Good news expected for one of South Africa’s most important sectors

After facing numerous setbacks in 2024, the South African agricultural sector is expected to experience a period of recovery in 2025.

This is according to Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of South Africa (Agbiz).

This optimistic outlook is driven by favourable weather conditions, progress in disease control, and a commitment to policy continuity.

South Africa’s agriculture sector is critical to its economy and security, contributing significantly to GDP, employment, food security, and exports.

It also drives rural development and industrial growth, supporting millions of livelihoods and boosting the country’s global trade.

However, 2024 was marked by significant challenges for the sector.

A mid-summer drought, combined with the outbreak of animal diseases, severely impacted agricultural production.

Most recent statistics from StatsSA show that there was a sharp decline in South Africa’s agricultural performance in the third quarter of 2024, with a seasonally adjusted quarter-on-quarter decrease of 28.8%.

“While a decline was anticipated due to a challenging mid-summer drought, the extent of the decrease was surprising,” said AgriSA.

That said, the Agbiz Chief Economist believes that 2025 could spell better news.

One of the primary factors contributing to the anticipated recovery is the prevalence of La Niña rains, which brought much-needed moisture to the country.

“Much of the county benefitted from the La Niña rains,” said Sihlobo, highlighting the positive impact this has had on agricultural production conditions.

However, the recovery may be somewhat subdued as the rains arrived late in certain regions, leading to strain on grazing lands and delays in summer crop planting.

Another crucial development bolstering the recovery is the notable progress made in controlling the spread of animal diseases, such as foot-and-mouth disease, avian influenza, and African swine fever.

Sihlobo emphasised the importance of this achievement, saying that “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.”

The Department of Agriculture announced the successful resolution of the foot-and-mouth disease outbreak in several provinces, paving the way for increased red meat exports.

Furthermore, improved electricity supply has significantly benefited the horticulture subsector, which heavily relies on irrigation.

“For example, when one considers the dependence of South Africa’s agriculture on horticulture, it is always worth highlighting that all of South Africa’s horticulture – fruits, vegetables and floriculture — depends on irrigation that needs an adequate power supply,” said Sihlobo.

Additionally, despite ongoing concerns about logistics infrastructure efficiency, the Agbiz Chief Economist said that collaborative efforts between Transnet, private industry, and logistics organisations have yielded positive results.

The value of agricultural exports for the first three quarters of 2024 increased by 4% compared to the previous year, reaching close to R200 billion (US$10.55 billion).

He said that policy continuity has also played a vital role in fostering a positive sentiment within the sector.

“Ordinarily, when a new government begins its term, there would be a temptation to introduce new policies and programmes [and] at times, such practices are justified,” said Sihlobo.

However, in South Africa’s agriculture, the Agriculture and Agro-processing Master Plan has already been formulated and embraced by business, labour, government, and other social partners.

“There was no need to introduce a new policy, but continuity and a sharper focus on the implementation of policy and programmes,” said Sihlobo.

“This is precisely what the seventh administration committed to doing in agriculture [and] this approach saved the sector valuable time,” he added.

As South African agriculture enters 2025, Sihlobo said that the focus should remain on expanding export markets, enhancing the efficiency of network industries, and improving municipal performance.

These efforts, coupled with the ongoing implementation of the Master Plan, are expected to contribute to the sector’s inclusive growth.

While 2024 presented numerous challenges, Sihlobo says that “as we start 2025, there is renewed optimism in the sector on the back of relatively better rainfall and improvements in the animal disease control front.”

The combination of favourable conditions and strategic policy implementation could drive a robust recovery for South African agriculture in the coming year.

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