One of South Africa’s biggest employers under siege

Despite the crucial role it plays in South Africa’s trade and economy, the country’s agricultural sector is faced with significant challenges.

These challenges range from homegrown problems and from forces outside the country’s control, with one of the biggest threats being the high tariffs imposed on South African agri-products exported to the United States.

To ensure the sector’s continued viability, South Africa needs coordinated policy, infrastructure investment, and trade diplomacy that keeps pace with a rapidly changing global economy.

Anchor Capital economist Casey Sprake recently outlined the crucial role South Africa’s agricultural sector plays in the economy.

It is not only one of South Africa’s largest employers, supporting over 900,000 jobs, but also a vital contributor to the country’s exports, reaching a record R235 billion in 2024.

“As one of South Africa’s largest employers and a key driver of rural development, the sector’s performance has direct implications for livelihoods, fiscal health, and social stability,” Sprake said.

“When agricultural exports thrive, the benefits ripple widely – supporting employment, attracting investment, and reinforcing confidence in South Africa’s broader economic story.”

Despite the sector’s importance to the local economy, it is under severe pressure from both local and global challenges.

Some of these challenges include policy uncertainty, logistics bottlenecks, widespread disease breakouts and rising trade barriers. 

One of the hardest blows to the sector came in early 2025, when United States President Donald Trump announced wide-reaching tariffs on imports from several countries, including South Africa.

South Africa is among the countries subject to the highest US tariffs. While some exports, like platinum group metals, are exempt, others are subject to tariffs as high as 30%.

Local agricultural products are among the unlucky few subject to 30% tariffs, threatening to make the country’s agri-exports significantly less competitive.

In the Reserve Bank’s latest Monetary Policy Review, the central bank explained that the local agricultural sector is highly export-dependent.

In addition, the bank pointed out that the United States is a significant trading partner to South Africa, accounting for 7.7% of the country’s exports in 2024.

These exports to the United States are dominated by mining (about 60%), manufacturing (30%) and agriculture (5%).

Although agricultural exports only constitute a small share of the total, they are fully exposed to the new tariffs, with citrus, sugar, and wine among the most affected.

This is because they not only face a 30% tariff but also because competing products from other regions face lower tariffs, making South African products significantly less attractive.

The Reserve Bank warned that the loss of jobs and incomes resulting from this could “decimate” some rural communities.

The table below shows all of South Africa’s export products that are subject to the tariffs imposed by the United States.

Protecting agriculture

Sprake said the crucial role agriculture plays in the local economy and the many challenges it now faces require more urgent action.

This is especially true as agriculture continues to harvest gains, proving itself as one of the few sectors capable of lifting South Africa’s trade performance. 

“However, turning this momentum into sustainable, broad-based growth will require more than strong harvests – it will demand coordinated policy, infrastructure investment, and trade diplomacy that keeps pace with a rapidly changing global economy,” Sprake said.

The Reserve Bank echoed this sentiment, saying that accelerating structural reforms could boost productivity and mitigate the loss of export competitiveness. 

The central bank said efforts should also focus on diversifying export markets and strengthening existing trade partnerships, including fully implementing the African Continental Free Trade Area agreement.

Stellenbosch professor Johan Fourie recently pointed out that South Africa is missing out on billions of rands by not fully using its existing free trade agreements with major economies like the European Union.

Relying more on these agreements could mitigate the impact of the tariffs imposed on South African exports to the United States.

“We are losing billions of rands because we don’t know the rules. For example, our free trade agreement with Europe is underused, leaving exporters to pay tariffs that could be avoided,” Fourie said.