The Netherlands: Good avocado sales; shortage of larger sizes expected in the short term
The coronavirus crisis seems to be driving up the demand for avocados. A Dutch importer says that avocados are among the most sought-after categories, together with citrus and summer fruits. Peru and South Africa are the countries that will be supplying the fruit in the near future, although the importer says that the volumes arriving are still small. “In the short term, I foresee a shortage for the larger sizes. Of course, that can change later in the season, but now the demand for Hass avocados is particularly good. Sales prices range between 12 and 14 Euro (4 kg) for sizes 14-20 and between 11 and 12 Euro for the smaller sizes.
Belgium: Trade going well
There is currently a great demand for more luxurious products, including avocados. Prices are currently at a normal level for the time of year. A Belgian trader is also satisfied with the quality and appearance of the avocados.
Germany: Low demand due to start of German strawberry season
The avocado market is quiet in the German wholesale. The focus now is on regional seasonal products, like strawberries and asparagus, which are traded in large volumes. Exotics are therefore pushed more into the background at this time of the year, according to a trader from Karlsruhe.
“Until recently, we still had beautiful avocados from Spain. They were very popular among our customers. Now, however, we have switched back to overseas goods, which we receive via Dutch large importers. The origin varies depending on availability and quality.”
France: The logistics is causing headaches at supermarkets
Although the French government is calling on the population to consume French fruit and vegetables, avocados have not been affected. Still, the demand has changed in recent weeks. Consumers are now buying packaged avocados in the supermarkets and no longer loose ones. There are concerns about the supply of French supermarkets, since there are fewer workers for the harvest and transport is difficult.
Spain: High demand will cause season to end earlier
The Spanish avocado season will end about 15 days earlier than last year due to the surprisingly high demand for all sizes, even though the total volume harvested this year (80,000 tons) was greater than that of the previous one. Despite the coronavirus, prices have remained high, even for the smallest sizes that often face strong competition from Kenya, Mexico or Chile. At the moment, prices stand at 14-15 Euro per box and these are expected to remain stable until the beginning of May, when large quantities of Peruvian avocados will arrive on the European market.
Italy: Shift from Hass to Greenskin avocados
There’s no crisis in the avocado market. A major wholesaler in Northern Italy says that the demand remains stable, despite the coronavirus. Retailers and specialist stores are the current sales channels, while the catering industry is absent due to its closure. The focus is increasingly shifting to the Hass variety, at the expense of Greenskin avocados. The Greenskin are supplied by South Africa, Kenya and Peru, while the Hass come mainly from Peru and Mexico. The seasons in Spain and Morocco are now coming to an end. Prices fluctuate, but offer interesting prospects. Currently, a box (4 kg) of Greenskin avocados is sold in the wholesale for between 8 and 12 Euro, while a box of the ready-to-eat Hass oscillates between 13 and 20 Euro.
South Africa: Larger volumes this year; formidable competitor for Peru in Europe
There isn’t a great avocado supply on the market at the moment. Rainfall and the Easter weekend have delayed the harvest, but stocks are expected to increase in the coming weeks. The average price on the local market amounts to around 8.23 ZAR (€ 0.40) and is thus lower than last week. The prospect is that the price will drop if more volumes come on the market.
During the first week of the lockdown in South Africa, fewer avocados were sold due to the closure of the catering industry. Private buyers were also unable to purchase avocados on this market due to legislation that has now been dropped. Exporters say that there is a lower demand for Greenskins in the UK, but that the market for the Hass variety is stable. In the period from week 17 to week 22/23, this year’s larger harvest (30% increase in the volume) is expected to clash with the also larger production from Peru.
There have been sharp peaks in the production, with a record harvest in 2018, followed by a 40% drop in the volume in 2019 and an expected 30% rise in 2020. Growers want to avoid these peaks by manipulating the harvest. The sizes of the avocados are smaller this year, but that is not a concern for the exporters. Most South African avocados are intended for the European market and the UK. As for new markets in the future, exporters see the best opportunities in Japan.
