 Good evening, everybody. Welcome to the Private Property Farming podcast. My name is Mbali Nwoko and thank you so much for joining us this evening. Today, we have a familiar face once again, Svissan Tombella, trade economist with the National Agricultural Marketing Council. And today's topic is all about the agricultural landscape once again. It's 2021. It's a new year. And we are just towards the end of the first quarter of the year. So, Svissan is just going to give us a brief overview of what's been happening in the industry with regards to farmers, with regards to trade policies, the African Free Trade Agreement. We're going to be discussing how farmers have been operating in this first quarter, the challenges that they experienced, the opportunities that they experienced, etc. So, Svissan will just give us a great overview so far with regards to what's happening in the agricultural landscape. If you have any questions specifically on our topic tonight, please feel free to ask, to comment on the live show and ask our guest any questions that you might have. He's quite a knowledgeable individual. So, I'm quite confident that any question he's able to tackle. So, whether it's regarding the African Free Trade Agreement, important exports, minimum wage, etc. I think this conversation will be quite insightful to many of you who just want to know exactly what happens in the industry. Once again, as I always say in the show is that please like, comment and share. The podcast would be live on YouTube after this live if you missed it. And I also encourage you to take part of our Sherlock Holmes competition. We're still in our weeks running every single week. We announced the winner. And it's all about that riddle. So, yeah, please look on our social media pages, as well as our website, just to find out more about this competition. But without further ado, I just want to get straight into our conversation. Svissan, how are you doing? I'm doing great. I'm doing great. But thank you very much. And could you be here once again? Absolutely. I'm happy to have you back onto the show because, you know, we need to keep poking geniuses like yourself so that we can educate ourselves about the industry. And yeah, some thank you for me. I thank you for making time to be part of this conversation this evening. So let's start off with, you know, what's been happening in the first quarter, you know, lockdown restrictions have eased a bit. You know, how are the grain farmers feeling? Those that are supplying in the brewery sector, we've had a lot of rains throughout the country in January as well as February. And still, I think in the start of this week, I'm definitely still having, I'm having rains at my farm right now. So what's been happening as we are just closing off this first quarter of the year? Yeah, thanks. It's really been, I think, overall, it's been really a good start. I think down from agricultural perspective, we sort of continue from the last momentum we had towards the end of last year. But as you know, as a farmer yourself, in agriculture, we sort of want to make a ground of too much rain on its own as it becomes a problem on its own. And I think we at some point, we had some very harsh rain that caused some little bit of damages in some of the flood areas across the country. And one of the impact that it also had is delayed the harvest, particularly in the wine industry, we saw that it's most of the grapes are still being delayed and to a certain extent, even our summer fruit were impacted. But I think on the net part of it, in overall, I think it has been a very good first quarter of the year, starting off with expecting really good crop starting to show up in the grain farmers. They should again see a very good harvest this year. We be expecting the animal industry to continue on their recovery and restocking from the very long period of drought that affected them in the past four to five years. So I think in terms of the export front as well, we're starting to see those export oriented commodities continue to show a very good fronting. We expect in the citrus industry to continue being our shining star on the export side, as well as some of the industries such as the treble crabs and the stone fruit. So in overall, we're still hoping that we'll continue to be registering positive numbers and the overall outlook of the sector is looking positive. Right. You know, I always say this to you that I like speaking to economists because you like to forecast things, right? And always look at historical data and obviously project what's going to happen in the future. But with what's happening in the global economy, I mean, the little that I was able to gather, I think at the start of this week is that a number of European countries are actually going back into harsh lockdown restrictions. So as much as Jan Feb and March made it might have been positive with good rains and supposedly maybe also a bit of a a setback to many other farmers because we couldn't harvest, etc. Do you think the next quarter, as you've mentioned, will be that great seeing that you know, a number of European countries are going back to harsher lockdown. So won't that have a ripple effect in the long term, especially in the next quarter or the third quarter of the year for for the South African agriculture industry? Certainly. And I think for to respond to that question. I think it's a very excellent question you have posed there. We'll have to elevate that beyond agriculture and look at the entire economy. And we seem to be because we are integrated in the global economic system. And we seem to relate the behavior of these Western countries. And because they are going to this hard lockdown