Succeeding in agriculture in 2020

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The broader agricultural economic environment is changing, and this would require us to revisit how we determine our success as well.

If 2019 was the only reference point to get a glimpse of Agriculture in 2020 then “tough” is probably an appropriate description.

On the supply side, drought, high temperatures, animal disease and phytosanitary challenges were (and still are) some of the prominent underlying causes of the agricultural economy experiencing a recession. The latest statistics are not yet available but in the third quarter of 2019 agriculture contracted a further 3.6%, recording a third consecutive quarterly contraction.

In 2019 this also played itself out in agricultural exports contracting. There were positive exceptions such as citrus industry who recorded record exports.

At the same time, agriculture’s debt steadily increased by a further 9% according to the Department of Agriculture and Land Reform.

On the local demand side, the consumer felt the pressure too with pale real consumer consumption numbers combined with relatively high household debt levels. This pot was further stirred by a growing unemployment figure of 29.1%, the highest since 2008.

Given the challenging external environment, 2020 will be the year for continued scenario- and financial planning.

Centre stage in terms of policy uncertainty was the question of land, in specific the issue of expropriation without compensation. Progress with land reform, in general, hovered at the same levels if the flat budget allocation is used as a yardstick.

On the international trade front, the protectionist tendencies exacerbated by the trade war between the world’s two powerhouses, the USA and China, caused more uncertainty and volatility; soya bean price volatility being a clear victim of this political tussle.

Indeed, a year on the agricultural calendar which will be remembered as “tough”.

On the supply side, the spread of diseases, growing resistance to antimicrobial substances, regulatory responses to new plant breeding techniques and responses to increasingly likely extreme climatic events.

On the demand side, evolving diets, reflecting perceptions with respect to health and sustainability issues, and policy responses to alarming trends in obesity.