Lindie Botha, ABC economic intelligence manager, said the declined was due to the global financial crisis and the decrease in local and international demand, combined with the unfavourable macroeconomic environment and uncertain political situation. The head of Santam Agri, Tobias Doyer, said it’s essential for agribusinesses to expand productivity and efficiency through capital and human investment, to enable themselves to face uncertain times.
“Investment should be allocated to reposition businesses to go forward,” said Doyer. “The agricultural sector should focus on its core reason for existence and refrain from ruthless cost management to minimise business risk.” Riaan Coetzee, the head of food, beverage and agro industries at the IDC, indicated that agriculture will rely on investment in supply-driven growth rather than demand-driven growth, due to limited consumption expenditure growth.
Coetzee added that, because of the changing demand conditions, industries relying on exports should consider diversifying. An example would be to move from producing products aimed at consumers in the high living-standard measurement group to producing products for lower living standard measurement consumers. – Peter Mashala
