major trends driving the future of agriculture … · • estimated value of capital assets at end...
TRANSCRIPT
-
FERTASA
John PurchaseCEO: Agbiz
19 April 2018
Major trends driving the future of Agriculture
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For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up2
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Challenging and complex environment evolving
• Global socio-political environment• Local socio-political environment• Consumer trends and activism – need to analyse and note• Technology dynamic – 4th Industrial Revolution: Jobs dynamic NB• Climate Change – adaptation and mitigation: Western Cape impact?• Increased regulation of agro-food system: Food safety & health• Sustainable use of, and rights allocation to, water and land as
critical natural resources• Utilisation of renewable energy sources – energy security• Trade agreements – “Trade wars are the wars of the future”• Big Data – mine and analyse to drive efficiency (Not fb way!)• Human capital and skills – the talent factor NB!
3
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• Multi-polar global power dynamic – economic power shift to Asia • Middle East catastrophe – migration effect to Europe and global destabilisation• Religious fundamentalism, e.g. ISIS, Boko Haram, Al Qaeda, etc.• Brexit and European Unity: uncertainty• Donald Trump dynamic – USA nationalism?• Ambitions of China & Russia, their geo-political positioning? North Korea nuclear
threat real?• Africa’s demographic ‘dividend’ and food insecurity?• Globalisation and Interconnectivity still massive driver• Blockchain and Cryptocurrencies – IMF CEO quote
More interconnected ➜ greater uncertainty ➜ less control ➜more risk ➜ greater opportunity!
Global Socio-political Developments
Dreyfus teams with banks for first agriculture blockchain trade – www.Bloomberg.com-Louis Dreyfus Co., one of the world's biggest foodstuffs traders, teamed up with Dutch and French banks in December for what it says is the first agricultural commodity trade to use the ledger-based digital technology known as blockchain. For blockchain to succeed in helping traders cut costs and deal times, however, industrywide adoption of standardized platforms and systems will be needed. That's why banks are teaming with the biggest trading houses such as LDC on early blockchain tests. Read more»
http://r20.rs6.net/tn.jsp?f=001LVJoYIOpMPll32Hutifue39Hx-CU-zdu_9nZRLYz3J_Oujf5fTth7M08ksKnzUqpE3lTobU29v661xBHGnAwL4khxJqv_HCcjFCgtiARxMXqwr80E5_X6hfQt_ciAi-l14c2yqcLV9hlMZ1KqdW35phYItELv7AAkJlbpKe-VOunglzcIIDMrrczBUeNEqmWwc356CqxdweIg-Cfq5Ifx7yi5BDVuH4rmCl7YyxtcGnVs1x37nyYUiJpBVja_5-Bu0oGIP-RCIa5mc8r27o165PP8eDSPwx1Zsw302T37_U=&c=U5pJ32P_1UCnWVACzDTo7MsJ6bVjqbJE3bseuo2i8-uuK_uvpwms8w==&ch=lmBlev2CmQpyPzlAj8nNI8BfJwCG1RegBJRIJYZgrtjJ7Bez6GZlLA==
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Demographics…..
Either massive opportunity, or a critical risk……!
-
• Multi-polar global power dynamic – economic power shift to Asia • Middle East catastrophe – migration effect to Europe and global destabilisation• Religious fundamentalism, e.g. ISIS, Boko Haram, Al Qaeda, etc.• Brexit and European Unity: uncertainty• Donald Trump dynamic – USA nationalism?• Ambitions of China & Russia, their geo-political positioning? North Korea nuclear
threat real?• Africa’s demographic ‘dividend’ and food insecurity?• Globalisation and Interconnectivity still massive driver• Blockchain and Cryptocurrencies – IMF CEO quote
More interconnected ➜ greater uncertainty ➜ less control ➜more risk ➜ greater opportunity!
