Article

South Africa's livestock industry has faced numerous challenges over the past few years. One of these was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening in consumers financial strain due to the damaging effects of the pandemic. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa's nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in certain export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.

Despite the FMD-related export bans, South African beef producers sent sizable volumes of beef products to markets that did not close the import channel. This is evident in the beef exports for 2022, which amounted to 28 422 tonnes (albeit down 12% from 2021), according to data from Trade Map. This is only mildly below the ten-year average exports. Fresh beef accounted for 54% of overall exports while the balance was frozen beef. Within this total figure, a significant decline was recorded in frozen beef exports, which were at 12 945 tonnes in 2022, down 24% year-on-year. Meanwhile, fresh beef exports increased by 2% year-on-year to 15 477 tonnes.

The key markets for South Africa's fresh beef were Kuwait (with a market share of 22%), Jordan (16%), Mozambique (13%), United Arab Emirates (12%), Qatar (9%), Netherlands (4%), Lesotho (3%), Canada (3%), Zimbabwe (3%), Mauritius (3%), and Eswatini (2%). These markets accounted for 90% of South Africa's fresh beef exports in 2022. In the case of frozen beef exports, the top export markets were Lesotho (16%), China (14%), Nigeria (14%), United Arab Emirates (9%), Mozambique (7%), Kuwait (6%), Egypt (5%), Qatar (4%), United Kingdom (3%), Netherlands (3%), and Jordan (2%). These markets accounted for 82% of South Africa's frozen beef exports in 2022.

The outbreak of the foot-and-mouth disease also negatively impacted South Africa's wool exports. China, which accounts for roughly 70% of South Africa's wool exports in value terms, temporarily suspended South Africa's wool exports in the second quarter of 2022 and only opened the market in the last week of August 2022. The suspension happened despite a unique protocol to handle the wool shipments and avoid contamination during a foot-and-mouth disease outbreak in South Africa. South Africa and China agreed on this protocol following the 2019 outbreak, which weighed on exports.

This resulted in a 21% year-on-year decline in export value of wool in 2022, to US$337 million, according to data from Trade Map. Still, this is significant, accounting for 3% of South Africa's record agricultural export value of US$12,8 billion in 2022. Meanwhile, beef exports were about 1% of agricultural exports, valued at US$151 million in 2022.

Aside from the trade dynamics, the wool and beef industries are also among the agricultural subsectors with a large share of new-entrant black farmers that also experienced financial pressures over the past couple of years of higher input costs and animal disease outbreaks. The National Agricultural Marketing Council estimates suggest that black farmers account for 18%, 13% and 34% of wool, mohair, and cattle production, respectively.

The outbreaks we faced in last few years will not be the last. Other industries that face the same challenge are poultry and piggery, which are susceptible to diseases such as African swine fever and avian influenza, which typically come as a heavy financial burden for producers. South Africa's inability to control the spread of disease in the recent outbreaks signals a failure in the country's veterinary services and related support services i.e., laboratories and vaccine production.

Therefore, the government, along with organized agriculture and industry bodies, should closely work together to address the biosecurity challenges in the country. Notably, the government needs to lead the way in assisting at such times to ensure the sustainability of businesses and keep up with the promise of the Agriculture and Agro-processing Master Plan, which seeks to boost collaboration amongst social partners to improve inclusive growth in the sector.

As climate change intensifies and disease is likely to be more prevalent, the Department of Agriculture, Land Reform and Rural Development should consider earmarking a share of their annual budgets for emergency purposes to deal with animal disease outbreaks. These funds should be utilized under strict rules and in concurrence with the National Treasury only in the case of notifiable animal disease outbreaks. This is necessary to control animal movements, buy vaccines, employ additional staff, and compensate producers when animals must be culled, according to the World Organisation for Animal Health (OIE) guidelines. Veterinarians and animal health technicians are critical for continued surveillance, monitoring, and advice to farmers. The process of authorizing veterinarians in the private sector to deliver services on behalf of the State's needs should be a priority.

Moreover, the uncontrolled movement of animals and animal products from disease-control areas has, in almost all recent severe outbreaks of diseases, caused their spread to areas in the country where they have never occurred before. Therefore, the veterinary services at the provincial level should thus be accompanied by effective livestock movement control functions.

Also necessary is the repair and maintenance of international fences which, in their current state of disrepair, fail to keep wild animals and infected animals from neighbouring countries out of South Africa. Collaboration between Public Works and the National Treasury in this respect is critical.

In essence, most interventions require better management, better coordination, restructuring of the various departments, and investment in fencing, new laboratory equipment, and vaccine production. This is important because the livestock industry and its products (beef, lamb, wool, poultry, goats, pork, ostrich, dairy, and mohair) represent more than half of agricultural gross value-added in South Africa and provide the largest source of protein to the diets of South Africans. Hence, a failure to support this industry will negatively affect our agricultural fortunes and our overall inclusive growth ambitions.