Gov’t sticks to its guns on veggie import ban
Mbongeni Mguni | Monday October 17, 2022 10:30
The cream of South Africa’s farming industry met on Thursday in Pretoria discussing challenges affecting the industry. While not appearing on the agenda and not mentioned officially by the speakers, the matter of the ban on certain horticultural products by Botswana was expected to feature in informal discussions at Agri SA’s congress.
Agri SA, that country’s largest and oldest farmers’ organisation, has been outspoken about the impact of the ban on its members. This week’s congress provided farmers with an opportunity to meet President Cyril Ramaphosa and his agric minister, Thoko Didiza, to pile more pressure on prying the borders open.
From January, government slapped a ban on the importation of 16 horticultural products, including onions, butternut, tomatoes, watermelons, carrots, potatoes, cabbage, and ginger. The ban is set to end in January 2024, but recently, Agriculture Minister, Fidelis Molao vowed to renew the restriction despite the mounting pressure from South Africa.
“We will review the restriction after two years and we will be looking at fixing where it is not growing or looking at where to increase for certain products,” he told a recent live broadcast on state radio. “We do not have any expectation of going backwards and instead, we want to move forward.”
According to Molao, government remains committed to the reasons it instituted the restrictions in the first place.
“Government has a responsibility to make sure that Batswana have a share in the economy, securing all the jobs, incomes and food security that we can as a country, not looking at other countries to feed us. “When COVID-19 came, there was a challenge when borders closed and we had to see how to bring the trucks through. There was a possibility that the people bringing that food had COVID and we saw all this. “Our import bill for food is very high and in a year it can reach P11 billion which is riches that could be coming into the economy, into people’s pockets. “People have been given land they should be tilling and getting that revenue, while reducing the import bill and reducing the revenues being taken outside the country to create jobs elsewhere.”
The reasoning cited by Molao echoes discussions by Agri SA in their Pretoria congress.
“There is a renewed drive to grow, produce and manufacture locally and become more independent from imports,” Agri SA president, Jaco Minnaar told the congress on Thursday. “If we succeed, we will reap the reward of a sustainable, job-creating sector that uplifts rural communities, hence our theme ‘Growing Local’”.
The aspirations are where the similarities end between Botswana and South Africa. South Africa’s agricultural sector dwarfs Botswana, with the Pretoria congress hearing that the value of primary production in that country reached R346 billion in the 2020-21 financial year, from R224 billion in 2014-15.
By comparison, real value added by the local agriculture, forestry and fishing sector was measured at P3.2 billion in 2020, a figure that includes both primary production and secondary value addition. By 2014, the real value added was about P2.9 billion, according to Statistics Botswana figures.
And yet even as a minnow, Botswana is a key market for South Africa’s agricultural producers. According to South African government data, farmers in that country exported R10 billion in dairy products, edible vegetables and various cereals to Botswana in 2020, making the country one of its top 10 export destinations.
Authorities acknowledge that wresting this market back to Batswana is not an easy task and one that is unlikely to be accomplished within the two years provided for in the restrictions. However, some impact has been noted since January.
According to Mmegi’s analysis of data produced by Statistics Botswana, vegetable imports between January and March 2021 averaged P45.8 million, while over the same period this year, after the restrictions, they averaged P18.3 million.
The lower values recorded this year are despite a 4.5 percent average increase in vegetables over the period.
By May this year, the last month provided for food import figures by Statistics Botswana, vegetable imports were measured at P14.2 million, versus P28 million in May 2021. This is despite average prices for vegetables rising 9.3 percent over the same period.
The gap between the values of vegetable imports last year and this year, indicates the revenues accruing to local farmers. However, they remain a drop in the ocean of the R10 billion mentioned by Agri SA and Molao’s own estimation of P11 billion.
At a national level, other data suggests that the country’s dreams of redirecting billions of Pula in food imports inward, will have to move across to other agricultural products, but more importantly, up in the value chain of processed goods.
For instance, while vegetable imports in May were P14.2 million, preparations of vegetables and related goods were P66 million.
Choppies CEO, Ramachandran Ottapathu says the country is far from beginning to realise the riches of the agricultural value chain.
“We are in the first step of the agriculture value chain and in fact, we have not even taken the first step,” he told the recent Conference on Agriculture and Food Security. “We need billions of Pula in investment into this sector and we do not have the development finance institutions that can support that growth, partly because we are middle income economy. “The import ban is not working because for instance, a salad takes five or six products and if you don’t have one vegetable, you import a final product and make someone else elsewhere richer.”
The latter issue has seen some consumers shift towards purchasing processed vegetables such as canned tomatoes and onions, which have suddenly exploded in quantity and variety in the country’s shop shelves. The imported canned vegetables promise consistent quality, pricing and sustainable supply.
There are however indicators of success for the horticultural restrictions. According to Agriculture Ministry figures, between April and September 23, local farmers produced 27,826 tonnes of vegetables and fruits or about 25 percent of the annual national requirement and 33 percent of government’s target.
For consumers, however, the horticultural import ban has meant frequent shortages of supply as well as quality and pricing issues. As local farmers have attempted to step up to the opportunity, consumers have suffered through periods of oversupply and shortages, with the related swings in prices.
Even where specific vegetables are being produced in adequate prices and quality, the route to the shop shelf is uncertain. Farmers and retailers are still hammering out stable supply chains, which are dependent on factors such as capacity, quality and pricing.
For his part, Ottapathu, whose Choppies is one of the country’s biggest buyer of agricultural produce, says efforts are being improved.
“We are developing a farmer portal for them to be able to sell their produce through us and that will be ready in a few weeks’ time. “We have also registered more than 3,000 farmers on our systems,” he says.
The troubles are acknowledged by Richard Molosiwa, a prominent farmer and board member of Farmers’ United, a local association.
“When government sent out the announcement in January, we said that as farmers associations let’s all sit down and develop cropping and harvesting plans to know what we have and what we don’t have,” he told state radio. “This is still failing up to now. “The cropping plans are secret. People are not telling each other what they are doing and we are not working as a group.”
The result is that, for instance, cabbages are plentiful in the market at the moment, while tomatoes are in thin supply.
Even so, Molosiwa says there should be no going back on the horticultural restrictions.
“The decision always needed to be taken, whether in the 1990s, in 2022 or in 2028,” he says. “It was known that there would be transitional issues around supply into the market, prices and others. “It’s just a question of how quickly we get out of the confusion.”
For Molao, all the elements required for success are available from access to land, a guaranteed market and more critically, funding.
“We did not just wake up and say we are closing. “We investigated, looked at the products and saw the ones we could manage. “We have funding available for horticulture and the National Development Bank and at CEDA. “These institutions know that through the restrictions, the market is assured and stable and they will support our farmers.”
He adds: “We said challenges would be there like quality but even before the borders were closed, you could find that low quality coming from South Africa. “You could even find that the high grade that they have, they take it elsewhere and not here. “We should not think low quality is only from us Batswana and not others.”