Global Socio-political Developments
Dreyfus teams with banks for first agriculture blockchain trade – www.Bloomberg.com-Louis Dreyfus Co., one of the world's biggest foodstuffs traders, teamed up with Dutch and French banks in December for what it says is the first agricultural commodity trade to use the ledger-based digital technology known as blockchain. For blockchain to succeed in helping traders cut costs and deal times, however, industrywide adoption of standardized platforms and systems will be needed. That's why banks are teaming with the biggest trading houses such as LDC on early blockchain tests. Read more»
http://r20.rs6.net/tn.jsp?f=001LVJoYIOpMPll32Hutifue39Hx-CU-zdu_9nZRLYz3J_Oujf5fTth7M08ksKnzUqpE3lTobU29v661xBHGnAwL4khxJqv_HCcjFCgtiARxMXqwr80E5_X6hfQt_ciAi-l14c2yqcLV9hlMZ1KqdW35phYItELv7AAkJlbpKe-VOunglzcIIDMrrczBUeNEqmWwc356CqxdweIg-Cfq5Ifx7yi5BDVuH4rmCl7YyxtcGnVs1x37nyYUiJpBVja_5-Bu0oGIP-RCIa5mc8r27o165PP8eDSPwx1Zsw302T37_U=&c=U5pJ32P_1UCnWVACzDTo7MsJ6bVjqbJE3bseuo2i8-uuK_uvpwms8w==&ch=lmBlev2CmQpyPzlAj8nNI8BfJwCG1RegBJRIJYZgrtjJ7Bez6GZlLA==
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• ANC still in turmoil – deep divisions and distrust persist. CR dynamic?• Manifested in ANC loss of three major Metros, viz. Johannesburg, Tshwane
and Nelson Mandela Bay, to opposition coalitions. Cape Town already governed by DA
• DA & EFF viable opposition parties and ruling coalitions? Realignment.• Major political uncertainty, but not necessarily all bad. Hope springs!• Lack of GDP growth and Competitiveness decline (WEF), biggest concern• Massive unemployment (>27%), especially amongst the Youth (>50%)• Inequality - calls for radical economic transformation (RET) will not abate.• Land & water reform will be at the centre of demands.• Crime & Security factor, including corruption and farm safety concern.• General election 2019
Local Socio-political Developments
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up8
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Food Security Imperative
Many definitions to food security, but the one we will use is the
FAO definition (World Food Summit 1996):
“A situation that exists when all people, at all times, have
physical and economic access to sufficient, safe and
nutritious food to meet their dietary needs and food
preferences for an active and healthy life”.
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Components of Food Security
FOOD QUALITY & SAFETY (5)• Nutritional standards
• Protein quality • Food safety, etc.
FOOD AFFORDABILITY (6)• Food consumption as % of DHI• % of pop under GPL (
-
2017 Global Food Security Index
Source: Economist Intelligence Unit/DuPont
http://foodsecurityindex.eiu.com.
South Africa ranks 44th
SA Household Food Security a risk: ~20% of households food insecure
http://click.conversations.dupont.com/?qs=eb858739df3bf0e702094b7255f936666d29243bbb8e781e67f717050ad2a584
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15
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up16
-
Capital Assets in Agriculture
17
• Estimated value of capital assets at end 2016: R428 billion
• Estimated value of capital assets a year earlier: R394 billion
Indicating an increase of 8,6% from 2015 to 2016.
• Total value of capital assets constituted as follows:
- Land and fixed improvements: R231 billion (53,9%)
- Livestock : R131 billion (30,6%)
- Machinery and implements: R65 billion (15,5%)
Source: Abstract of Agricultural Statistics 2017, DAFF.