because because they are mainly the consumers of our general commodities, whether you're looking at a manufacturing space or whether you're looking at the industrial commodity that we tend to export, including even some of our mineral commodities, they go to these industries. So what will happen with their commodity, with their reduced consumption because of imposed lockdown, it tends to affect our trade capabilities. And it's changing even on not only just on commodity, but also on services, because the movement of persons, especially business persons, tend to be affected. And that has a knock on effect. And we've already seen the impact of that even in last year, in last year, second quarter of how impactful it was. And I think to also come back to the domestic market, domestic economic side is that some of the commodity, some of the sectors that were hardly impacted in the previous year, we are likely to see that impact might not be at a very sensitive effect than it was last year. But we must also seeing that recovery that we so dearly expecting being much slower than the V shape recovery that we always expected it in the beginning. And so the tourism industry was that being affected, the trading that is that being affected, transport system was that being affected. And all that will not budge well in aggregate demand of our commodities, which will have a knock on impact also on our job numbers in the country. I see. And let's talk about the African Free Trade Agreement. You know, it's been implemented. It's been signed off, etc. What type of opportunities currently exist for South African farmers to trade with farmers across the African continent and vice versa, which commodities are seeing a positive in terms of trade or in demand? What could you tell us about the current trade agreement and the opportunities that exist for farmers alike? That is an exciting development that is shaping within the continent. I think yesterday I was with some of the colleagues also from Tralek and Trudy, which they do an excellent job in terms of the immigration fund with different government states in the continent. And I think from the positive side of it is that with this free trade agreement that came in from the 1st of January this year, it makes it now it reduces at least from the tariff point of view the cost of trading with other African continent and we are able now to have this single biggest market in the world. If you think of it that you have one billion free trade agreement in the continent now. And so South Africa has always been, if you're looking at it with its trading partners in the continent, is that we tend to because we have some industrial capacity to even add value addition into our agricultural products, but also other non- agricultural products. And we think that that will then give that emphasis to our to our farmers and businesses alike to start trading more freely and more openly with not only with Saudi countries, but also with East African countries with also with Coelsa on the Western part up to the north. So we hoping this is a start of the realization of the Keptucario dream. I must emphasize as well that the the signing of African trade agreement is just one of the programs that are run by the African Union. We know also that they are as part of the agenda 2063 for the African continent to really create this inclusive harmony within the continent itself. So we foresee this bringing more opportunities if you come home from our farmers in the green space where we not only just exporting maize, we can also export other commodities within our green industries. We foresee them starting to have an opportunity to export some of our animal product, particularly those that are processed as well as our fruit juice and other process products such as your feed into those animals where they don't have that capacity in that area. But it must also then do emphasize this to say while we are very excited in their tangible opportunities that can really be materialized, not only just as in we're seeing Africa as an export destination, but we also see our neighboring countries in the Saku, in the Nisadek and up north being also a potential to start building these business opportunities so that we not only just seeing them, we create these win-win situations so that we also uplift the economies of those of those countries and they are great potential of even improving infrastructure. We know some of the African countries have better souls than we do but we have the technology in terms of seed development, we have technologies in terms of input utilization and we can be able to translate that services into those countries so that we also build this partnership because we don't want to only see South Africa being uplifted in terms of their business communities. We also want to see those other African state taking the queue from South Africa and starting to build up their own community so that even their citizens are developing and are educating that reaching the gap of development between the South Africa and other communities and that will also require that those countries also invest in some of the unknown tariff measures that inhibit for businesses to do and prosper effectively as we want it but it's a very exciting time and we're hopefully that it's only a start of the good things that will unfold. Yeah and I suppose we would obviously must hope and pray that we don't get go into tighter lockdown restrictions because I can imagine that you know it could obviously affect the trade. Absolutely and the problem with once you start having these regional or continental value chain you start having businesses investing in their business logistics and investing