South Africa: Concerns Over Steep Input Cost Increases in the South African Agricultural Sector

Worldwide agricultural inputs prices have risen steeply the past year. South Africa is at the start of the 2021/22 summer production season and farmers are confronting these increased inputs prices that will squeeze profit margins. On average, fertilizer prices more than doubled the past year in South Africa, while agrochemicals prices increased by more than 50 percent. Diesel prices have increased by 40 percent year-on-year. However, the South African agricultural sector has increased its resiliency to rising input costs over time by improving efficiencies. Efficiency has increased across the sector due to, amongst others, the utilization of economies-of-scale, upgraded on-farm machinery, the use of new production technologies, such as Genetically Engineered seed, precision farming, and reduced or no-tillage land preparations.