Agoa extension fails to calm farm trade worries

South African farmers are being told to brace for continued volatility in global trade, a reality that persists despite the recent two-year extension of the African Growth and Opportunity Act (Agoa). The extension, announced by President Donald Trump, grants favorable market access to African goods but falls short of the longer-term stability the sector sought. Loffie Brandt, sector executive for agriculture at Absa AgriBusiness, argued that producers must prepare to operate within an environment defined by unpredictability rather than steady growth.

Brandt made these remarks on Thursday during Nampo Cape, an event held in Bredasdorp, Western Cape. The gathering is recognized as the largest open-air agriculture sector meeting in the southern hemisphere. He noted that while the Agoa extension is a positive development, it does not eliminate the broader risks facing the industry. Farmers need to accept that the operating environment has fundamentally shifted toward uncertainty, regardless of specific trade agreements.

Shifting from Policy to Resilience

Brandt emphasized that different industries face varying levels of exposure to mixed markets. Some sectors can easily access alternative trading partners, while others remain heavily dependent on specific regions. The key takeaway, he said, is that the environment in which South African agriculture operates has become uncertain. This shift requires a change in strategy for many producers who previously relied on stable, long-term trade frameworks.

Rather than fixating on single announcements regarding tariffs or trade deals, Brandt advised farmers to be more intentional about shielding their products from trade fragmentation. The rapid fluctuation of tariffs, where rates spike and then drop, creates a confusing backdrop for planning. He urged the sector to find ways to manage this instability rather than reacting to each new political headline. The goal is to limit exposure to instability, which may involve changing target markets or adjusting the timing of product shipments.

This approach stands in contrast to the temptation of pivoting away from the US market entirely due to temporary political decisions. Brandt cautioned against such a drastic move unless it is unavoidable for specific farmers. Instead, the focus should be on what tools are available to limit exposure to broader instability. This might mean diversifying markets or altering logistics, but it does not necessarily mean abandoning the US market altogether. The strategy is about managing risk, not just reacting to policy changes.

It is interesting to consider how this advice mirrors the broader trend in global supply chains, where companies are increasingly moving away from just-in-time models toward just-in-case strategies. By prioritizing flexibility over efficiency, businesses aim to survive shocks rather than merely optimize for calm periods. This shift suggests that resilience is becoming a core competitive advantage, not just a risk mitigation tool. For South African farmers, this means building buffers into their operations to handle the next unexpected tariff change.

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The Erosion of Trade Preferences

James Booth, head of revenue at Verto, offered a more pessimistic view on the long-term viability of relying on unilateral trade preferences. He stated that the era of depending on such agreements is effectively ending. While the Agoa extension provides relief for the 500,000 South African jobs linked to the agreement, Booth warned that the short window is a signal, not a solution. He described the current period as a “bridge year,” urging businesses to diversify or face significant exposure.

Booth noted that the 30% “America First” tariffs already in place have neutralized many of the duty-free benefits Agoa once provided. This means that even with the extension, the financial advantages for exporters are diminished. The abbreviated nature of the renewal perpetuates uncertainty, making it difficult for companies to plan long-term investments. Businesses now face a situation where the rules can change rapidly, requiring constant adaptation.

Market Data and Economic Reality

Wandile Sihlobo, an agricultural economist at the Agricultural Business Chamber of SA (AgBiz), provided context on the economic stakes involved. He acknowledged that the renewal of Agoa benefits farmers, but he also highlighted that broader political challenges between Pretoria and Washington remain. The US remains an important market for South Africa, accounting for approximately 4% of the country’s total agricultural exports. These exports were valued at $13.7bn in 2024.

The data shows a complex picture of recent trade flows. Exports were strong in the first two quarters of 2025. Some exporters took advantage of a 90-day pause on higher tariffs to ship more volume than usual. In the second quarter of 2025, South Africa’s agricultural exports to the US increased by 26%, reaching $161m. This spike indicates that producers were quick to capitalize on temporary windows of opportunity.

However, the trend reversed in the third quarter of 2025. Exports to the US decreased by 11% compared to the same period a year before. The value dropped to $144m. This decline highlights the volatility that experts like Brandt and Booth are warning about. The sharp drop following a period of high activity demonstrates how sensitive the trade relationship is to policy shifts and tariff changes. Farmers are left to manage these swings with limited control over the political forces driving them.