‘There are various African realities – the important one for South African agriculture is the reality of a huge market for our produce.’
The recent Congress of the Transvaal Agricultural Union (TAU SA) addressed the question of food security in (my italics) an African reality.
For TAU SA general manager Bennie van Zyl, this means a continent where good governance is almost nonexistent, promises are not kept and there is little regard for property rights. The previous day, deputy minister Dirk du Toit had threatened to expropriate the farms of farmers who evicted workers, a good example of one African reality.
There is also the Zimbabwean reality, where farmers were illegally evicted from their farms and where through mismanagement the economy has become the laughing stock of the whole world, with the exception of South Africa which still believes in silent diplomacy.
Then there is the reality that evicted Indian people from Zambia some years ago, the reality of presidents-for-life and unfair and unfree elections, lack of respect for property rights and strong racial prejudice against whites, Indians and people from other tribes.
Yet another example is the reality of politicians and officials in dark suits, attending conferences and workshops in luxury hotels all over Africa. Even foreign visitors accept this reality, provided they keep their eyes closed on the way from the airport to the hotel.
While conferences adopt important resolutions, back home government’s wheels are coming off – literally, in many cases.
A frica is not a resource-poor continent. It has an abundance of natural resources and the potential to produce enough food for its population, plus a surplus to export to the rest of the world.
South Africa is the world’s leading producer of gold and diamonds. Botswana is another major diamond producer and Nigeria sits on one of the largest oil reserves in the world. African politicians blame the lack of development on their colonial past – forgetting that South New Zealand and even the US were also formerly European colonies.
Land reform is an important issue in Africa. Unfortunately, the transfer of land to indigenous people has in most cases resulted in the destruction of its productive capacity. The blame for this is then placed at the door of the former white owners of the land. The Afro-optimists emphasise the development of different regional trade blocks in Africa, the African Union (AU) and Nepad. True, there is some progress in political and economic integration in Africa. At the last count more than 10 regional economic and political groups cooperated in the AU. However, if you look at the oldest customs union in the world, the Customs Union, you find the other member countries are quite willing to share in joint customs income but will not accept the responsibilities of a customs union. For instance, Namibia closes its border with South for maize imports while they have local maize available.
There is also a positive African economic reality, especially for us in South Africa has a total population of 900 million (14% of the total world population). The African economy grew by 5% in 2005 and by 5,5% in 2006. Sub-Saharan Africa experienced its highest growth rate in 30 years during the past three years. According to the UN Food and Agriculture Organisation, African food imports amount to US$19 billion (R135,5 billion) per year. Many African companies are already actively engaged in this market.
High-street Lusaka looks very similar to high-street Africa, with well-known names such as Shoprite and MTN strongly in evidence.
Companies that try to enter the market face many obstacles, the first of which is to get paid for goods sent to destinations. The second is to ensure that the local government allows you to trade. Language, especially in the French- and Portuguese-speaking countries, is another problem. In most cases countries demand that exporters get involved in the local economy. Parmalat Zambia is a good example of how this can be done successfully – they buy milk produced by small-scale farmers and they also empower the traders who sell to informal communities.
In spite of the obstacles, there are many South Africa companies who do good business in the growing African market. There is a huge market for our agricultural products in Africa – it is up to us to do something about it. While individual farmers may already be able to enter this market, the real opportunities lie in cooperation between producers, processors and possibly also the retail chains. Prof Nick Vink of the Department of Agricultural Economics at Stellenbosch University believes the retail chains will lead the trade revolution. Industries that do not join forces with them may lose out on a very lucrative market. Dr Koos Coetzee is an agricultural economist at the MPO. All opinions are his own and do not reflect MPO policy. |fw
