Agricultural Sector Continues To Perform Poorly … but the livestock sector recorded a positive growth

By:Justicia Shipena
Despite all industry subsectors’ outputs increasing in 2022, the agricultural sector continues to perform poorly, according to Simonis Storm’s Agricultural monthly report for March.
The agriculture industry saw an overall growth of 2.6% in 2022, with animal farming increasing by 1.2% y/y, fisheries increasing by 2.3%, and crop farming increasing by 4.3%.
“The problem however is that Namibia’s biggest unemployment issue is the youth and based on certain surveys, the youth are not keen on living in rural areas and focusing their efforts on agricultural activities,” said the report.
The agricultural sector is an essential part of any economy, but it is particularly important in Namibia since it has one of the largest potentials for using the large pool of unskilled labour as well as reducing socioeconomic indicators like unemployment and poverty.
According to Simonis Storm, the World Bank estimates that Namibia’s urban population would increase from 28% in 1990 to 53% in 2020.
This suggests that the pool of potential employees for agricultural enterprises, which are often located in rural areas, is smaller.
“This could always be a risk to future production,” the report stated.
Local farmers will need to increase investments in technology to address a labour shortage if Namibia continues to see a rural-urban shift and if young people continue to favour white collar jobs, according to Simonis Storm.
The research firm said some of the farmers it spoke to were eager to completely withdraw from the market since they lacked the purchasing power necessary to control the harvest’s price.
“In recent years, we have seen an increase in apps, websites and physical informal stalls being created to sell directly to the market and avoid wholesalers. While there is no evidence of farm closures, this remains a risk to long-term food production in the country,” said the report.
The value of agricultural output increased from N$9.71 billion to N$11.37 billion, a stunning 17% gain in real terms, reaching its highest level since 2015.
With livestock farming being largely unchanged since 2015, the increase in output has primarily been caused by better productivity in the fishery and crop farming sub-sectors.
“This also indicates that the livestock sector was most likely the worst affected by the drought Namibia experienced during 2014 to 2017,” Simonis Storm explained.
Additionally, Namibia’s agriculture industry received around 8% of all net investments in 2022.
However, since 2020, net investment has been increasing as farmers restocked following the drought and a few crop farming initiatives in Namibia’s south and north.
In this light, the research agency had forecast that the agricultural sector will weigh on economic growth in 2023.
According to the report, activity in March 2023 for livestock marketing and exports increased by 38% year-on-year for cattle, sheep and goats.
In February, marketing activity grew by 19% year-on-year and on a monthly basis, livestock marketing increased by 75%.
“The largest driver was sheep marketing, which increased by 53% year-on-year, followed by cattle marketing with a 16% increase y/y, but was weighed down by goat marketing which decreased by 13% y/y.”
The first quarter of 2023 showed higher growth than the first quarter of 2022, despite a 57% loss in goat production and a 7% decline in cow production quarter over quarter.
“Total livestock marketing recorded a significant improvement of 15% quarter on quarter, which is only due to the growth in sheep marketing increasing by 60% quarter on quarter.”
According to research, from October 2022, there has also been an increase in the slaughter of livestock.
The first quarter of 2023 saw an increase in animal slaughter of 9%, with sheep slaughter increasing by 44%, while cattle, goats, and pigs all experienced declines of 33%, 68%, and 7%, respectively.
Additionally, the number of sheep exported rose by 68% quarter over quarter, from 70,710 heads in the fourth quarter of 2022 to 118,853 heads in the first quarter of 2023.
Simonis Storm reported that in the first quarter of 2023, the total amount of animals slaughtered increased by 11% quarter over quarter.
“Where cattle (↓ 16% q/q) and goats (↓ 56% q/q) remained on a downward trend. The growth in sheep and cattle is due to farmers urgently attempting to sell off livestock in preparation for the predicted upcoming drought,” Simonis Storm said.
The main meat-processing and meat-marketing organisation in Namibia, the Meat Corporation of Namibia (Meatco), recently announced that it is currently running at full capacity, with bookings for slaughter in April and May 2023 already full and those in June and July 2023 beginning to fill.
According to the analysts, the majority of animals slaughtered in March 2023 were sheep (21,080 heads), representing a 51% month-over-month rise, and cattle (9,594 heads).
Simonis Storm said prices for live animals at auctions, with the exception of bacon, are on the decline.
According to the report, the continued load shedding in South Africa is to blame for the drop in demand because farmers, shops, and families must pay more for storage.
“The prices for weaners decreased by 35% in the last 12 months and was priced at N$25.81/kg in March 2023.”
Similar declines occurred in tollies cattle, goat lamb, sheep lamb, and dorper lamb over the past 12 months.
Simonis Storm concluded that local pork prices continued to rise in March 2023 by 48.9% year over year due to persistent shortages of pigs as a result of the foot and mouth disease outbreak in South Africa.