’ has been widely misappropriated by various individuals and businesses, misrepresenting products such as ‘Karoo Lamb’. In fact, some retailers may be sourcing large volumes of lamb from the Karoo without acknowledging the origin and heritage of the product," he said.
Agbiz called on the Karoo region farmers to reclaim the Karoo name by protecting the name and identity through the registration of a geographical indication (GI), lifting Karoo Lamb out of the meat commodity mark and creating its own pricing and distribution structure, creating a different' price point for Karoo Lamb and enforcing quality and food safety standards.
They should also ensure producer control of supply chain and form strategic partnerships with abattoirs, packers and wholesalers, prevent over-dominance by major retail chains and educate consumers about the quality and value of Karoo Lamb.
Agbiz said the efforts to promote Karoo Lamb as a GI had also brought about interesting spin-offs to the fashion industry, which could add tremendous value to the Karoo. The global fashion industry, especially the luxury goods and clothing industry, was demanding wool, mohair and leather from the Karoo because of the Karoo quality, reputation and heritage.
BUSINESS REPORT