Mexico: Higher prices than usual
There are two main avocado producing states in Mexico: Michoacán and Jalisco. The avocados from Michoacán are mainly exported to the US and growers aim for a continuous supply. Jalisco focuses more on the Canadian market and also Japan and Europe. March and April are the months when fewer avocados are harvested. Volumes will increase again in May. This also ensures that prices in these two months are higher than in the rest of the year. In any case, because of the coronavirus, the demand has risen and prices are higher. Normally, prices rise by 30%, but this year they have increased by 40-45%.
Colombia: Avocado cultivation continues to expand in the country
The South American country has expanded its avocado production in recent years. Many hectares have been planted with new trees that should come into production in the coming years. The country is able to harvest avocados in 46 to 48 weeks of the year, with the off season taking place between March and July and the peak season between September and February. The peak is reached in a period when there is little competition from other countries. Europe is the main destination for Colombian avocados, but given the growing volumes, it is also important to look for other destinations.
United States: California almost had surpluses
California’s avocado production is strong this year. Growers have already harvested 21.2 tons, compared to 2.3 tons around the same period last year. This time we can speak of a normal avocado harvest. The avocado industry in the US has been holding its breath for the past two weeks, given the threat of an avocado surplus. The rainfall, which temporarily brought the harvest to a halt, and a decline in Mexico’s production over the holidays have prevented an excessive accumulation of stocks.
The demand has shifted to the retail. Not only has the coronavirus played a part in this, but also the large volumes and strong demand early this season. Almost imperceptibly, the avocado market in the United States has undergone a major shift. First, the volumes skyrocketed, but then the situation changed radically due to the closing of food service establishments and the hoarding in supermarkets. It remains to be seen what will happen in the coming weeks, but sales to the food service will be very meager. “I don’t know anyone in this business who isn’t concerned,” says someone from the California avocado industry. It is also unclear how prices will develop in the coming weeks. Prices skyrocketed when people started hoarding, but then plummeted again and now seem to be stabilizing somewhat.
China: Avocado market slowly picking up again; imports from Peru and Philippines
The avocado market in China is mainly focused on imports. Currently, there is a great supply from Peru, but imports have also started arriving from the Philippines for the first time. The avocado market has been very tough lately, as not many people are buying avocados at this time. A lot of them are normally used in restaurants and bars, but since they were closed, fewer avocados were purchased. As a result, sales were very slow, which makes things difficult for a product that doesn’t have a very long shelf life. Now that restaurants, bars and businesses are all open again in major cities, there is good hope that the demand for avocados will gradually increase again.
Australia and New Zealand: Campaign to promote local production
With the closure of the food service because of the coronavirus, 10 to 20% of avocado sales will no longer be made on the Australian market. In order to maintain the demand for avocados, promotions have been launched in Australia and New Zealand to encourage people to continue buying local products. Australia is almost about to shift from Shepard avocados (a Greenskin) to the more famous Hass. The Shepard season has been somewhat more limited than last year. For its part, an Australian company hopes to grow in the market with avocados sold under the Viavi brand, with the season running from March to April.
In 2018-2019, the avocado production had grown by 11%, to 85,546 tons. The value had decreased by 18%, to AUD 444 million (EUR 257.2 million). Exports increased spectacularly by 79% to 3,202 tons. In New Zealand, 31,424 tons of avocados were harvested in 3,795 hectares. 2.2 million trays were for the domestic market and another 2.9 million trays for export.
The demand on the European market is high, while volumes are lower than last year. The fact that the demand has increased has everything to do with the coronavirus crisis, because the fruit is a great source of vitamin C. Argentina and South Africa, the two countries responsible for most of the exports to the European market, have already started. The favorable prices in Europe and an early start of the season is an excellent opportunity for these countries. In addition to Californian and some Argentinian lemons (which have been on the market again since 2018), the US also expects Mexican ones. Some traders are wondering whether the demand will remain stable or we’ll soon be flooded with lemons. Looking to the future, China also seems to be developing into a major exporter of lemons.