heavily on also on relationship and network to do these businesses and with hard lockdown and border closures what does that does not only impact the short term income of those businesses that are invested in such value chain but it also have a medium to long term impact of reviving consumer confidence in getting some of those commodities as you are. You will know very well as yourself as a farmer and servicing some of the retailers that once your product is put in the shelf consumers expect it to find it consistently and once that value chain and supply chain is broken it tends to be a mistrust on it and restarting that and building again and investing on the consumer confidence tend to be a very big sound cost and that's one of the things that comes with some of the lockdown as much as we do understand and we do emphasize the need of complying with how the regulation it also important that they're done in the manner that put safeguards of protecting the very already fragile economies within the company. Right and how is South Africa doing in comparison to other African countries especially from the agricultural landscape you could speak about many just different commodities whether it's citrus whether it's maize or field crops to be specific how are we performing in comparison to our African counterparts? I think we still performing relatively well I think in the front of having proper systems in place commercialization of our food system and the sophistication part of it and the value chain as well as the culture for our perishable product by far I think we're still leading the front on that part and also ensuring that we have even though it might not necessarily be true for our small-scale farmers in the country but also having a much more efficient and established credit system especially for the commercial and large farmers I think we are doing relatively well in comparison with our farmers and what that tends to do it make us really be a leader in some of the very sophisticated commodities such as your fruits and beverages in terms of processing them into juice and add an alcohol and non-alcoholic beverages similarly also in your grains whether you're looking at those that we have the environmental capability of producing them and also the adoption of technology as you know that in our grain system we also adopted your GMO's varieties which makes our yields much higher as compared with our counterparts in the rest of the continent so in that front I think we're doing relatively well where I think South Africa can take take note and some of the examples from the rest of the continent is how do you also start integrating that with your smallholder farmers especially in the substance farming and in the communal areas and bringing them in terms of providing this input and more importantly the localization of input provision and localization of agri-processing so that you also create jobs at that elementary level of sector and I think if you're looking at countries like Kenya if you're looking at countries like even not as far as Kenya even here Zambia or other countries there seems to have found some models if you're looking at Kenya the way they're doing in their net industry as well as in the avocado industries they have that integrated system that tends to work very well which I think we can copy and be able to replica that in South Africa similarly we don't even have to go that far even in the animal industries when you're looking at the countries like Namibia and how they really integrate that even the system they have in terms of biosecurity measures to control them I think it's one of the areas we can adopt so that we can uplift also our smallholder farming system in the country Wow coming back home and I know that you are someone who studied wine making how is the wine industry how is the wine industry able to pick up in the in this first quarter is there any steady progress in its operations maybe if you could just give us some insights as well particularly with the wine industry very interesting and I must be careful now my very first meeting tomorrow we are engaging with the industry captain from the wine industry but I think it's one of the few industries that has really had a tough time since the the corona started and I think they continue to be better I think let's start with the with the reins of the Spokapod and our opening podcast and it's really a very unique season that they are facing even from the weather perspective that they are delayed which on its own it's hopefully has has that silver lining in terms of the large stock or stock piling that they've had because they couldn't sell last day and this delayed season in terms of harvesting has gave them a slight window of breathing because of the storage facility that they were suffering with that they couldn't move those grapes much quicker in their sellers because the tanks are still full with one but in overall I must emphasize that it's one of the industries that is still very much struggling in terms of how it could allocate to some of those wine stock that they couldn't place them into the market because of the lockdown which really has constrained their profitability and their cash flows level which when on even affecting the even the employees into that industries but I think what is coming on also in the industries which they just to assist them also at least in the short term over and above the different relief forms that can be created with the social partners whether it's government and other players in the industry it's also finding some alternative rules of how they can use this excess wine that they have whether they tend them into alcohol based sanitizers so they