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A shared South African industry-government vision makes for promising economics

For the fresh fruit industry of South Africa, going solo and operating in silos are as outdated as relying on a horse and cart to get around, says Fhumulani Ratshitanga, CEO Fruit South Africa (FSA).

“The R63 billion export-oriented fresh fruit industry of South Africa relies heavily on specific services by the South African Government. It’s only through well-negotiated, favourable trade agreements and other market access requirements initiated by government, that the industry can successfully penetrate export markets around the world, while competing successfully. Therefore, the role of government greatly impacts the ability of the industry to navigate the competitive international fresh produce terrain, and to – consequently – contribute meaningfully to the national agenda,” states Ratshitanga.

Given the importance of these government functions, and the potential economic ramifications, alignment between industry strategic focus areas and government policies is critical.

Economic growth, job creation, and infrastructure development

The nearly 325 000 jobs supplied by the industry are vital for the livelihoods of rural communities in South Africa, where most farms are situated.

Therefore, policies that drive infrastructure development and investment incentives are key. Billions of rands have been lost by the fruit industry due to acute inefficiencies at the ports. These lingering challenges attest to the critical importance of infrastructure development on the national agenda. The industry continues to advocate for increased private sector participation at the ports, to unlock broader economic growth.

Market access

“The protracted nature of market access negotiations regarding key international markets, is indeed an impediment to sustainable industry growth. It’s important that relevant government policies and programmes facilitate access to international fresh produce markets. These policies hold significant economic benefits if consistently implemented. It’s equally important that government policy mitigates protectionism against the import of South African fresh produce,” says Ratshitanga.

The National Minimum Wage

The latest National Minimum Wage increase by an above-inflation 8.5% (effective 1 March 2024), is the latest of a total increase of 122.24% over the last 10 years. This aggravates the pressure on producers who are already operating amid mounting economic challenges, which can result in job losses in a fragile economy.

“But, there’s an opportunity here for the agriculture sector and government to collaborate in crafting specific social strategies around wages that will alleviate poverty and grow food security. With the 2024 South African general election looming, the industry remains hopeful that agriculture will continue to be prioritised, given its role in job creation, economic growth, and sustaining the viability of the rural communities in South Africa,” concludes Ratshitanga.

The article first appeared in FreshPlaza. Read it here.

Find the relevant Agribook fruit pages on the horticulture landing page.

 Photo by Jo Sonn on Unsplash