Argentina: Despite lower production, lemon exports are growing
Argentina has started early this year. The season kicked off in March with the first exports to Russia, Ukraine and Canada. Exports to the US followed in April and to Europe in early May. Russia and Europe remain the most important sales markets, but with the reopening of the US market in 2018, a lot of effort has been put into expanding there. Exports to the US have been somewhat delayed due to the measures taken against the coronavirus by Argentina. The growers have had no reason to complain about the weather, which has resulted in a strong harvest. The production volume is a bit lower than last year; however, exports are forecast to reach about 300,000 tons. The total harvest in the 2019/2020 season is estimated to amount to 1.8 million tonnes, with most of that intended for the production of lemon juice concentrate and lemon oil.
South Africa: Faster pace of lemon exports together with early start of the season
The South African lemon industry is being very cautious with its export prospects. Large volumes are now on the way, but the large volumes from South Africa and Argentina may put pressure on the market. Exports are currently predicted to amount to 27.1 million boxes (15kg each), which is 5 million more boxes than last year. This increase is mainly a result of acreage expansion. Although the planting of new lemon trees has slowed down, more than 43% of all South African trees are four years old or younger.
The season started earlier this time. The volume of lemons exported is already greater than last year, with much of it going to the Middle East, which demands early lemons. After years of high demand from Russia, this year’s exports there have fallen. The economic developments in these oil producing countries are a cause for concern for some exporters, as they create uncertainty about the consumption patterns. South East Asia is currently a disappointment for some exporters, but it is hoped that normal consumption patterns will be restored soon. Exporters in South Africa are also keeping track on China’s growing lemon exports.
15 years ago, the average yield for South African lemon growers was 2,000 ZAR (100 Euro) per hectare. This increased to ZAR 17,000 (850 Euro), then dropped to ZAR 11,000 (550 Euro) and increased to 12,000 ZAR (600 Euro) last year.
Netherlands: Can the price stay up?
With the campaigns about to end in Spain and Italy, and with Turkey no longer allowed to export lemons at all, traders are getting ready for the lemons from the Southern Hemisphere. In early May, the first reefer ship with Argentinian lemons had arrived already in the port of Vlissingen, a stopover on the way to Saint Petersburg. While one trader has optimistic prospects for the coming season, the other is, in his own words, more realistic. The sustained high demand from the retail sector and, in the future, the reopening of the catering industry in the summer, with high prices paid for the fruit, contrasts with the fears of a lemon surplus from South Africa and Argentina. The prospect is that South Africa will export more volumes to Europe, and Argentina, with its new plantations, will do that too, so prices may come under pressure.
Germany: High demand leads to early end of the Spanish season
Around Easter, the demand for lemons in Germany was – like other years – very high. However, an additional increase was observed this year. “This has to do with the high vitamin C content of lemons, given that it arguably helps strengthen the immune system. Due to the coronavirus, there is extra demand for such products, including lemons,” said a trader.
The higher demand is having an impact on the sales situation. “Although there is a shortage of lemons, the storage and packaging capacity hasn’t been large enough for a while. The urgent need for large volumes led to a rapidly declining stock of Spanish lemons.” This applies to both conventional and organic lemons of the Verna variety, which are mainly imported from the Spanish growing areas of Murcia and Malaga. For that reason, people are also counting on an early end of the Spanish season.
After Spain, Argentina normally follows, although the situation there is currently difficult to estimate. “We import the Eureka variety from Argentina. It is said that large volumes are available, but we’ll only know this once the product is in containers, on its way to us,” they say.
Switzerland: Record high organic lemon sales
Organic lemon sales in the Swiss retail market reached a new high in March. On average, 161 tons of organic lemons were sold per week, a whopping 47% more than in February and 53% more than in March 2019. The market share of organic lemons, on the other hand, remained virtually the same at 42%, reports the agricultural association BLW.
France: Switch to the Southern Hemisphere
Lemons are currently selling well in France. Especially because of the positive health benefits that are linked to the fruit. The Spanish season is almost over. Due to the excessive rainfall in Spain during the spring, there were some quality problems, but these were resolved later in the season. South Africa and Argentina are now entering the market.
