major trends driving the future of agriculture … · • estimated value of capital assets at end...

FERTASA

John PurchaseCEO: Agbiz

19 April 2018

Major trends driving the future of Agriculture

For today…….

1. Challenging and complex environment evolving

2. Food Security and Competitiveness imperative

3. Performance of the sector

4. Some ag-commodity indicators

5. Some Agribusiness indicators

6. Legislative developments in 2018

7. Wrap up2

Challenging and complex environment evolving

• Global socio-political environment• Local socio-political environment• Consumer trends and activism – need to analyse and note• Technology dynamic – 4th Industrial Revolution: Jobs dynamic NB• Climate Change – adaptation and mitigation: Western Cape impact?• Increased regulation of agro-food system: Food safety & health• Sustainable use of, and rights allocation to, water and land as

critical natural resources• Utilisation of renewable energy sources – energy security• Trade agreements – “Trade wars are the wars of the future”• Big Data – mine and analyse to drive efficiency (Not fb way!)• Human capital and skills – the talent factor NB!

3

• Multi-polar global power dynamic – economic power shift to Asia • Middle East catastrophe – migration effect to Europe and global destabilisation• Religious fundamentalism, e.g. ISIS, Boko Haram, Al Qaeda, etc.• Brexit and European Unity: uncertainty• Donald Trump dynamic – USA nationalism?• Ambitions of China & Russia, their geo-political positioning? North Korea nuclear

threat real?• Africa’s demographic ‘dividend’ and food insecurity?• Globalisation and Interconnectivity still massive driver• Blockchain and Cryptocurrencies – IMF CEO quote

More interconnected ➜ greater uncertainty ➜ less control ➜more risk ➜ greater opportunity!

Global Socio-political Developments

Dreyfus teams with banks for first agriculture blockchain trade – www.Bloomberg.com-Louis Dreyfus Co., one of the world's biggest foodstuffs traders, teamed up with Dutch and French banks in December for what it says is the first agricultural commodity trade to use the ledger-based digital technology known as blockchain. For blockchain to succeed in helping traders cut costs and deal times, however, industrywide adoption of standardized platforms and systems will be needed. That's why banks are teaming with the biggest trading houses such as LDC on early blockchain tests. Read more»

http://r20.rs6.net/tn.jsp?f=001LVJoYIOpMPll32Hutifue39Hx-CU-zdu_9nZRLYz3J_Oujf5fTth7M08ksKnzUqpE3lTobU29v661xBHGnAwL4khxJqv_HCcjFCgtiARxMXqwr80E5_X6hfQt_ciAi-l14c2yqcLV9hlMZ1KqdW35phYItELv7AAkJlbpKe-VOunglzcIIDMrrczBUeNEqmWwc356CqxdweIg-Cfq5Ifx7yi5BDVuH4rmCl7YyxtcGnVs1x37nyYUiJpBVja_5-Bu0oGIP-RCIa5mc8r27o165PP8eDSPwx1Zsw302T37_U=&c=U5pJ32P_1UCnWVACzDTo7MsJ6bVjqbJE3bseuo2i8-uuK_uvpwms8w==&ch=lmBlev2CmQpyPzlAj8nNI8BfJwCG1RegBJRIJYZgrtjJ7Bez6GZlLA==

Demographics…..

Either massive opportunity, or a critical risk……!

• Multi-polar global power dynamic – economic power shift to Asia • Middle East catastrophe – migration effect to Europe and global destabilisation• Religious fundamentalism, e.g. ISIS, Boko Haram, Al Qaeda, etc.• Brexit and European Unity: uncertainty• Donald Trump dynamic – USA nationalism?• Ambitions of China & Russia, their geo-political positioning? North Korea nuclear

threat real?• Africa’s demographic ‘dividend’ and food insecurity?• Globalisation and Interconnectivity still massive driver• Blockchain and Cryptocurrencies – IMF CEO quote

More interconnected ➜ greater uncertainty ➜ less control ➜more risk ➜ greater opportunity!

