BFAP and Agbiz optmistic for growth in the Agriculture industry in 2025 Agbiz chief economist, Wandile Sihlobo, said that while there were concerns regarding crop conditions due to late La Niña rains in various regions, widespread rains since mid-December had positively influenced agricultural prospects. Picture: Tracey Adams/Independent Newspapers
The Bureau for Food and Agricultural Policy (BFAP) and the Agricultural Business Chamber of South Africa (Agbiz) have expressed cautious optimism for the agriculture sector, predicting a recovery and 3% growth in 2025.
This announcement comes on the heels of a challenging year, where the sector is expected to endure an overall contraction of approximately 5% in 2024, attributed to several domestic and global factors.
Speaking at the Nedbank Agricultural webinar on Tuesday, BFAP director Dr Tracy Davids highlighted the significance of the agricultural value chain, stating it contributes over 14% to South Africa’s gross domestic product (GDP).
“Multiple international and local factors have influenced performance. This includes macro-economic factors, global financial crises, poor economic performance and spending power constraints in South Africa,” she said.
“This also includes domestic production conditions such as drought conditions and animal disease such as foot and mouth disease.”
Davids said that there have been challenges with South Africa’s port performance, electricity supply and water infrastructure, but noted improvements in the economy towards the end of 2024.
She added that there were drops in production of white maize, yellow maize, soybeans, sunflower, and wheat.
Agbiz chief economist Wandile Sihlobo echoed this sentiment, indicating that there is potential for recovery in 2025.
He mentioned that while there were concerns regarding crop conditions due to late La Niña rains in various regions, widespread rains since mid-December had positively influenced agricultural prospects.
“The La Niña rains were late, and we worried about crop conditions in some regions, such as Delmas in Mpumalanga, various regions of Limpopo, and parts of the Free State. But since mid-December we have continued to receive widespread rains in most regions of the country,” he said.
Sihlobo added that at the end of October 2024, the South African farmers intended to increase the area plantings for summer grains and oilseeds by 1% to 4.47 million hectares in the 2024-25 season, which is broadly in line with the long-term average.
“South Africa has also progressed notably in controlling the spread of foot-and-mouth disease and other animal diseases, such as avian influenza and African swine fever,” he said.
“This sets the livestock and poultry subsector in an ideal position to rebuild, provided we see a sustained recovery in the grazing veld across the country and yellow maize production, a primary feed.”
Sihlobo said that better dam levels and a stable electricity supply for irrigation will continue to benefit the horticulture subsector fruit, vegetables, and floriculture and set South Africa's agriculture in an ideal position for recovery in 2025.
However, Sihlobo also raised concerns about potential global trade disruptions, particularly regarding tariffs in the US. Citing President Trump's campaign announcements about imposing significant tariffs on imports, he warned of possible retaliatory actions from China, which could impact global agricultural trade dynamics.
“We don't know how China would react to such tariffs. However, if China retaliates as it did the last time, the US soybean and maize farmers and pork producers would again be negatively affected,” he said.
“Still, avoiding China on any global agricultural product will be hard. China is a dominant player in the export and import of agricultural products. This means that global agricultural trade has one additional factor that increases uncertainty.”
BUSINESS REPORT