Spain: Earlier end for Verna lemons this season
The craze of previous weeks, with insanely high demand and prices for lemons, is now over. The coronavirus continues to have a strong impact on the demand, although it remains difficult to sell class 2 fruit and large formats. Spain has now completely switched from the Primafiori to the Verna, with yields expected to be 30-40% lower than last year, so the season will end earlier. There are many large sizes, since there are fewer fruits per tree. Although prices have fallen in recent weeks, they remain favorable for the growers (0.72 to 0.85 € / kg). High prices in Europe have encouraged Argentinians and South Africans to export lemons to the European market earlier. The first lemons from Argentina arrived in early May, and now a large number of reefer containers loaded with lemons are on their way by sea.
Italy: More demand, fewer lemons
In Sicily, the lemon production is currently at its lowest level in 15 years. “Throughout 2020, the sales price has remained high, with an average of € 0.75 / kg,” says a Sicilian grower. “Our lemons are shipped to Northern Italy, France, Austria, Germany and the Netherlands. The problems with Mal Secco (Phoma tracheiphila) persist.”
There has been a decline in the supply of Syracuse lemons due to the unfavorable weather conditions of the previous season, but the demand for these lemons is growing, partly due to a reduction of imports from Spain. Prices at origin have therefore increased from 0.75 to 0.95 € / kg. Many entrepreneurs in the Syracuse area are investing in lemon cultivation by expanding the acreage. These new areas will only come into production in 3-4 years. Primofiore lemons will continue to be harvested in Calabria for two weeks. The season in Calabria has been extended by 30 days due to rainfall last week. The 2019/2020 campaign was good for the lemons due to increased market demand. The sales prices amount to around 1.20 / 1.30 € / kg but they are expected to increase by 20 cents in a week if the supply continues to fall.
Turkey: Lemon exports will stop until August
Due to the measures introduced to stop the spread of the coronavirus, the country’s lemon exports have stopped until August 2020. However, news has reached us that as of Thursday, the lemon exports up to 10,000 tons have been approved. Expect more official news on this subject to follow next week.
China: Export of lemons from China on the rise
In China, lemon exports have increased significantly in recent times. Due to the coronavirus, consumers are trying to purchase more products with vitamin C in them. As a result, the demand for lemons has increased and the price of Chinese lemons has risen over the past few weeks. Chinese lemons are mainly grown in Chongqing and Sichuan.
United States: Strong demand from the retail
Lemons on the US market currently come from two regions. On the one hand, there are lemons from California, where the second district is currently in production. California is able to produce lemons year-round. On the other, there is Mexican fruit, with large volumes of it expected in 3 to 4 weeks. The Mexicans remain on the market for 9 months. Argentina, and to a limited extent Uruguay and Chile, also export lemons to the US market.
The food service normally absorbs steady volumes of the product from traders, but due to its closure, many lemons are now kept in storage. The demand from the retail has increased sharply; however, as soon as large volumes of Mexican lemons enter the market, the prospect is the supply will increase and prices will fall.
Australia: Expansion for the domestic market
Lemons are grown year-round in Australia. The acreage devoted to citrus in the country is growing, but most lemon trees are still in the growth phase. Last season, 48,232 tons of lemons and limes were grown. 79% of that corresponded to lemons and only 7% of the total was intended for the fresh market. Last season, 4,000 tons were still imported, but with the expansion of the acreage, mainly in Queensland, the country hopes to keep reducing that volume. The industry still sees plenty of growth opportunities in the domestic market and is trying to capitalize on that with promotions and campaigns.
A growing number of countries in Africa are looking to cannabis as the ticket out of poverty, and foreign investment for this sector has flooded in. Activists who pushed for legal commercial cultivation now face the challenge of crafting a cannabis economy that empowers small farmers and rural communities, rather than replicating the elitist forms of past agro-export industries.
Voices in the global industry are increasingly anticipating a cannabis boom on the continent. There are now seven legal producers in Africa. South Africa, one of the continent’s economic giants, decriminalized personal cultivation through a ruling of its high court in 2018, and that same year began issuing licenses for commercial cultivation of medical marijuana.
South Africa’s small, landlocked neighbor, the mountain kingdom of Lesotho, issued the continent’s first commercial cultivation licenses in 2017, and is now producing for the international medical market. Significant investment has come from major Canadian licensed producers, day-lighting the kingdom’s traditional illicit cannabis sector.