Global Socio-political Developments

Dreyfus teams with banks for first agriculture blockchain trade – www.Bloomberg.com-Louis Dreyfus Co., one of the world's biggest foodstuffs traders, teamed up with Dutch and French banks in December for what it says is the first agricultural commodity trade to use the ledger-based digital technology known as blockchain. For blockchain to succeed in helping traders cut costs and deal times, however, industrywide adoption of standardized platforms and systems will be needed. That's why banks are teaming with the biggest trading houses such as LDC on early blockchain tests. Read more»

http://r20.rs6.net/tn.jsp?f=001LVJoYIOpMPll32Hutifue39Hx-CU-zdu_9nZRLYz3J_Oujf5fTth7M08ksKnzUqpE3lTobU29v661xBHGnAwL4khxJqv_HCcjFCgtiARxMXqwr80E5_X6hfQt_ciAi-l14c2yqcLV9hlMZ1KqdW35phYItELv7AAkJlbpKe-VOunglzcIIDMrrczBUeNEqmWwc356CqxdweIg-Cfq5Ifx7yi5BDVuH4rmCl7YyxtcGnVs1x37nyYUiJpBVja_5-Bu0oGIP-RCIa5mc8r27o165PP8eDSPwx1Zsw302T37_U=&c=U5pJ32P_1UCnWVACzDTo7MsJ6bVjqbJE3bseuo2i8-uuK_uvpwms8w==&ch=lmBlev2CmQpyPzlAj8nNI8BfJwCG1RegBJRIJYZgrtjJ7Bez6GZlLA==

• ANC still in turmoil – deep divisions and distrust persist. CR dynamic?• Manifested in ANC loss of three major Metros, viz. Johannesburg, Tshwane

and Nelson Mandela Bay, to opposition coalitions. Cape Town already governed by DA

• DA & EFF viable opposition parties and ruling coalitions? Realignment.• Major political uncertainty, but not necessarily all bad. Hope springs!• Lack of GDP growth and Competitiveness decline (WEF), biggest concern• Massive unemployment (>27%), especially amongst the Youth (>50%)• Inequality - calls for radical economic transformation (RET) will not abate.• Land & water reform will be at the centre of demands.• Crime & Security factor, including corruption and farm safety concern.• General election 2019

Local Socio-political Developments

For today…….







7. Wrap up8

Food Security Imperative

Many definitions to food security, but the one we will use is the

FAO definition (World Food Summit 1996):

“A situation that exists when all people, at all times, have

physical and economic access to sufficient, safe and

nutritious food to meet their dietary needs and food

preferences for an active and healthy life”.

Components of Food Security

FOOD QUALITY & SAFETY (5)• Nutritional standards

• Protein quality • Food safety, etc.

FOOD AFFORDABILITY (6)• Food consumption as % of DHI• % of pop under GPL (

2017 Global Food Security Index

Source: Economist Intelligence Unit/DuPont

http://foodsecurityindex.eiu.com.

South Africa ranks 44th

SA Household Food Security a risk: ~20% of households food insecure

http://click.conversations.dupont.com/?qs=eb858739df3bf0e702094b7255f936666d29243bbb8e781e67f717050ad2a584

For today…….







7. Wrap up16

Capital Assets in Agriculture

17

• Estimated value of capital assets at end 2016: R428 billion

• Estimated value of capital assets a year earlier: R394 billion

Indicating an increase of 8,6% from 2015 to 2016.

• Total value of capital assets constituted as follows:

- Land and fixed improvements: R231 billion (53,9%)

- Livestock : R131 billion (30,6%)

- Machinery and implements: R65 billion (15,5%)

Source: Abstract of Agricultural Statistics 2017, DAFF.

