South Africa's Agriculture and Exports

South Africa has a great agriculture and many ways to help keep their agriculture alive and looking great.

While 13% of South Africa's land can be used for crop production, only 22% of this is high-potential arable land. The most important limiting factor is the availability of water. Rainfall is distributed unevenly across the country, with some areas prone to drought. Almost 50% of South Africa's water is used for agriculture, with about 1.3-million hectares under irrigation.

Today, South Africa is not only self-sufficient in virtually all major agricultural products, but is also a net food exporter. Farming remains vitally important to the economy and development of the southern African region.

Since the country's first democratic elections in 1994, the government has been working to develop small-scale farming.

Exports

South Africa is among the world's top five exporters of avocados, grapefruit, tangerines, plums, pears, table grapes and ostrich products.

Farming contributes some 8% to the country's total exports. The largest export groups are wine, citrus, sugar, grapes, maize, fruit juice, wool, and deciduous fruit such as apples, pears, peaches and apricots.

Other important export products are avocados, dairy products, flowers, food preparations, hides and skins, meat, non-alcoholic beverages, pineapples, preserved fruit and nuts, sugar, and wines.

A number of high-growth niche markets are emerging, such as herbal beverages and luxury seafoods.

Competitive advantages

South African agriculture and agribusiness have a number of competitive advantages, making the country both an important trading partner and a viable investment destination.

World-class infrastructure

South Africa has three deep-water ports, three international airports, a network of roads and railways, well-developed cold chain facilities, and a sophisticated financial sector.

Counter-seasonality to Europe

South Africa's counter-seasonality to Europe, the country's primary export market for horticultural and floricultural products, is a major competitive advantage. South Africa is the closest major southern hemisphere producer of horticultural and floricultural products to Europe, and has significantly shorter shipping times than its rivals.

Biodiversity

South Africa's diversity of climates - tropical, subtropical and desert - allows for a vast and varied array of agricultural products.

Marine resources
South Africa has almost 3 000 kilometres of coastline which is commercially used both for conventional harvesting and for mariculture and aquaculture.

Competitive input costs

While South Africa boasts infrastructure comparable to first-world countries, its cost structures remain highly favourable. Electricity is still relatively inexpensive, and labour rates are also competitive.

Trade agreements

South Africa's agriculture and agribusiness sector are benefiting from increased market access to its key trading partners, the EU and the US, as well as to sub-Saharan countries, through a number of trade agreements.

Deregulation and market freedom

Since the end of apartheid in 1994, South African agriculture has evolved from a highly regulated and protected industry to one free from all constraints, unsubsidised by government and capable of competing with the best in the world.

The Marketing of Agricultural Products Act of 1996 dramatically changed agricultural marketing in the country by closing agricultural marketing boards, phasing out certain import and export controls, eliminating subsidies, and introducing import tariffs to protect South African farming from unfair international competition.

While a fairly radical process to some old-style producers in South Africa, deregulation has ensured a leaner and stronger agricultural industry, with farmers and agribusiness able to position themselves as players in a globally competitive environment.

Phasing out controls and closing marketing boards led to a short-term shortage of essential services formerly provided by the boards and cooperatives, such as storage, grading, deliveries, value adding, information dissemination and research.

As a result, specialised marketing support institutions, such as the South African Futures Exchange (Safex) and the Agricultural Futures Market of the J.S.E., were established to provide much-needed price risk management mechanisms.