Also in December, Zambia’s cabinet took the decision to legalize cultivation and export of cannabis for the medical market. The move came as the country was being stricken by a severe drought — a grim harbinger of aridification linked to global climate change in the greater southern African region. This could make Zambia an unwilling test case on the claims of cannabis drought-resistance.
These five countries have recently been joined by two more: Malawi in southern Africa and Ghana, the first entry in the West Africa region.
MALAWI: TRANSITIONING FROM TOBACCO
Malawi’s parliament passed a bill on Feb. 26, 2020, legalizing cultivation and processing of cannabis for either medical marijuana or industrial hemp — although strictures were not removed on general use. “We are very happy that finally we’re taking the right steps to move the country’s economy forwards,” Chauncy Jere of the Malawi Hemp Association told Reuters.
“There’s no denying that cannabis would be a lucrative industry and its demand is huge,” said Jere, who is also a director of Ikaros Africa, a company now conducting industrial hemp trials on lands in the Great Rift Valley of Central Malawi. The company’s website says it will soon be marketing “sustainably sourced full-spectrum, organically-grown CBD hemp oil and extracts.” It boasts ambitions to “promote one of the three big C’s of this agriculturally dependent country: Chamba (hemp), Chombe (tea) and Chambo (tilapia fish).”
But it is actually tobacco that has been Malawi’s chief foreign exchange crop since independence from Great Britain in 1964. Tobacco now accounts for 60% of the country’s GDP. An aim of the cannabis cultivation bill is to wean the country off of the tobacco economy. Malawi is under pressure from anti-smoking campaigns around the world. Last November, the US Homeland Security Department suspended imports of all tobacco products from Malawi for alleged forced labor practices, including child labor.
And there are growing concerns about tobacco’s ecological impacts within Malawi. Tobacco is a major contributor to Malawi’s serious deforestation problem. Not only is land cleared for plantations — a potential problem with any crop — but forests are plundered for fuel to cure the leaf as well. The tobacco industry is therefore in a nexus with illegal logging. Local villagers have resorted to such creative solutions as beekeeping to keep tree-fellers out of their woodlands. This not only produces honey as a sustainable economic alternative, but the bees deter the loggers.
CANNABIS TOURISM
The agro-forestry website Devdiscourse notes that some are also banking on a cannabis tourism draw in Malawi — despite the continued prohibition of “recreational” use. The country is already one of the continent’s biggest (illicit) producers of marijuana, including rare THCV-rich varietals with intriguing medical potential. Malawi Gold, an ancient and unadulterated “sativa” strain, rivals South Africa’s Durban Poison as a kind of Holy Grail for cannabis aficionados around the world. Central Malawi’s Nkhotakota district (which also boasts a large wildlife reserve of the same name) is already a known destination for canna-tourists on the Africa trail.
As tobacco declines, the push to transition from a monolithic cash-crop is becoming urgent. In 2019, the World Bank reported that Malawi “remains one of the poorest countries in the world despite making significant economic and structural reforms to sustain economic growth.” The country’s poverty rate was higher than 50% in 2016. Malawi also suffered terrible damage in Cyclone Idai, which devastated much of the region, including parts of neighboring Mozambique, in March 2019.
The cultivation bill was actually introduced by Agricultural Minister Kondwani Nankhumwa, who boasted to the local Nyasa Times upon the final vote, “We believe cannabis can be an effective substitute for tobacco in the long term.”
A commentary in the Nyasa Times took a more cynical view, noting President Peter Mutharika’s recent controversial efforts to prolong his term in office through methods all too common among Africa’s rulers. After five years in office, Mutharika was elected to a second term last May in polls the opposition rejected as tainted. Despite waves of street protests, he has since resisted calls for new elections. The editorial portrayed a kind of pot populism appealing to the nation’s struggling small farmers.
The current global health emergency is providing a new lease for incumbents and strongmen worldwide, and Africa is no exception. As the Nyasa Times concluded: “[A] combination of COVID-19 and cannabis sales might turn out to be what keeps Mutharika in his office for the foreseeable future.”