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Source: Statistics South Africa, Agbiz Research
Agriculture’s share in the economy is small and has declined over time…
18
Chart1
Finance
Government
Trade
Manufacturing
Transport
Mining
Personal services
Construction
Utilities
Agriculture
% contribution to GDP
17.9883689006
15.6038447008
13.5704240555
11.9066155127
8.9554444429
7.0461633206
5.1300252019
3.5511535658
3.3147509916
2.1724015425
Sheet1
Sector% contribution to GDP
Finance18.0
Government15.6
Trade13.6
Manufacturing11.9
Transport9.0
Mining7.0
Personal services5.1
Construction3.6
Utilities3.3
Agriculture2.2
Sheet1
% contribution to GDP
Sheet2
Sheet3
-
SA economic growth: Tradable goods sectors lag the non-tradable goods sectors
Source: StatsSAGraph: Agbiz
Chart2
20022002200220022002200220022002
20032003200320032003200320032003
20042004200420042004200420042004
20052005200520052005200520052005
20062006200620062006200620062006
20072007200720072007200720072007
20082008200820082008200820082008
20092009200920092009200920092009
20102010201020102010201020102010
20112011201120112011201120112011
20122012201220122012201220122012
20132013201320132013201320132013
20142014201420142014201420142014
20152015201520152015201520152015
GDP
Agric
Mining
Manuf
Constr
Trade
Transport
Finance
Index of % GDP growth of economic sectors
100
100
100
100
100
100
100
100
102.9
100.7
103.396379769
98.495762981
107.687323079
102.6657606565
106.3478429292
104.7992294263
107.6334
101.6063
104.957443704
103.3167748684
117.4959926333
108.207430392
111.545360382
112.1923223567
113.3379702
104.4512764
106.034519904
109.7267218051
131.5030183145
115.832408712
117.4509259025
118.5975157024
119.6848965312
98.706456198
105.4066228721
116.7911304223
145.2269704307
122.7366575353
123.4595659753
130.0351172918
126.2675658404
101.3715305153
105.3780375426
122.9163225809
167.0168138877
129.253159354
131.6128977928
140.2688651967
130.8131982107
117.6923469283
99.4358147406
126.1528756341
181.253654155
130.525535472
136.8618196446
150.5991890592
128.8510002375
115.8092693775
94.0951803455
113.3778722293
195.349829997
128.9365249584
138.1059583098
152.1027479862
132.8453812449
116.272506455
99.4231320982
119.6397505115
196.8108289198
133.8449220985
140.8966946801
155.379954683
137.4949695884
116.1562339485
99.7122079414
123.9693969259
197.757646414
139.8241229113
145.3059982671
161.5395093404
140.9323438282
118.8278273293
95.6758680582
126.9223247153
202.6602094062
144.8255107708
148.6394966263
166.8729556719
143.6
121.5
98.7
127.9
208.4
148
151.4
170.9
145.9
128.3
97.3
127.9
214.4
149.9
154.9
174.7
147.7
120.7
100.41
127.5
218.7
152
157.1
179.6
Chart4
20022002200220022002200220022002
20032003200320032003200320032003
20042004200420042004200420042004
20052005200520052005200520052005
20062006200620062006200620062006
20072007200720072007200720072007
20082008200820082008200820082008
20092009200920092009200920092009
20102010201020102010201020102010
20112011201120112011201120112011
20122012201220122012201220122012
20132013201320132013201320132013
GDP
Agriculture
Mining
Manufacturing
Construction
Trade
Transport
Finance
Index
Index of % GDP growth of economic sectors
2002
100
100
100
100
100
100
100
2003
102.9
100.7
103.396379769
98.495762981
107.687323079
102.6657606565
106.3478429292
2004
107.6334
101.6063
104.957443704
103.3167748684
117.4959926333
108.207430392
111.545360382
2005
113.3379702
104.4512764
106.034519904
109.7267218051
