The future of farming: South Africa's agricultural sector in 2025

The agricultural sector in South Africa has experienced a year of mixed fortunes in 2024, with challenges and opportunities shaping the landscape for the year ahead. As we delve into what to expect from the South African agricultural sector in 2025, Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of South Africa, and John Hudson, Head of Agriculture at Nedbank Commercial Banking, provide insights into the key trends and developments shaping the industry. Sihlobo highlights three major sub-sectors within the agricultural economy: field crops, livestock, and horticulture. He discusses the impact of a mid-summer drought on field crops, particularly grains and oilseeds, leading to a 23 percent decrease in harvest. In the livestock industry, challenges related to animal diseases, such as foot and mouth disease, were prevalent, while the poultry sector showed signs of recovery. On the other hand, horticulture saw stability and growth due to irrigation and reliable electricity supply. Hudson reflects on the uncertainties and difficulties faced by farmers in 2024, stemming from political and economic uncertainties, which resulted in decreased demand for credit and investment in long-term projects. However, positive election outcomes led to an uptick in the Agribusiness Confidence Index, indicating a shift towards optimism in the sector. Despite the cautious optimism, challenges related to logistics and sustainability remain prominent. Sihlobo emphasizes the importance of improving logistical infrastructure for South Africa's export-oriented agricultural sector, citing ongoing government initiatives to enhance efficiency in transportation. He also notes the increasing adoption of climate-friendly agricultural practices across the industry. Looking ahead to 2025, discussions around exploring new export markets, including the BRICS Plus grouping comprising China, India, Saudi Arabia, and Egypt, are highlighted as potential opportunities for growth. Retaining access to existing markets, such as the African continent and the EU, remains crucial for sustaining the sector's international trade relations. Hudson expresses excitement about the sector's resilience and the potential for growth through enhanced climate resilience, improved logistics, and increased market access. The adoption of technology is seen as a key driver for progress and innovation within South Africa's agricultural landscape. With a focus on leveraging farmers' expertise and adaptability, as well as fostering a conducive environment for agricultural advancement, the agricultural sector in South Africa looks poised for positive growth and development in 2025.