GHANA: HEMP ON THE VOLTA
Ghana’s parliament on March 20, 2020, passed the Narcotics Control Commission Bill, allowing use and production of cannabis for industrial and medicinal purposes — but, again, not general adult use. The Hemp Association of Ghana, which had lobbied hard for the bill, is now brokering export deals for local farmers. Portugal is named as an initial destination for fiber hemp exports. The group is anticipating profits of $2.8 million per harvest on 100 acres of hemp plantations.
Hemp Association president Nana Kwaku Agyemang brought farmers from the agricultural Volta region to capital Accra to testify for the bill. He was quick to disassociate his efforts from the stigma of drug use, telling the Africa Feeds news service: “We seem to get lost in this issue of getting high… [W]e are not promoting smoking, we are promoting the industry, we are promoting cleaning up the environment, we are promoting creating a new revenue stream for government … [W]e are … promoting medicines that are far better than opioids, medicines that cannot kill you because no one has died from taking cannabis.”
Ghana’s new law adopts the 0.3% THC standard used in the United States and other countries — plants exceeding the 0.3% THC threshold remain forbidden. It also gives oversight of the hemp industry to the government body traditionally concerned with enforcement, the Narcotics Control Board, while upgrading it to a Commission.
Ghana is a relatively stable country in a volatile region. It has thus far been spared the political violence and social breakdown now shaking its northern neighbor Burkina Faso. (The two countries share the Volta River). Ghana also has a fairly diversified economy, exporting oil and gold as well as cocoa beans.
But because cocoa can only be grown in the country’s forest zones, this industry is also taking an ecological toll. Forest loss to make way for cocoa plantations is now ironically threatening the industry itself, as soil fertility declines and water sources are degraded. Cocoa is also an “understory crop,” which grows best under the shade in the forest zones. A new and more adaptable crop such as hemp could afford the opportunity for these zones to recover, thereby giving Ghana a new lease on ecological balance and social stability.
SOUTH AFRICA EMBRACES HEMP & MEDICAL CANNABIS
It is a hopeful sign for the continent’s incipient cannabis industry that the president of South Africa recently embraced the cannabis economy in his State of the Nation speech this year.
President Cyril Ramaphosa said in the February 13 address: “This year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate policy on the use of cannabis products for medicinal purposes, to build this industry in line with global trends.”
This was welcomed by South Africa’s agricultural association, Agri SA, albeit with a statement that included this note of caution: “The government must consider the entire value chain when designing policy for the commercial farming of both cannabis and hemp, especially since the focus is on small-scale farmers. These farmers might not necessarily have access to all the inputs necessary to ensure a successful crop, including but not limited to fertilizers and water.”
“Furthermore,” Agri SA added, “it is vital that investment in any projects need to include an outcome of job creation, given the country’s untenable unemployment rate. It is unclear what the job creation potential is in terms of primary agriculture for the commercial farming of cannabis and hemp.”
Agri SA also warned of another trend seen throughout Africa and the developing world — the displacement of traditional food staples by new cash crops: “It would also be imperative that the commercial farming of hemp and cannabis cannot interfere with food security. It is a risk that small-scale farmers may prefer to farm with cannabis or hemp because of the potential cash incentive, which could negatively impact the farming of commodities needed for food security. This is a potential unintended consequence that would need careful management.”
ACTIVIST PRESSURE
South Africa’s belated embrace of hemp and medical marijuana represents a major policy change for a country that was one of the first on Earth to prohibit cannabis. Passage of the 1922 Customs & Excise Duty Act classified cannabis with “habit forming drugs,” barring cultivation and criminalizing possession — 15 years before the United States effectively outlawed “marihuana.”
It was, as usual, grassroots activist pressure that cracked the edifice of prohibition. Among the key figures who have been instrumental in advancing cannabis reform in South Africa are the now-infamous “Dagga Couple,” Julian Stobbs and Myrtle Clarke — husband and wife TV producers in Johannesburg. Their arrest following an overzealous police raid on their home in 2010 provoked them into activism. They were menaced at gunpoint as their house was ransacked — only to be charged with mere cannabis possession.
