The farmers’ protests continuing in various regions of Europe are creating concern among South African agriculturalists as to what implications this could have for local production and exports, according to the Agricultural Business Chamber (Agbiz).
Wandile Sihlobo, the chief economist at Agbiz, said yesterday that according to various media reports, the protests mainly centred on the declining EU agricultural subsidies, the environmental policy to reduce chemicals and fertiliser use, and the need for protection against imports.
Overall, the outcomes of the EU farm protests would be consequential to South Africa, mainly the fruit, wine and beef industries with a specific interest in deepening trade with the EU region.
“More importantly, the environmental laws in the EU, because of the importance and influence of the area in the world, will likely be applied in other regions over time. Such development would have notable implications for the exporting nations, again illustrating the importance and relevance of the ongoing developments in the EU,” he said.
These events and the policy outcome in response to them would matter for South Africa’s agriculture in two ways.
Firstly, South Africa’s agricultural sector was strongly linked with the EU through trade.
“The region is South Africa’s second most important market for South Africa’s agricultural products, accounting for 27% of the country’s total agricultural exports, according to data from Trade Map. The EU and the rest of the world seek to implement urgent policy measures to combat the effects of climate change. In its 2030 climate target plan, the EU aims to reduce greenhouse gas emissions by 55% from 1990 levels.
“To that end, the EU has crafted the ‘Farm to Fork Strategy’, a new approach that ensures that agriculture, fisheries, and the entire food system effectively contribute to achieving this target,” he noted.
Sihlobo said this strategy sought to ensure that farmers produce sustainably by setting targets that reduced the use of fertilisers and pesticides and revising legislation regarding feed additives and animal welfare.
“But these production changes will not only apply to EU farmers, but trading partners like South Africa as well. Hence, monitoring whether the farmers’ protests make a dent in persuading EU lawmakers to adjust these regulations is vital for South African agricultural exporters.”
From a South African perspective, sustainable agricultural practice was a cause worthy of the country’s collective support, and various farmers domestically were pursuing better production methods to ensure soil and environmental health.
“To that end, attaining a balance between agrochemical use and productivity in pursuit of environmental sustainability is critical. In that sense, a drastic reduction of agrochemicals use and fertilisers is not ideal as that would negatively impact the harvest quality and output.
“Hence, a reasonable transition under the framework of a moderate approach with feasible timelines, which EU farmers are advocating for, is worth supporting. Such a reasonable outcome would imply that the EU’s trading partners do not have to significantly reduce agrochemicals and fertiliser use to lower productivity levels. This would also ensure that trade between South Africa and the EU continues on the current terms,” he said.
Secondly, there seemed to be a growing protectionist sentiment among the various protesting farmers, arguing that EU lawmakers should consider protecting the farmers against unfair world competition.
Sihlobo said: “South Africa worries about this particular line of argument as an export-oriented sector with strong links with the EU. The South African agricultural sector has faced various protectionist tendencies in the EU market, particularly in citrus… With an outright view from farmer groupings in the EU that they face unfair competition in the global agricultural market, we worry that using various non-tariff barriers may be common.”
BUSINESS REPORT