find new business opportunities to use so they can be able to sustain it but in overall we're hoping that the wine industry with the economy starting to recover they will also start being will start in the downside start recovering and I think in the short term measures such as also either a suspended or a delayed connection in some of the Texas Texas and other areas could assist them in the very short term with some of the cash flows and while they're trying to fund their food but it's an industry that is significantly struggling at the moment and I think there are various discussion and talks to say how can it be assisted because it's such a critical industry not only just for upliftment of those farming communities in the Western Cape and Northern Cape but also it's one of the biggest generator of foreign endings and keeping them afloat will be in the interest of the country If you're joining us tonight this is the farming podcast brought to you by Private Property and we have Sfis on Dombelo who's the trade economist of the National Agricultural Marketing Council and tonight's topic is all about the South African agricultural landscape pretty much focusing on this first quarter of 2021 so if you missed the first part of our conversation definitely this podcast will be live on our YouTube channel but going back into our conversation please post any comments or questions to Sfis so that you want to know and anything that you want him to clarify based on you know the wine industry the African Free Trade Agreement the agricultural sector has performed from a GDP perspective in the first quarter we're happy to take some questions on tonight's show Sfis going back to the point that you mentioned about the wine industry having to struggle and you know and that you're seeing that in the next coming months or quarters it's just going to be very tough for them to obviously get back into business as normal or business as usual making profits let's talk about this recently launched government initiative to be funding farmers what is it about what is the intention behind that which farmers is it targeting and specifically maybe in which commodities yes so maybe let's start with the commodities so one of the commodities defined and it's a fund between well it's all government entities but between the National Department and the IDC as we know it's one of the financial institution that is providing development in the country and I think it's focusing mainly on your high value export oriented also commodities such as your fruits the nuts and also those niche products such as your berries but also those that are very strong in terms of also interlinkages with agro processing component such as your poultry and other animal product and coating which is reviving its run so those are some of the commodity that is focusing on but I do believe as well that if you have a very viable and striving business you can also be able to access that commodity I don't think it will be that street to that it doesn't look at other agricultural products when there are opportunities for that but in overall it's just focusing on agriculture and agro processing related products and I think one of the theme which we must really emphasize but is that agriculture for some time now in terms of the development finance specifically has really been struggling we know the challenges that the land bank have faced and I think and also the fiscal constraint that the government themselves is having so there's a need to start having such of some of the blended kind of instrument that can use what government has in terms of their grant funding and use some of the developmental soft loans and how do you blend that so farmers can have not so excessively priced or costly interest but also not money that is not sustainable in their businesses so I think that's more or less the idea behind it and this is idea that has been around for some time where the different industry players have been promoting this blended finance kind of system to say you deal risk some of the issues that are faced by the farmers and you make it easier for them to access both grant and loan funding part of it and I think these are some of the instrument that are now starting to come forth and the reason for that is that farmers themselves have to be able to have excess into affordable working capital so they continue to produce and they can be able to procure some of the farming equipments that they require what remain the challenge because this one as you see some of the criterias of that it's more focus on farmers that have already started putting their foot on the onto the sector so the farmers that wanna take a next step into the commercialization part of it or even upscale already what their commercial commercial enterprises or operation had been so it's really targeting those kind of farmers that you have of course in terms of the entry of those farmers that wants to enter into the sector or that then have the financial strength to back it up or to be regarded and we're hoping that there will be some instrument that will also cater for that bottom of the pyramid section for farmers but this one specifically that was launched is looking at those farmers that already have at least their foot into the sector and ensuring them how do you uplift them into the next level by affording them a much more affordable capital to continue farming competitively and profitably right and so where do farmers apply do they go directly to the Department of Agriculture or do they contact the IDC in this case so you can be able to apply into the because they are different instrument and especially that we always encourage farmers to also be associated