Rather than pleading guilty, they fought the charge in the courts, arguing that cannabis consumption is protected under privacy provisions of South Africa’s constitution. A campaign was launched in their support. And while their case was pending, a second legal challenge was mounted by Gareth Prince, a law student and observant Rastafarian, who had been denied a license to practice by the South African Law Society upon graduation on the basis of prior cannabis convictions.
Prince sued the Law Society on religious freedom and personal liberties grounds, and in September 2018 he won a favorable ruling from South Africa’s Constitutional Court. Consequently, cannabis cultivation for personal use was decriminalized throughout the country.
Also in 2018, the South Africa Health Products Regulatory Authority (SAHPRA) issued the first licenses for commercial cultivation of medical marijuana. And in May 2019, SAHPRArescheduled CBD, opening the way for the sale of CBD extract and derivatives.
As for the Dagga Couple, their case is still on appeal, but victory looks certain if the Constitutional Court ruling is taken to be retroactive. Meanwhile, the publicity wave they unleashed has crested into a nationwide pro-cannabis cultural shift. Their nonprofit, Fields of Green for All, is calling for broader legalization, including commercial cultivation for the “recreational” or “adult-use” market.
South Africa’s struggling farmers have launched an initiative to demand legal cultivation of dagga (as cannabis is locally known) beginning in KwaZulu province, a traditional agricultural heartland that borders Lesotho on the east. And in eSwatini (formerly Swaziland), also a small landlocked kingdom bordering South Africa, lawmakers are likewise studying an initiative to legalize cannabis cultivation.
PEASANTS OF PONDOLAND ‘BETRAYED’
But assuring that the cannabis economy will benefit the small farmers now pushing for it will be the next challenge even if their efforts to legalize free cultivation are successful.
This reality was vividly illustrated in a series run last October in South Africa’s GroudUp magazine on the paradoxical situation faced by traditional farmers in Pondoland, a remote and rugged cannabis-growing region in the Eastern Cape province. They have faced the same hardships that cannabis-growing peasants have faced in Colombia and Mexico, including the spraying of their lands with glyphosate by South Africa Police Service helicopters in the 1990s.
But now, having to compete with legal product grown by capitalist enterprises for the medical market, traditional cannabis farmers have taken a hard economic hit. In addition to being in remote areas with poor transportation and infrastructure, these growers face institutional barriers to entering the legal market. The price of license application with SAHPRA is prohibitive for these poor farmers. And in a real Catch-22, anyone with a past conviction for illicit cultivation is barred by SAHPRA’s regs from entering the licit sector.
Beecee Nombanga, a community leader in the Pondoland village of Manhlaneni, told GroundUp: “Our people feel betrayed, because all of the licenses are being issued to companies from elsewhere, while we who have been growing this plant here for generations, who have the skills, who have the knowledge, who have the land, are still being criminalized.”
As countries continue to implement “risk-adjusted” responses to COVID-19, global leaders and analysts alike continue to assess the evolving implications of the pandemic on global markets.
What makes COVID-19 unique is that it is a health shock that has fundamentally affected both the supply and demand side of the global economy. In the food industry, government policy responses have mainly hinged on three major interventions since the pandemic started. These include (1) an initial intent to implement protectionist trade policies in major agricultural producing countries, followed by a pullback of direct trade restrictions (2) supply-side support for the agricultural industries in the form of historic budgetary support for small and large companies, and (3) demand-side support through a boost in household incomes through wage support.
First, in the early days of the pandemic, countries such as Russia, Kazakhstan, Cambodia and Vietnam, amongst others, introduced export quotas and bans on rice and wheat. This was an attempt to ensure stable domestic staple food supplies amid uncertainty about how long the pandemic will last. But these policies were soon abandoned after a month, as aforementioned countries signalled a return to the open market trading terms within the next two months. One of the reasons that contributed to this change included the exemption of agriculture and food supply chains from COVID-19 restrictions that had affected other sectors of the economy. The International Grains Council has lifted its 2020/21 global grains harvest by 2% year-on-year to 2.2 billion tonnes. This is a welcome development for grain-importing countries who feared the risk of food insecurity when the protectionist policies were announced. This includes South Africa and the African continent at large, which relies on rice and wheat imports from the global market.
