Mixed fortunes for agriculture sector
.... rainfall gains gobbled up by devastating locust invasion
The good rains received across the country during the recent rainy season could have a doubling effect of rain-fed crop production, the latest market watch report by the Agricultural Bank of Namibia (AgriBank) indicated.
Improved rainfall has brought hope to the economy that is battling with Covid-19, high food insecurity, and existing structural challenges.
Regionally, the season is amidst a well-established La Niña event, bringing about wetter conditions in southern Africa. In Namibia, timely and above average rains benefited the northeast (Kavango West and Kavango East, Zambezi) as well as southern regions.
According to the Agribank Market Watch report, the northwest of Namibia (Kunene and Omusati regions) continued to record a rainfall deficiency, which could lead to drought in those regions as grazing starts to become less and less. The bank, however, hopes that the average improved rainfall recorded in the last two consecutive seasons will improve rangeland conditions and livestock production over the remaining period of 2021.
The report notes that despite these relative good gains, the effect of the locust outbreak in the country could have devastating results for the crop production sector.
Namibia is struggling to contain a third wave of an African migratory
red locust outbreak, which has now destroyed 719 000 hectares of grazing land and 1 207 hectares of crop fields in 10 of the country’s 14 regions, the agriculture ministry said on Tuesday.
The latest outbreak of the large, red-winged grasshopper species, which is common to sub-Saharan Africa and breeds prolifically in conditions of drought followed by rain and rapid vegetation growth, began in December 2020.
The //Kharas region along the South African border, which is famed for diamond mining as well as small stock farming, is the hardest hit, with 775 000 hectares of grazing partly affected.
Grazing land in the fertile Zambezi region, which borders Zambia, Zimbabwe, Angola and Botswana, has also been extensively damaged.
Livestock marketing
Agribank reports that the cattle market continues to dwindle, slowing by 40% to 41 842 in the first quarter of 2021, compared to 69 550 during the same quarter of 2020. The number of cattle slaughtered declined by 22% year-on-year to 16 192, while live exports declined by 48% year-on-year to 25 650 during the same period.
Contrary to an annual decline, the number of cattle marketed improved by 40% month-on-month to 18 020 in March 2021, mainly attributable to live exports. An increased number of participants at auctions and relaxed Covid-19 regulations have helped to keep the live exports’ market and livestock auctions active.
Total sheep marketed and live exports recorded a growth of 31% year-on-year and 8% year-on-year, respectively, in March 2021. A good rainy season, coupled with improvements in the restocking rate relative to large stock, has contributed to high volumes.
Furthermore, the goats’ market also surged by 33% year-on-year to 8 780 in March 2021, in line with exceptionally high rains received in the southern regions.
The prices for weaners averaged N$41.66/kg, ending March 2021 higher, compared to N$35.02/ kg in the prior year. Although the average in 2021 is still high, a downward trajectory in the prices – by 11% from N$44.49/kg in January 2021 to N$39.51/kg in March 2021 - was observed.
Beef producer prices remain elevated, amidst side-constraints, the report notes.
Inflation
Overall inflation stood at 3.1% in March 2021, compared to 2.4% recorded in the prior year. The upsurge in inflation can be ascribed to an increase in housing and utility categories, coupled with a rise in the cost of food and non-alcoholic beverages. Inflation for food items increased by 7.1% in March 2021, with meat prices skyrocketing.
The rise in meat prices is complementary to the depressed livestock slaughter volumes. Meat prices are accelerating faster in Zone 1 and Zone 2, recording a 15% and 13.4% inflation rate, respectively. Rising food prices are not just a Namibian problem as global markets are also experiencing an upsurge in food costs, stated the report.
Despite low interest rates, inflation tends to erode consumers’ purchasing power and put an additional strain on household income.