131.5030183145
115.832408712
117.4509259025
2006
119.6848965312
98.706456198
105.4066228721
116.7911304223
145.2269704307
122.7366575353
123.4595659753
2007
126.2675658404
101.3715305153
105.3780375426
122.9163225809
167.0168138877
129.253159354
131.6128977928
2008
130.8131982107
117.6923469283
99.4358147406
126.1528756341
181.253654155
130.525535472
136.8618196446
2009
128.8510002375
115.8092693775
94.0951803455
113.3778722293
195.349829997
128.9365249584
138.1059583098
2010
132.8453812449
116.272506455
99.4231320982
119.6397505115
196.8108289198
133.8449220985
140.8966946801
2011
137.4949695884
116.1562339485
99.7122079414
123.9693969259
197.757646414
139.8241229113
145.3059982671
2012
140.9323438282
118.8278273293
95.6758680582
126.9223247153
202.6602094062
144.8255107708
148.6394966263
2013
143.6
121.5
98.7
127.9
208.4
148
151.4
Chart1
20022002200220022002200220022002
20032003200320032003200320032003
20042004200420042004200420042004
20052005200520052005200520052005
20062006200620062006200620062006
20072007200720072007200720072007
20082008200820082008200820082008
20092009200920092009200920092009
20102010201020102010201020102010
20112011201120112011201120112011
20122012201220122012201220122012
20132013201320132013201320132013
20142014201420142014201420142014
20152015201520152015201520152015
GDP
Agric
Mining
Manuf
Constr
Trade
Transport
Finance
Index of % GDP growth of economic sectors
100
100
100
100
100
100
100
100
102.9
100.7
103.396379769
98.495762981
107.687323079
102.6657606565
106.3478429292
104.7992294263
107.6334
101.6063
104.957443704
103.3167748684
117.4959926333
108.207430392
111.545360382
112.1923223567
113.3379702
104.4512764
106.034519904
109.7267218051
131.5030183145
115.832408712
117.4509259025
118.5975157024
119.6848965312
98.706456198
105.4066228721
116.7911304223
145.2269704307
122.7366575353
123.4595659753
130.0351172918
126.2675658404
101.3715305153
105.3780375426
122.9163225809
167.0168138877
129.253159354
131.6128977928
140.2688651967
130.8131982107
117.6923469283
99.4358147406
126.1528756341
181.253654155
130.525535472
136.8618196446
150.5991890592
128.8510002375
115.8092693775
94.0951803455
113.3778722293
195.349829997
128.9365249584
138.1059583098
152.1027479862
132.8453812449
116.272506455
99.4231320982
119.6397505115
196.8108289198
133.8449220985
140.8966946801
155.379954683
137.4949695884
116.1562339485
99.7122079414
123.9693969259
197.757646414
139.8241229113
145.3059982671
161.5395093404
140.9323438282
118.8278273293
95.6758680582
126.9223247153
202.6602094062
144.8255107708
148.6394966263
166.8729556719
143.6
121.5
98.7
127.9
208.4
148
151.4
170.9
145.9
128.3
97.3
127.9
214.4
149.9
154.9
174.7
147.7
120.7
100.41
127.5
218.7
152
157.1
179.6
Sheet1
GDPAgricMiningMnfConstructionTradeTransportFinanceGDPAGRICMinigManufConstrTradeTransportFinance
2000100100100100100100100100
2001102.996.799.9103.2104.9101.9105.9108.21.0290-3.3-5.9
2002106.7103.1100.8106.0111.0104.2115.5115.01.03706.53.2
2003109.8103.8104.9104.6118.7110.9122.2119.71.02900.73.4-1.57.72.76.34.8-0.3
2004115.4104.8106.3109.5131.8117.4128.0129.21.04600.91.54.99.15.44.97.12.0
2005121.2107.7108.6114.5148.1134.8135.91.05302.81.06.211.97.05.35.71.4
2006127.7102.8108.4120.4169.8134.8141.5147.61.0560-5.5-0.66.410.46.05.19.61.4
2007134.2105.6107.1125.1200.6141.5148.9159.91.05502.7-0.05.215.05.36.67.92.8
2008139.2122.6101.4128.5219.3155.7154.7172.51.036016.1-5.62.68.51.04.07.41.2