Second, as initial worries about production abated, it became clear that the biggest challenge was not a lack of food in the market, but logistical disruptions. However, the closure of meat processing plants in the US, Ireland, Canada and Brazil, amongst others due the outbreaks of the virus in production facilities is now bringing renewed fears that the longer the pandemic continues, the more likely those parts of the food system will cease to function. The risks of meat shortages in the global market, as well as the negative ripple effects in other parts of the food system linked to the meat sector, imply that the food system remains extremely vulnerable. The emerging concerns of potential meat shortages – and potential shortages in other parts of the food system – are putting intense pressure on political leaders to respond more aggressively, as seen in the US, where President Trump ordered meat plants to re-open to avert an inevitable spin-off crisis.
This specific aggressive intervention is just part of a much broader set of unprecedented policy responses from global leaders, which have been underpinned by large fiscal spending eclipsing those of the 2008 financial crises and the Great Depression. Richer countries have implemented financial relief programmes to support small and large businesses, including farmers, to cope with the deep negative impacts of the pandemic. In South Africa, the Department of Agriculture, Land Reform and Rural Development ring-fenced R1.2 billion for financially distressed small-scale farmers. This prioritises the poultry, livestock and vegetable sectors, amongst other agricultural commodities which will be selected on a case-by-case basis. The farmers within the Proactive Land Acquisition Strategy programme are also included in this package.
Third, governments tried to preserve incomes and livelihoods, and in turn supported the demand side for the food sector. Rapid increases in already high levels of unemployment in most parts of the world translates to a weak demand for food, particularly high-value products in the near-to-medium term. Income protection and support in countries such as the UK and the US is expected to mitigate the weakening demand, and somewhat keep demand at levels that ensure that the economy can bounce back quickly once the economies are fully opened up post-COVID-19. Meanwhile, in the emerging markets, South Africa has been amongst countries that provided support through an increase in social grants and food vouchers and aid. While these are short term assistance, they help improve household demand for food products somewhat. These measures are short term and are being implemented with the expectation that the pandemic will keep the economy closed for three months.
But if the global economy does not bounce back sooner, under the pressure of a new wave of infection which leads to a much slower opening of the economy, then household income and purchasing patterns might be altered over the short to medium term. In this case, the implications for the agricultural and food sector could be dire. We suspect that the demand for higher-value products will inevitably decline somewhat post-COVID-19, but the longevity of this decline could lead to a shift in the supply chains. Depending on the extent and time of the impact over time, the shift could be permanent, due to irreparable damage to the supply chains – if critical businesses shut down permanently.
This is crucial for countries like South Africa whose agricultural sector is export-orientated, with roughly 49% of the produce in value terms exported. South Africa’s high-value export products are mainly fruit, wine and beef. These are mainly destined for the EU and Asia market which accounted for nearly US$10 billion in 2019.
In a nutshell, the resilience of global agriculture will continue to be tested as the pandemic impacts both the supply side and demand side of the global economy. There is no telling how long the global food system – as currently configured – will continue to sustain the pressure from COVID-19. What is becoming increasingly clear is that, the longer the pandemic continues to impact on the supply and demand sides of the global food system, the more likely we are going to see structural shifts that will fundamentally reconfigure it as it adapts to the changing effects of the pandemic.
What is particularly worrying is the lack of support measures for businesses and households in developing countries. In resource-poor nations – especially those in the African continent, who are already under the weight of worsening debt levels – governments do not have the wherewithal to support private businesses and farming communities to the same degree as the United States, the United Kingdom, China, and others. This means that the developing world is a part of the global food system and economy that remains extremely vulnerable to the pandemic. There have been relatively lower numbers of COVID-19 cases in sub-Saharan Africa so far, perhaps due to a lack of testing capacity. But if what is happening in the global north is a harbinger of what is to occur in sub-Saharan Africa over the next couple months, then the largely informal food systems in the continent will likely come under extreme pressure, a scenario which will evoke a food insecurity catastrophe.
