Warning for one of South Africa’s biggest employers

The European Union has established a strategic roadmap to address climate changes called the ‘Green Deal’ which, if achieved, could pose a significant threat to South Africa’s agriculture industry and jobs in the sector.
The strategy is part of a wider so-called ‘farm to fork’ ambition in the region, working to achieve climate neutrality by 2050 and a specific focus on reducing agricultural chemicals and dealing with climate change.
According to the Bureau for Food and Agriculture Policy (BFAP), there is a ‘mirror clause’ in the strategy that impacts countries exporting to the EU—like South Africa—that requires them to adhere to the same production and input use constraints as EU farmers.
The policy shift’s material impact on South Africa is not yet clear, the group noted, and what is feasible under the rules still needs to be determined.
South Africa currently has around 100,000 farmers who produce agricultural goods for commercial purposes. The sector as a whole employs over 930,000 people, making it one of the biggest employment sectors in the country.
The BFAP’s new research shows that key agricultural sectors in the country would definitely be affected but EU’s policy shift—some for better, most for worse—including possible job losses.
The bureau’s comprehensive research report examines the potential impact of the policy, focusing on the requirement to reduce pest control.
This is because “although the outcome of the EU green deal is uncertain, the reality of losing some (pesticides) is certain,” it said.
It focused on four key agricultural exports—Maize, Pome Fruit, Table Grapes and Citrus—and how these sectors would be impacted.
Impact on Exports
In terms of exports, each type of crop carries a different weight regarding the EU. Maize, for instance, is not a big export to the region. However, a large percentage of some Pome Fruit exports head there—such as 28% of SA pears.
The banning of certain active ingredients in pesticides used by farmers in South Africa will thus have wildly varying results.
The BFAP said maize exports are unlikely to be affected and may even open up opportunities for some farmers to start producing crops specifically for the EU. Local maize production already meets many of the requirements for EU export, though farmers will have to incur higher costs to meet further bans.
The other crops the bureau looked at have it worse. Pome fruits and table grapes cannot ignore the European market and will have to adapt to the rules (incurring higher costs) or risk losing market share.
One exception is the cirtus fruit sector. 36% of this crop goes to Europe, and that is something it cannot ignore. While the tighter restrictions may lead to lower yields, this could see products become more expensive, benefitting local farmers.

Impact on Crops
Across the board, adjustments that would need to be made to meet the EU’s new rules would invariably lead to smaller crop sizes.
As the BFAP noted in its report, it often makes more sense to produce less for export and take that hit, than to keep production up but sell at a lower price in other markets.
For example, its research showed that producing fewer table grapes would lead to a -15% hit to the sector, while the lower sale price to non-EU markets would cause a -38% hit.
Again, maize is unlikely to be affected, but pome fruit crops would likely decline by 3% and grape production by 9%.
Impact on Jobs
As crops get smaller to meet the dynamics of the rules, this would invariable lead to job losses, the BFAP warned.
“Jobs on-farm and in packhouses are linked to area and volume,” it said. For any crops that see these volumes decline, the job losses would move in the same direction.
Pome fruit farms sustain 47,868 fulltime equivalent jobs on farms.
Table grapes, which are highly seasonal, sustains 14, 511 permanent workers and 84,008 seasonal labourers. The BFAP noted that an estimated 7,320 fulltime equivalent jobs at farm-level could be lost by 2033 under with the new rules.

The BFAP said that the key takeaway from the research is that the EU’s clampdown on pesticides is a reality, and that collective effort is needed to keep South Africa a major supplier to the region.
This includes proactive moves at farm level, but also by industry bodies, crop protection agents and agricultural chemical companies.
While the impact on some crops will be minimumal, the industry needs to get ready for restrictions and bans that will negatively impact margins and production.
“Each industry would be affected differently based on which active ingredients are no longer registered in the EU,” it said.