Source: Statistics South Africa, Agbiz Research

Agriculture’s share in the economy is small and has declined over time…

18

Chart1

Finance

Government

Trade

Manufacturing

Transport

Mining

Personal services

Construction

Utilities

Agriculture

% contribution to GDP

17.9883689006

15.6038447008

13.5704240555

11.9066155127

8.9554444429

7.0461633206

5.1300252019

3.5511535658

3.3147509916

2.1724015425

Sheet1

Sector% contribution to GDP

Finance18.0

Government15.6

Trade13.6

Manufacturing11.9

Transport9.0

Mining7.0

Personal services5.1

Construction3.6

Utilities3.3

Agriculture2.2

Sheet1

% contribution to GDP

Sheet2

Sheet3

SA economic growth: Tradable goods sectors lag the non-tradable goods sectors

Source: StatsSAGraph: Agbiz

Chart2

20022002200220022002200220022002

20032003200320032003200320032003

20042004200420042004200420042004

20052005200520052005200520052005

20062006200620062006200620062006

20072007200720072007200720072007

20082008200820082008200820082008

20092009200920092009200920092009

20102010201020102010201020102010

20112011201120112011201120112011

20122012201220122012201220122012

20132013201320132013201320132013

20142014201420142014201420142014

20152015201520152015201520152015

GDP

Agric

Mining

Manuf

Constr

Trade

Transport

Finance

Index of % GDP growth of economic sectors

100

100

100

100

100

100

100

100

102.9

100.7

103.396379769

98.495762981

107.687323079

102.6657606565

106.3478429292

104.7992294263

107.6334

101.6063

104.957443704

103.3167748684

117.4959926333

108.207430392

111.545360382

112.1923223567

113.3379702

104.4512764

106.034519904

109.7267218051

131.5030183145

115.832408712

117.4509259025

118.5975157024

119.6848965312

98.706456198

105.4066228721

116.7911304223

145.2269704307

122.7366575353

123.4595659753

130.0351172918

126.2675658404

101.3715305153

105.3780375426

122.9163225809

167.0168138877

129.253159354

131.6128977928

140.2688651967

130.8131982107

117.6923469283

99.4358147406

126.1528756341

181.253654155

130.525535472

136.8618196446

150.5991890592

128.8510002375

115.8092693775

94.0951803455

113.3778722293

195.349829997

128.9365249584

138.1059583098

152.1027479862

132.8453812449

116.272506455

99.4231320982

119.6397505115

196.8108289198

133.8449220985

140.8966946801

155.379954683

137.4949695884

116.1562339485

99.7122079414

123.9693969259

197.757646414

139.8241229113

145.3059982671

161.5395093404

140.9323438282

118.8278273293

95.6758680582

126.9223247153

202.6602094062

144.8255107708

148.6394966263

166.8729556719

143.6

121.5

98.7

127.9

208.4

148

151.4

170.9

145.9

128.3

97.3

127.9

214.4

149.9

154.9

174.7

147.7

120.7

100.41

127.5

218.7

152

157.1

179.6

Chart4

20022002200220022002200220022002

20032003200320032003200320032003

20042004200420042004200420042004

20052005200520052005200520052005

20062006200620062006200620062006

20072007200720072007200720072007

20082008200820082008200820082008

20092009200920092009200920092009

20102010201020102010201020102010

20112011201120112011201120112011

20122012201220122012201220122012

20132013201320132013201320132013

GDP

Agriculture

Mining

Manufacturing

Construction

Trade

Transport

Finance

Index


2002