with Commodity Association because then that's where they also have information in terms of how to go about building these business plans and the latest market trends and commodity trends in that community that you're operating in that and once you have all those information you can be able to contact the IDC directly and they're able to assist you with terms of this A to Z step of how to go about it but also you can be able to contact your provincial offices as in agriculture as well as the national offices because this is an integrated system that you all channel you into the right place and they are waking hand in hand and then you are able to also understand the detailed part of it to say which component in your business operation as you apply for it will be regarded as a loan component and which part of it will be regarded as a loan component and the overall net effect and the benefit that you'll be achieving when you go with that option that then perhaps maybe going with a much more commercially oriented fully private kind of setup on it so those benefits and pros and cons of it farmers can directly engage with other the department or with the with the IDC specifically Wow well that's a positive and I suppose in this specific launched funding by government this is separate to the capital injection that land bank is receiving as we heard from the minister of finance so this is definitely separate so does this mean that farmers indeed can take advantage of this new government initiative and maybe also approach the land bank now that you know the government is assisting them with a bit of recapitalization absolutely but you've put it so correctly and I think it's also important to way where we start seeing some positive indicators we acknowledge them I think the stabilization of the land bank in terms of the management and also hopefully that the board that has been instituted is starting to bring in that confidence in terms of governments and putting processes in place and these are now this capital injection by government it also shows some confidence that at least governments still consider land bank is the most critical institution for development of agricultural sector and we're hoping this will be a much more positive result where farmers now can start going back into the land bank because as I said alien you still need land bank because it kept us even the the acquiring of the land itself and actually getting into agriculture so it has a much more unique and a critical role that the land bank have to see over and above that I think some of the system that was launched by the the minister of agriculture last year with the counterpart in the provinces as well where they were also catering for the subsistence and the most vulnerable farmers and I think paying into attention to those kind of program as well because that that those kind of system become and those funding it becomes an instrument that creates a bigger pool where land bank and IDC through this recently launched fund in the long term can start looking at the bigger pool of farmers that can be uplifted into the next stage of commercialization and development into sex so all three of these different financial and credit instrument are so critical because they they nature and they ensure that you nurture all different farmers and you protect them and you support them up until they are able to compete freely and very and they participate more meaningfully into our economic system Wow thank you so much Fiso for your valuable insights today I definitely learned a lot in addition to what I really know but you were able to give a different spin into you know what's been happening in the sector and I'm quite positive as a farmer you know with all these things that you're saying because again I think from a farmer's perspective you know we're straight into our farms focusing on our production on a daily basis but it's always refreshing to get an overview of where the sector is going the agricultural landscape the positive impact in the economy you know what should we how should we position ourselves in the next coming quarters especially now that we're still in lockdown and you know living in a COVID world in a COVID world but yeah I thank you so much for your time this evening and to any of you that are watching and listening tonight I think we ended on a positive note with regards to the recently launched government funding because I know we always get questions and inquiries about where can I get funding where can I get funding and it's also a positive that land bank is one such bank that is also being assisted by government and it's being noticed by government to help particularly black farmers or emerging farmers as the term that is used almost always used but Charles Fisa thank you so much for your time this evening and good luck for your meeting tomorrow thank you very much and thank you for the invite once again and I really appreciated the chat thank you it's a pleasure thank you so much for your time that's it and we're in conversation with Fisa Dombay who's the trade economist of the NAMC once again you will catch this interview or this conversation rather on our YouTube channel under the private property farming podcast playlist on the private property YouTube channel again if you missed it that's where you'll find the video and if you have any questions that you want to ask us please feel free to ask on the YouTube channel and we'll definitely respond accordingly but thank you so much for joining us this evening it's a wet night in Johannesburg for myself so from wherever you're joining across the country I wish you a good night and God bless see you next week thank you thank you