Agriculture in 2019

In collaboration with Nedbank

Five of the last seven years have been drought years in Namibia. With below-average rainfall this far in the rainy season, 2019 looks set to add to this tally. Government will consider towards the end of April whether to declare a drought state of emergency (which would be the third such announcement in six years). While agriculture does not contribute much to GDP directly (less than 5% in recent years), it plays a significant role in employment. The latest available National Labour Force Survey (NLFS 2016) indicates that ‘Agriculture, forestry and fishing’ accounted for 20% of all employment across Namibia, making it the largest employment sector in Namibia.

Source: Namibia Statistics Agency

Given Namibia’s economic depression since the 2016 NLFS, as well as news reports and anecdotal evidence, expectations are for an increase in the unemployment rate to be announced with the 2018 NLFS release in the coming months. Along with this, one would expect to see an increase in employment captured under subsistence farming as some of those who lost their jobs resort to subsistence farming, especially in rural areas, to get by.

South African feedlots have become enthusiastic participants at domestic livestock auctions over the past few years, taking advantage of lower maize prices in South Africa. This demand drove up weaner prices, and with local farmers rightly taking advantage of this, has seen live cattle exports breach 300,000 for the first time – and for two consecutive years (2017 and 2018). With such high export volumes, particularly attributable to the younger animals, and the impact of looming drought, the national herd is being depleted faster than it can be replenished and while not immediately problematic, may see issues arise in the next few years.

Source: Meat Board of Namibia

Regional crop farming will not escape the drought either. Preliminary data suggests sufficient maize area has been planted in South Africa (about 1.3 million hectares of white maize and 1.0 million hectares of yellow maize), but experts expect this to be revised down slightly. South Africa will, however, in all likelihood produce sufficient maize to meet local demand and still export. Poor rains in Zimbabwe, on the other hand, will see the ‘breadbasket of Africa’ likely being a net importer of maize again – and the same goes for Namibia. Late and erratic rainfall make the timing of planting difficult, and understandably adversely effects the harvest.

While livestock and crop farming understandably receive most of the attention, Namibia’s horticultural produce often go under the radar. The Agro-Marketing and Trade Agency (AMTA), however, keeps track of local production, imports and exports. Namibia exports a range of horticultural produce, such as butternuts, dates, onions, tomatoes, watermelon, and table grapes. The value of horticultural exports in FY2016/17 totaled N$680.5 million, growing to N$817.8 million in FY2018/19.

Source: Agro-Marketing and Trade Agency

The most valuable produce per ton were table grapes (N$20,000), butter lettuce (N$20,965) and dates (N$32,828). While the unit price for dates is the highest by some margin, only little over a ton of dates were exported last year. Table grape exports were valued at N$566.8 million in FY2016/17 and N$636.1 million in FY2017/18, accounting for 83% and 78% of total horticulture exports respectively. Recent reports around very low water levels of the Orange River could see these grape exports jeopardised, as the farms rely on the river for their irrigation. These farms not only earn the country much-needed foreign currency through their exports (helping guarantee the currency peg with the rand), but also provide jobs in areas suffering from higher unemployment.

Source: Namibia Statistics Agency

Exports of beef, live cattle and table grapes have earned more than N$3 billion annually for the past two years (according to data from the NSA). Interestingly, the export value of fresh grapes surpassed that of beef (but not live cattle) in 2018 – although in part due to a large drop in the value of beef exports. Namibia’s agriculture sector is an important source of employment and foreign currency earnings for Namibia, as well as aiding in reducing the stubborn trade deficit. Unfortunately this sector is not only influenced by domestic factors (such as policy), but it is often at the mercy of the elements, as is the case with the current drought. The growth in horticultural produce, such as table grapes and dates, are however evidence that traditional agricultural products (such as livestock or cereal crops) are not the only path to follow in the sector, but that there are a variety of high-value crops.