100

100

100

100

100

100

100

2003

102.9

100.7

103.396379769

98.495762981

107.687323079

102.6657606565

106.3478429292

2004

107.6334

101.6063

104.957443704

103.3167748684

117.4959926333

108.207430392

111.545360382

2005

113.3379702

104.4512764

106.034519904

109.7267218051

131.5030183145

115.832408712

117.4509259025

2006

119.6848965312

98.706456198

105.4066228721

116.7911304223

145.2269704307

122.7366575353

123.4595659753

2007

126.2675658404

101.3715305153

105.3780375426

122.9163225809

167.0168138877

129.253159354

131.6128977928

2008

130.8131982107

117.6923469283

99.4358147406

126.1528756341

181.253654155

130.525535472

136.8618196446

2009

128.8510002375

115.8092693775

94.0951803455

113.3778722293

195.349829997

128.9365249584

138.1059583098

2010

132.8453812449

116.272506455

99.4231320982

119.6397505115

196.8108289198

133.8449220985

140.8966946801

2011

137.4949695884

116.1562339485

99.7122079414

123.9693969259

197.757646414

139.8241229113

145.3059982671

2012

140.9323438282

118.8278273293

95.6758680582

126.9223247153

202.6602094062

144.8255107708

148.6394966263

2013

143.6

121.5

98.7

127.9

208.4

148

151.4

Chart1

20022002200220022002200220022002

20032003200320032003200320032003

20042004200420042004200420042004

20052005200520052005200520052005

20062006200620062006200620062006

20072007200720072007200720072007

20082008200820082008200820082008

20092009200920092009200920092009

20102010201020102010201020102010

20112011201120112011201120112011

20122012201220122012201220122012

20132013201320132013201320132013

20142014201420142014201420142014

20152015201520152015201520152015

GDP

Agric

Mining

Manuf

Constr

Trade

Transport

Finance


100

100

100

100

100

100

100

100

102.9

100.7

103.396379769

98.495762981

107.687323079

102.6657606565

106.3478429292

104.7992294263

107.6334

101.6063

104.957443704

103.3167748684

117.4959926333

108.207430392

111.545360382

112.1923223567

113.3379702

104.4512764

106.034519904

109.7267218051

131.5030183145

115.832408712

117.4509259025

118.5975157024

119.6848965312

98.706456198

105.4066228721

116.7911304223

145.2269704307

122.7366575353

123.4595659753

130.0351172918

126.2675658404

101.3715305153

105.3780375426

122.9163225809

167.0168138877

129.253159354

131.6128977928

140.2688651967

130.8131982107

117.6923469283

99.4358147406

126.1528756341

181.253654155

130.525535472

136.8618196446

150.5991890592

128.8510002375

115.8092693775

94.0951803455

113.3778722293

195.349829997

128.9365249584

138.1059583098

152.1027479862

132.8453812449

116.272506455

99.4231320982

119.6397505115

196.8108289198

133.8449220985

140.8966946801

155.379954683

137.4949695884

116.1562339485

99.7122079414

123.9693969259

197.757646414

139.8241229113

145.3059982671

161.5395093404

140.9323438282

118.8278273293

95.6758680582

126.9223247153

202.6602094062

144.8255107708

148.6394966263

166.8729556719

143.6

121.5

98.7

127.9

208.4

148

151.4

170.9

145.9

128.3

97.3

127.9

214.4

149.9

154.9

174.7

147.7

120.7

100.41

127.5

218.7

152

157.1

179.6

Sheet1

GDPAgricMiningMnfConstructionTradeTransportFinanceGDPAGRICMinigManufConstrTradeTransportFinance

