EPaper

Export barriers threaten iconic SA farming sectors

Bekezela Phakathi

SA’s farmers are grappling with disputes with key export markets in the EU and China that risk crippling a sector that has been one of the economy’s few bright spots in recent years.

Citrus and wool exports have been hit by the imposition of phytosanitary restrictions, which SA exporters say are unwarranted and discriminatory. The government is likely to come under increasing pressure to intervene on their behalf.

Millions of cartons of citrus fruit worth nearly R654m are rotting in containers stuck in European ports after the EU introduced new phytosanitary requirements in July. These effectively block SA from accessing the market, threatening the viability of a subsector that generates R20bn annually and supports 120,000 jobs.

DISASTER

SA Citrus Growers Association CEO Justin Chadwick told AFP at the weekend it is a disaster.

“Food that has fantastic quality and is safe is sitting there … at a time when people are worried about food security.”

SA is the world’s secondlargest exporter of fresh citrus fruit after Spain, but Brussels says its new rules are aimed at combating the potential spread of the false codling moth, an African pest that has a soft spot for oranges and grapefruit. The rules came into force when ships carrying hundreds of containers of SA fruit bound for Europe were already at sea and were blocked on arrival.

The association has argued the cold treatment prescribed by Europe’s new rules is contrary to scientific evidence and contravenes international

requirements for phytosanitary trade regulations because it is arbitrary and unnecessarily restrictive. The association’s Deon Joubert said Europe’s consumers and SA’s rural workers will pay the price.

In a similar move, Chinese authorities recently suspended wool imports from SA because of a foot-and-mouth disease outbreak, leaving the subsector reeling. Wool is the fifth-largest agricultural export after oranges, grapes, wine and apples.

China, which absorbs more than two-thirds of the world’s wool imports, has accounted for about 70% of SA’s wool exports in value terms in recent years.

AUCTION

Industry bodies Agri SA and the National Wool Growers’ Association of SA said last week they were extremely concerned “about the unjustifiable ban on wool exports to China”.

The first wool auction for the 2022/2023 season is scheduled for August 17, and the ban will have a devastating effect on the local industry, the bodies said.

The annual value of the SA wool clip is about R5bn. The industry has lost an estimated R734m in wool exports to China since the April imposition of the ban, which threatens the livelihoods of the 35,000 workers and 4,500 seasonal sheep shearers and wool handlers employed in the industry.

“The ban is unwarranted since SA has protocols in place that regulate the storage of wool after shearing for a specified time at required minimum temperatures as stipulated by the terrestrial code of the World Organisation of Animal Health,” the bodies said in a statement.

They called for urgent government intervention, saying many commercial wool producers had only recently emerged from an extended period of drought, and if wool exports to China cannot resume due to the ban, these farmers may not survive.

So far, the government has taken concrete steps only to deal with the citrus impasse by filing its first complaint at the World Trade Organization, arguing that the EU’s requirements were “not based on science” and are “discriminatory” and excessive.

Wandile Sihlobo, head of agribusiness research at the Agricultural Business Chamber (Agbiz), said it was not all doom and gloom, with all indications pointing to a promising agricultural season amid favourable weather forecasts.

He noted in a market update on Monday that tractor and combine harvester sales rose strongly in the first half of this year, suggesting growing investment and confidence. Farmers’ finances improved due to a solid production performance in the past two years, when commodity prices, specifically for grains and oilseeds, were elevated. The generally positive sentiment in the sector is reflected on the Agbiz/IDC agribusiness confidence index.

However, Sihlobo highlighted challenges facing the sector.

Not only have citrus exports to the EU and of wool exports to China been interrupted, the cattle industry has been hit by foot-and-mouth disease and farmers have to contend with higher input costs and rising interest rates.

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2022-08-10T07:00:00.0000000Z

2022-08-10T07:00:00.0000000Z

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