2020 BFAP Baseline virtual launch during COVID-19 pandemic

by Ayabonga Sibulali, ayabongaS@elsenburg.com

TThe annual Bureau for Food and Agricultural Policy (BFAP) Baseline launch has become a crucial event on the calendar of many agriculturalists in the Western Cape. In 2020, the Baseline event was launched online due to the impact of COVID-19. The Western Cape Department of Agriculture is the committed sponsor and partner of the BFAP launch and continues to strengthen the collaboration to forecast the projections over 10 years. This collaborative work is done by key local and international partners such as the Bureau for Economic Research, the Organisation for Economic Co-operation and Development, the Food and Agriculture Organization, and the Food and Agricultural Policy Research Institute.

This year’s virtual BFAP Baseline launch highlighted several factors during the world pandemic. These include production trends, food consumption, price fluctuation, trade, value chain analysis, policy changes, environmental issues and the possible risks in the world food market that may affect the performance of the South African agricultural sector.

The BFAP information presented at the launch provides Government and a wide range of agricultural stakeholders with critical insights for improved strategic planning and decision-making. At best, the Baseline serves as the benchmark to test, interpret and analyse external shocks on South Africa’s agricultural sector and it provides recommendations for achieving the Western Cape Department of Agriculture (WCDoA) objectives to gain market access, address climate change, and get farmer support, among others.

Main insights

During the pandemic, the South African agricultural sector contributed positively to the economy and the BFAP Baseline projected that this sector would grow by 13% in 2020. The BFAP Baseline also addressed general inclusive growth along the value chain. The country’s agricultural sector is developing an Agriculture and Agro-Processing Master Plan (AAMP), which will have an impact on preliminary interventions to yield 11,8% growth in real agricultural gross domestic product.

In 2020 the agricultural sector is set to perform remarkably well, despite the impact of the pandemic, largely due to a bumper maize crop and drought recovery in several horticultural industries. Most meat sectors are integrated into the global markets and prices are expected to benefit from the weaker exchange rate regarding trade. Locally produced poultry, relative to imports, will further benefit from recent tariff increases and the combination of strategies under the recently signed poultry master plan, which is aimed at ensuring fair competition with imported products.

The horticultural industry was also expected to benefit from price changes as the result of the weaker exchange rate with citrus exports, firm international prices, and timing of its peak. The combination of price pressure and increasing competition for resources, especially water, will lead to a slowdown in expansion for large fruit such as citrus, pome fruit and grapes over the next decade. Expansion is still expected in smaller fruit sectors such as avocados, blueberries, and nuts.

There remain many opportunities for emerging farmers and new entrants into the sector to drive economic development in various informal value chains. Given the financial support, links to the markets, land reform programmes and public–private partnership support, there is room for this sector to grow. However, smallholder subsistence farmers are under severe stress, which is driven by the impact of the drought in the 2015/16 production year, lack of institutional support, little resilience, and lack of coordination. Also, combining farm systems and food systems is important moving forward.

Finally, the BFAP suggests several preconditions that need to be adopted for the sector to contribute to economic growth and job creation. These are increased investment (diverse capital and financial requirements), optimising and coordinating public and private sector resources, expanding production on underutilised land, and improving irrigation efficiency. In doing so, the lessons learnt from the wheat industry show that policy support matters.