2000100100100100100100100100

2001102.996.799.9103.2104.9101.9105.9108.21.0290-3.3-5.9

2002106.7103.1100.8106.0111.0104.2115.5115.01.03706.53.2

2003109.8103.8104.9104.6118.7110.9122.2119.71.02900.73.4-1.57.72.76.34.8-0.3

2004115.4104.8106.3109.5131.8117.4128.0129.21.04600.91.54.99.15.44.97.12.0

2005121.2107.7108.6114.5148.1134.8135.91.05302.81.06.211.97.05.35.71.4

2006127.7102.8108.4120.4169.8134.8141.5147.61.0560-5.5-0.66.410.46.05.19.61.4

2007134.2105.6107.1125.1200.6141.5148.9159.91.05502.7-0.05.215.05.36.67.92.8

2008139.2122.6101.4128.5219.3155.7154.7172.51.036016.1-5.62.68.51.04.07.41.2

2009136.7120.894.1114.8236.4151.2155.5174.70.9850-1.6-5.4-10.17.8-1.20.91.0

2010140.7121.499.6120.5239.9154.5160.0178.01.03100.45.75.50.73.82.02.2

2011145.1120.999.8123.5241.8161.3165.3184.21.0350-0.10.33.60.54.53.14.0

20121.02502.3-4.02.42.53.62.33.3

2013

20012.9

2002100.0100.0100.0100.0100.0100.0100.0100.020023.716.3

2003102.9100.7103.498.5107.7102.7106.3104.820032.99.4

2004107.6101.6105.0103.3117.5108.2111.5112.220044.615

2005113.3104.5106.0109.7131.5115.8117.5118.620055.310.7

2006119.798.7105.4116.8145.2122.7123.5130.020065.617.8

2007126.3101.4105.4122.9167.0129.3131.6140.320075.511.4

2008130.8117.799.4126.2181.3130.5136.9150.620083.69.8

2009128.9115.894.1113.4195.3128.9138.1152.12009-1.55.8

2010132.8116.399.4119.6196.8133.8140.9155.420103.19.7

2011137.5116.299.7124.0197.8139.8145.3161.520113.511.2

2012140.9118.895.7126.9202.7144.8148.6166.920122.59.9

2013143.6121.598.7127.9208.4148.0151.4170.9

2014145.9128.397.3127.9214.4149.9154.9174.7

2015147.7120.7100.41127.5218.7152157.1179.6

Q1/133400549

Q4/1233771419.99.9

Q3/12328209311.1

Q2/12320736311.4

Q1/12313905910.7

Q4/11307258911.211.2

Q3/11295449410.0

Q2/1128796939.0

Q1/11283544010.4

Q4/1027620969.79.7

Q3/1026861476.6

Q2/1026430989.0

Q1/1025672158.7

Q4/0925189235.85.8

Q3/0924244802.2

Q2/0923618072.8

Q1/0924048586.9

Q4/0823810359.89.8

Q3/08237271812.6

Q2/08229827814.0

Q1/08225028112.9

Q4/07216893411.411.4

Q3/07210631513.8

Q2/07201633716.1

Q1/07199378616.9

Q4/06194765017.817.8

Q3/06185159414.8

Q2/06173741313.3

Q1/06170605512.6

Q4/05165291610.710.7

Q3/05161257712.2

Q2/0515330339.7

Q1/05151536212.2

Q4/04149314615.015

Q3/04143671315.1

Q2/04139785613.8

Q1/04135029312.9

Q4/0312978989.49.4

Q3/0312485239.1

Q2/03122828611.1

Q1/03119644112.0

Q4/02118611916.316.3

Q3/02114469816.3

Q2/02110590415.5

Q1/02106792712.0

Q4/0110198510.0

Q3/019840370.0

Q2/019576860.0

Q1/019532460.0

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

-

10

20

30

40

50

60

70

80

90

Q1,2005 Q4,20006 Q3,2008 Q2,2010 Q1,2012 Q4,2013 Q3,2015 Q2,2017

RSA Agriculture, Forestry & Fisheries GDP: 2005 -2017

Year-on-Year quarter change (RHS) Agriculture Gross Value added (R Million): Real 2010 (LHS)

Source: Stats SA and Agbiz Research

Mean GDP growth per annum: 2.07%

Four provinces account for 80% of agricultural production over the past two decadesShare of agriculture production by province in 1995 Share of agriculture production by province in 2015

21

KZN29%

WC24%

MP9%

LP6%

FS6%

GP10%

NC6%

NW4%

EC6%

KZN30%

WC23%MP

9%

LP9%

FS7%

GP6%

NC6%

NW5%

EC5%

Source: Stats SA, Agbiz Research

For today…….