2009136.7120.894.1114.8236.4151.2155.5174.70.9850-1.6-5.4-10.17.8-1.20.91.0
2010140.7121.499.6120.5239.9154.5160.0178.01.03100.45.75.50.73.82.02.2
2011145.1120.999.8123.5241.8161.3165.3184.21.0350-0.10.33.60.54.53.14.0
20121.02502.3-4.02.42.53.62.33.3
2013
20012.9
2002100.0100.0100.0100.0100.0100.0100.0100.020023.716.3
2003102.9100.7103.498.5107.7102.7106.3104.820032.99.4
2004107.6101.6105.0103.3117.5108.2111.5112.220044.615
2005113.3104.5106.0109.7131.5115.8117.5118.620055.310.7
2006119.798.7105.4116.8145.2122.7123.5130.020065.617.8
2007126.3101.4105.4122.9167.0129.3131.6140.320075.511.4
2008130.8117.799.4126.2181.3130.5136.9150.620083.69.8
2009128.9115.894.1113.4195.3128.9138.1152.12009-1.55.8
2010132.8116.399.4119.6196.8133.8140.9155.420103.19.7
2011137.5116.299.7124.0197.8139.8145.3161.520113.511.2
2012140.9118.895.7126.9202.7144.8148.6166.920122.59.9
2013143.6121.598.7127.9208.4148.0151.4170.9
2014145.9128.397.3127.9214.4149.9154.9174.7
2015147.7120.7100.41127.5218.7152157.1179.6
Q1/133400549
Q4/1233771419.99.9
Q3/12328209311.1
Q2/12320736311.4
Q1/12313905910.7
Q4/11307258911.211.2
Q3/11295449410.0
Q2/1128796939.0
Q1/11283544010.4
Q4/1027620969.79.7
Q3/1026861476.6
Q2/1026430989.0
Q1/1025672158.7
Q4/0925189235.85.8
Q3/0924244802.2
Q2/0923618072.8
Q1/0924048586.9
Q4/0823810359.89.8
Q3/08237271812.6
Q2/08229827814.0
Q1/08225028112.9
Q4/07216893411.411.4
Q3/07210631513.8
Q2/07201633716.1
Q1/07199378616.9
Q4/06194765017.817.8
Q3/06185159414.8
Q2/06173741313.3
Q1/06170605512.6
Q4/05165291610.710.7
Q3/05161257712.2
Q2/0515330339.7
Q1/05151536212.2
Q4/04149314615.015
Q3/04143671315.1
Q2/04139785613.8
Q1/04135029312.9
Q4/0312978989.49.4
Q3/0312485239.1
Q2/03122828611.1
Q1/03119644112.0
Q4/02118611916.316.3
Q3/02114469816.3
Q2/02110590415.5
Q1/02106792712.0
Q4/0110198510.0
Q3/019840370.0
Q2/019576860.0
Q1/019532460.0
-
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
-
10
20
30
40
50
60
70
80
90
Q1,2005 Q4,20006 Q3,2008 Q2,2010 Q1,2012 Q4,2013 Q3,2015 Q2,2017
RSA Agriculture, Forestry & Fisheries GDP: 2005 -2017
Year-on-Year quarter change (RHS) Agriculture Gross Value added (R Million): Real 2010 (LHS)
Source: Stats SA and Agbiz Research
Mean GDP growth per annum: 2.07%
-
Four provinces account for 80% of agricultural production over the past two decadesShare of agriculture production by province in 1995 Share of agriculture production by province in 2015
21
KZN29%
WC24%
MP9%
LP6%
FS6%
GP10%
NC6%
NW4%
EC6%
KZN30%
WC23%MP
9%
LP9%
FS7%
GP6%
NC6%
NW5%
EC5%
Source: Stats SA, Agbiz Research
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up22
-
Field crops
• Maize – major staple, net exports, ~85% GM
• Wheat – also staple food, net imports (~45% of demand)
• Sorghum – declining significance
• Soya – growing importance, cake imports, ~90% GM
• Sunflower – growing importance, S/D in balance
• Canola – growing importance in Western Cape
• Groundnuts – net exports, but declining
• Dry beans – net imports, mostly from China
• Gross value of crop production in 2016 : R57.4bn
-
South Africa’s total maize production showing good growth…
25Source: CEC, SAGIS, Agbiz Research
500 000
1 000 000
1 500 000
2 000 000
2 500 000
3 000 000
3 500 000
4 000 000
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
16 000 000
18 000 000
1994/95 1997/98 2000/01 2003/04 2006/07 2009/10 2012/13 2015/16
Hec
tare
s
Tonn
es
Porduction (LHS) Area (RHS)
-
South Africa’s maize production…
White maize production set to decline, but still above the country’s annual maize needs
