The economic ramifications of these outbreaks are profound. They extend beyond the immediate impact on yields and resonate through the market, influencing the security of sales and exports. For instance, the avian influenza outbreak has led to substantial losses in the poultry industry, which is a cornerstone of South African agriculture.
Over a hundred commercial poultry facilities have reported cases, resulting in massive culls and a surge in imports of fertilised eggs to rebuild the local breeding stock. This has not only affected producers but also led to a noticeable increase in the price of eggs, impacting consumers directly.
In another example of the economic impacts, a recent outbreak of foot-and-mouth disease led to a 12% year-on-year decrease in beef exports in 2022 due to the temporary closure of various export markets. This represents a significant setback for a country where agriculture is a vital economic engine and a primary source of employment, especially in rural areas where economic development is so urgently needed.
Similarly, for crop farmers, diseases like Citrus Black Spot and the presence of pests such as the Fall Army Worm compromise the integrity of crops, limiting not only yields but also the export potential of these commodities.
Banks and other financial institutions, aware of these risks, now typically expect relevant biosecurity measures to be in place to mitigate the risk of the credit extended to farmers. Alternatively designing insurance solutions should be part of the credit application process.
For most banks, including FNB, biosecurity is not just about protecting against the immediate threat of a specific disease; it's about ensuring the long-term sustainability and viability of the agricultural sector. And the understanding is that producers, and processors, are responsible to both the markets and consumers to maintain the highest possible biosecurity standards.
However, despite the general recognition of the clear need for robust biosecurity measures, the implementation comes with its own set of challenges. The costs for farmers to establish and maintain such measures are often significant. Furthermore, there is a discernible lack of resources, with lower than optimum service levels from the government due to a scarcity of state veterinarians, many of whom are moving to the private sector, opting for work with companion animals over livestock. The shortage of vaccines exacerbates the issue, with production capacity struggling to meet demand.
Fortunately, there are glimmers of hope, as discussions about private sector involvement in vaccine supply are underway. The avian flu outbreak has also prompted initiatives to register companies able to import these vaccines. Any such increase in vaccine production and importation would go a long way towards alleviating some of the cost burdens and availability issues currently plaguing the sector.
The role of industry organisations in this landscape is also becoming increasingly crucial. These entities provide invaluable guidelines for agricultural best practices, which are essential for maintaining a line of defence against the spread of diseases. These guidelines are devised not as a burden on farmers, but rather as a beacon to guide them towards sustainable and secure farming practices. And financial institutions are increasingly collaborating with these organisations to align their agri-funding activities with the best practices they recommend.
Ultimately, while the cost of implementing biosecurity measures can be daunting, the price of inaction is likely to be much higher – for farmers and consumers. The potential for economic loss, negative trade implications, and profound impacts on food security make it imperative for South Africa to invest in bolstering its biosecurity system.
Through collaboration between farmers, industry bodies, and financial institutions, South Africa’s agri sector can overcome these challenges and safeguard the livelihoods of farmers and the wellbeing of the country’s consumers.