7. Wrap up22

Field crops

• Maize – major staple, net exports, ~85% GM

• Wheat – also staple food, net imports (~45% of demand)

• Sorghum – declining significance

• Soya – growing importance, cake imports, ~90% GM

• Sunflower – growing importance, S/D in balance

• Canola – growing importance in Western Cape

• Groundnuts – net exports, but declining

• Dry beans – net imports, mostly from China

• Gross value of crop production in 2016 : R57.4bn

South Africa’s total maize production showing good growth…

25Source: CEC, SAGIS, Agbiz Research

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

14 000 000

16 000 000

18 000 000

1994/95 1997/98 2000/01 2003/04 2006/07 2009/10 2012/13 2015/16

Hec

tare

s

Tonn

es

Porduction (LHS) Area (RHS)

South Africa’s maize production…

White maize production set to decline, but still above the country’s annual maize needs

Yellow maize production set to decline, but there are large stocks to boost supplies in the new marketing season

Source: CEC, SAGIS, Agbiz Research

-

500 000

1000 000

1500 000

2000 000

-

4000 000

8000 000

12000 000

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18*

Hect

ares

Tonn

es

Production (LHS) Area (RHS)

-

500 000

1000 000

1500 000

-

2000 000

4000 000

6000 000

8000 000

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18*

Hect

ares

Tonn

es

Production (LHS) Area (RHS)

27

White and yellow maize prices

Source: JSE, Agbiz Research

SAFEX maize prices to remain pressured in the near term…

• Both white and yellow maize prices are trading along the export parity levels, as large supplies (large carry over stock of 4.1 million tonnes form the 2017/18 marketing year, as well as expectations of 12.42 million tonnes in the new season) continue to keep prices under pressure.

• In 2017, white and yellow maize prices averaged R2 161 per tonne and R2 097 per tonne, respectively, down by 51% y/y and 38% y/y, thanks to the record harvest.

• In the last week of March 2018, white and yellow maize spot prices settled at R1 891 and R1 961 per tonne, respectively, which is 4% and 6% lower than the corresponding period last year.

1 000

2 000

3 000

4 000

5 000

6 000

3-Jan-11 10-Oct-11 23-Jul-12 2-May-13 10-Feb-14 17-Nov-14 27-Aug-15 3-Jun-16 10-Mar-17 15-Dec-17

Tonn

es p

er h

ecta

re

Yellow maize White maize

Horticulture• Viticulture & Wine – major export industry. Drought-hit now with

20% decline• Citrus – SA’s biggest ag-export, growing but CBS issue & FCM….? • Deciduous fruit – major net exports• Table grapes – major net exports• Sub-tropical fruit – net exports, and growing….• Vegetables – S/D balance, some imports/exports• Nut industries – significant growth off low base

Gross income from Horticulture (R bn)

2012 2013 2014 2015 2016

R41.8 R47.6 R53.9 R60.8 R72.6

Animal production accounts for just under half of total agriculture production : R116.73bn (2016)Agricultural production by sub-sector Animal production share over time

29

Field crops (R57.4bn)

23%

Horticulture (R72.6bn)

29%Eggs (R10.2bn)

4%

Poultry (R38.6bn)

16%

Other live animals

(R67.9bn)28%

Source: DAFF, Stats SA, RMB Global Markets Research, Agbiz Research

0

11

22

33

44

55

1995 1998 2001 2004 2007 2010 2013 2016

poutry and eggsCattleSheepOther

% of animal production

Beef exports

For today…….