Yellow maize production set to decline, but there are large stocks to boost supplies in the new marketing season
Source: CEC, SAGIS, Agbiz Research
-
500 000
1000 000
1500 000
2000 000
-
4000 000
8000 000
12000 000
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18*
Hect
ares
Tonn
es
Production (LHS) Area (RHS)
-
500 000
1000 000
1500 000
-
2000 000
4000 000
6000 000
8000 000
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18*
Hect
ares
Tonn
es
Production (LHS) Area (RHS)
-
27
White and yellow maize prices
Source: JSE, Agbiz Research
SAFEX maize prices to remain pressured in the near term…
• Both white and yellow maize prices are trading along the export parity levels, as large supplies (large carry over stock of 4.1 million tonnes form the 2017/18 marketing year, as well as expectations of 12.42 million tonnes in the new season) continue to keep prices under pressure.
• In 2017, white and yellow maize prices averaged R2 161 per tonne and R2 097 per tonne, respectively, down by 51% y/y and 38% y/y, thanks to the record harvest.
• In the last week of March 2018, white and yellow maize spot prices settled at R1 891 and R1 961 per tonne, respectively, which is 4% and 6% lower than the corresponding period last year.
1 000
2 000
3 000
4 000
5 000
6 000
3-Jan-11 10-Oct-11 23-Jul-12 2-May-13 10-Feb-14 17-Nov-14 27-Aug-15 3-Jun-16 10-Mar-17 15-Dec-17
Tonn
es p
er h
ecta
re
Yellow maize White maize
-
Horticulture• Viticulture & Wine – major export industry. Drought-hit now with
20% decline• Citrus – SA’s biggest ag-export, growing but CBS issue & FCM….? • Deciduous fruit – major net exports• Table grapes – major net exports• Sub-tropical fruit – net exports, and growing….• Vegetables – S/D balance, some imports/exports• Nut industries – significant growth off low base
Gross income from Horticulture (R bn)
2012 2013 2014 2015 2016
R41.8 R47.6 R53.9 R60.8 R72.6
-
Animal production accounts for just under half of total agriculture production : R116.73bn (2016)Agricultural production by sub-sector Animal production share over time
29
Field crops (R57.4bn)
23%
Horticulture (R72.6bn)
29%Eggs (R10.2bn)
4%
Poultry (R38.6bn)
16%
Other live animals
(R67.9bn)28%
Source: DAFF, Stats SA, RMB Global Markets Research, Agbiz Research
0
11
22
33
44
55
1995 1998 2001 2004 2007 2010 2013 2016
poutry and eggsCattleSheepOther
% of animal production
-
Beef exports
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up31
-
SA Agricultural Trade Balance
Source: International Trade Centre, 2017Graph: Agbiz, 2017
-
Source: International Trade Centre, 2017Graph: Agbiz, 2017
Trends in South Africa’s agricultural exports per region
-
500 000
1000 000
1500 000
2000 000
2500 000
3000 000
3500 000
4000 000
4500 000
5000 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
US D
ollar
('00
0)
Africa EU Asia Americas ROW
-
34
Risk to collateral, “expropriation without compensation”
-
20
40
60
80
100
120
140
160
1980 1985 1990 1995 2000 2005 2010 2015
Nominal Real
Rbn
Land and Agricultural Bank
29%
Commercial banks60%
Agricultural cooperatives
7%
Private persons2%
Other financial institutions…
Other debt1%
• Total agriculture farm debt
Source: DAFF, Agbiz Research
-
Agricultural employment
-
Indexed GDP: Agro-processing vs Manufacturing Output
36
Agro-processing: ~25% of MO and ~3.5% of GDP
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up37
-
Fields of legislation1. Credit legislation: Reg. 19 (Credit bureaus) + National Credit Amendment Bill
