South Africa’s agricultural sector is heavily export-driven, with international trade playing a key role in its growth over the past 30 years. However, rising geopolitical tensions have heightened the need for the country to diversify its agricultural export markets. At the BRICS summit, currently taking place from 22-24 October 2024, in Kazan, Russia, South Africa should focus on strengthening its trade relations with key BRICS countries – Brazil, Russia, India, China, and South Africa – and other markets. Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of SA, emphasizes the need to expand market access within BRICS to secure the future growth of the country’s agricultural sector.
Current Challenges in South African Agricultural Exports
The South African agricultural sector’s success over the past three decades has been supported by two key strategies: investments in genetics for crops, horticulture, and livestock, and a strong push to expand export markets. With production continuing to increase and the capacity for further growth, these efforts must be intensified.
However, significant challenges remain, particularly in key markets such as China, India, Saudi Arabia, and Egypt, where high import tariffs and phytosanitary barriers restrict market access. Other potential markets in Asia, including South Korea, Japan, and Vietnam, present similar challenges. To remain competitive, South Africa must prioritize the development of seed and livestock breeding programs capable of adapting to increasingly adverse climate conditions. These efforts are essential to ensure long-term food security and sustained agricultural productivity.
The Need to Diversify Export Markets
South Africa is the only African country ranked among the top 40 global agricultural exporters, with an export value of US$13.2 billion in 2023, placing it 32nd globally. Yet, access to existing markets, such as the European Union (EU) and African neighbours within the Southern African Customs Union (SACU), is becoming increasingly uncertain due to rising protectionist measures. South Africa has already faced non-tariff barriers, particularly in citrus exports to the EU, as well as restrictions on vegetables and citrus exports to Botswana and Namibia.
Given these obstacles, Wandile Sihlobo argues that diversifying into new markets, particularly within BRICS and other strategic regions, is vital. South Africa must not only maintain its existing export relationships but also actively pursue new opportunities. He stresses that this will require concerted efforts from the government, the private sector, and relevant stakeholders, including the Department of Agriculture, to negotiate better trade terms and reduce non-tariff barriers.
Political Leadership and Trade Diplomacy
Trade issues are inherently political, and Sihlobo underscores the importance of South Africa’s political leadership in addressing these challenges. The Department of Trade, Industry and Competition (DTIC) and the Department of International Relations and Cooperation (DIRCO) must play a proactive role in engaging with other nations to resolve trade disputes and open new markets. He notes that DIRCO’s involvement in economic diplomacy is becoming increasingly crucial, particularly in light of growing geopolitical tensions that have affected global trade.
South Africa’s recent move to file a dispute with the World Trade Organization (WTO) against the EU’s citrus restrictions is an example of how political and diplomatic efforts can help address protectionist measures. According to Sihlobo, such actions should be a model for how South Africa engages with its trading partners moving forward, particularly in navigating complex trade relations within SACU and the broader BRICS bloc.
A Strategic Opportunity
The BRICS summit presents a valuable platform for South Africa to push for deeper agricultural trade relations with its partners in the bloc. Although BRICS is not a formal trade alliance, the structure provides an opportunity for South Africa to advocate for more ambitious trade agreements. Currently, South Africa’s agricultural exports to BRICS countries represent only 8% of its total agricultural exports, with most of the trade concentrated in a few commodities.
Wandile Sihlobo points out that BRICS countries have significant agricultural import demands, averaging US$255 billion annually between 2019 and 2022. China, in particular, accounted for 71% of these imports, with India and Russia following at 11% each. South Africa produces many of the agricultural goods in high demand, including soybeans, beef, maize, and various fruits. Therefore, Sihlobo argues, South Africa must seize the opportunity at the BRICS summit to lobby for the removal of trade barriers and improve market access for these products.
Building on Momentum
Building on the dialogue from the 2023 BRICS Summit in Johannesburg, where South Africa championed deeper agricultural trade, Sihlobo insists that the 2024 BRICS Summit in Kazan should focus on pragmatic steps to enhance trade. With the recent expansion of BRICS+ to include new members like Saudi Arabia, South Africa has a unique opportunity to widen its agricultural export markets even further.
Sihlobo emphasizes that it is not enough to engage in high-level talks; South African authorities must push for actionable outcomes that benefit the country’s agricultural sector. By doing so, South Africa can ensure that its farmers and agribusinesses fully reap the benefits of BRICS+ engagements, securing the long-term growth and sustainability of the nation’s agricultural industry.