7. Wrap up31

SA Agricultural Trade Balance

Source: International Trade Centre, 2017Graph: Agbiz, 2017

Source: International Trade Centre, 2017Graph: Agbiz, 2017

Trends in South Africa’s agricultural exports per region

-

500 000

1000 000

1500 000

2000 000

2500 000

3000 000

3500 000

4000 000

4500 000

5000 000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US D

ollar

('00

0)

Africa EU Asia Americas ROW

34

Risk to collateral, “expropriation without compensation”

-

20

40

60

80

100

120

140

160

1980 1985 1990 1995 2000 2005 2010 2015

Nominal Real

Rbn

Land and Agricultural Bank

29%

Commercial banks60%

Agricultural cooperatives

7%

Private persons2%

Other financial institutions…

Other debt1%

• Total agriculture farm debt

Source: DAFF, Agbiz Research

Agricultural employment

Indexed GDP: Agro-processing vs Manufacturing Output

36

Agro-processing: ~25% of MO and ~3.5% of GDP

For today…….







7. Wrap up37

Fields of legislation1. Credit legislation: Reg. 19 (Credit bureaus) + National Credit Amendment Bill

2. Carbon Tax Bill: Trade exposure important

3. Labour legislation: NMWB + LRAB (Nedlac package)

4. Competition Amendment Bill (In Nedlac now)

5. Water rights: - NWRS + Water Masterplan – New Water Bill & ELU

- Water licence application regulations & Water tariffs

6. Land reform: - Expropriation without Compensation

- Regulation of Agricultural Landholdings Bill- Draft Property Valuation Regulations (Property Valuation Act)- Communal Land Tenure Bill- Communal Property Association Amendment Bill- Preservation & Development of Agricultural Land Framework Bill

For today…….







7. Wrap up39

10 Factors determining the future of Agri-food system

1. Consumer trends2. Consumer activism3. Rate and impact of technological development, and adoption4. Increased regulation of agri-food system5. Climate change, and water availability and cost 6. Improved and transparent communication7. Sustainable use of land and water8. Trade agreements9. Big Data10. Skills and talent factor

40

Wrap up• Relatively healthy and robust agro-food industry: open, competitive markets driving

efficiencies

• Relatively technologically advanced, globally competitive sector (Rand factor)

• Challenges: Investment environment, Agro-logistics, water availability and quality,environmental sustainability, R&D, crime and security, labour relations & legislation,land reform, climate change, trade agreements, sustainable transformation, etc.

• Opportunities: Growing population, consumer spending trends, new markets(especially to Africa and the East), new technologies & improved productivity, etc.

• Major contributor to Food Security, growth and employment in RSA.

• We live in uncertain times – many risks and variables, some controllable, others not orless so. The playing field and rules of the game are changing – adapt.

• However, risk creates opportunity, and concentrate on those risks you can manage!

41

Thank you

www.agbiz.co.za

Major trends driving the �future of Agriculture For today…….Challenging and complex environment evolvingGlobal Socio-political DevelopmentsDemographics…..Global Socio-political DevelopmentsLocal Socio-political DevelopmentsFor today…….Slide Number 9Slide Number 10Food Security ImperativeComponents of Food SecuritySlide Number 132017 Global Food Security IndexSlide Number 15For today…….Capital Assets in AgricultureSlide Number 18SA economic growth: Tradable goods sectors �lag the non-tradable goods sectorsSlide Number 20Four provinces account for 80% of agricultural production over the past two decadesFor today…….Slide Number 23Field cropsSouth Africa’s total maize production showing good growth…South Africa’s maize production…SAFEX maize prices to remain pressured in the near term…HorticultureAnimal production accounts for just under half of total agriculture production : R116.73bn (2016)Beef exportsFor today…….SA Agricultural Trade BalanceTrends in South Africa’s agricultural exports per regionRisk to collateral, “expropriation without compensation”Agricultural employmentIndexed GDP: Agro-processing vs Manufacturing OutputFor today…….Slide Number 38For today…….10 Factors determining the future of Agri-food system Wrap upThank you��www.agbiz.co.za

major trends driving the future of agriculture … · • estimated value of capital assets at end...

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