2. Carbon Tax Bill: Trade exposure important
3. Labour legislation: NMWB + LRAB (Nedlac package)
4. Competition Amendment Bill (In Nedlac now)
5. Water rights: - NWRS + Water Masterplan – New Water Bill & ELU
- Water licence application regulations & Water tariffs
6. Land reform: - Expropriation without Compensation
- Regulation of Agricultural Landholdings Bill- Draft Property Valuation Regulations (Property Valuation Act)- Communal Land Tenure Bill- Communal Property Association Amendment Bill- Preservation & Development of Agricultural Land Framework Bill
-
For today…….
1. Challenging and complex environment evolving
2. Food Security and Competitiveness imperative
3. Performance of the sector
4. Some ag-commodity indicators
5. Some Agribusiness indicators
6. Legislative developments in 2018
7. Wrap up39
-
10 Factors determining the future of Agri-food system
1. Consumer trends2. Consumer activism3. Rate and impact of technological development, and adoption4. Increased regulation of agri-food system5. Climate change, and water availability and cost 6. Improved and transparent communication7. Sustainable use of land and water8. Trade agreements9. Big Data10. Skills and talent factor
40
-
Wrap up• Relatively healthy and robust agro-food industry: open, competitive markets driving
efficiencies
• Relatively technologically advanced, globally competitive sector (Rand factor)
• Challenges: Investment environment, Agro-logistics, water availability and quality,environmental sustainability, R&D, crime and security, labour relations & legislation,land reform, climate change, trade agreements, sustainable transformation, etc.
• Opportunities: Growing population, consumer spending trends, new markets(especially to Africa and the East), new technologies & improved productivity, etc.
• Major contributor to Food Security, growth and employment in RSA.
• We live in uncertain times – many risks and variables, some controllable, others not orless so. The playing field and rules of the game are changing – adapt.
• However, risk creates opportunity, and concentrate on those risks you can manage!
41
-
Thank you
www.agbiz.co.za
Major trends driving the �future of Agriculture For today…….Challenging and complex environment evolvingGlobal Socio-political DevelopmentsDemographics…..Global Socio-political DevelopmentsLocal Socio-political DevelopmentsFor today…….Slide Number 9Slide Number 10Food Security ImperativeComponents of Food SecuritySlide Number 132017 Global Food Security IndexSlide Number 15For today…….Capital Assets in AgricultureSlide Number 18SA economic growth: Tradable goods sectors �lag the non-tradable goods sectorsSlide Number 20Four provinces account for 80% of agricultural production over the past two decadesFor today…….Slide Number 23Field cropsSouth Africa’s total maize production showing good growth…South Africa’s maize production…SAFEX maize prices to remain pressured in the near term…HorticultureAnimal production accounts for just under half of total agriculture production : R116.73bn (2016)Beef exportsFor today…….SA Agricultural Trade BalanceTrends in South Africa’s agricultural exports per regionRisk to collateral, “expropriation without compensation”Agricultural employmentIndexed GDP: Agro-processing vs Manufacturing OutputFor today…….Slide Number 38For today…….10 Factors determining the future of Agri-food system Wrap upThank you��www.agbiz.co.za