The impact of AGOA extension on agricultural land value in South Africa

Preserving the African Growth and Opportunity Act (AGOA) helps sustain export-oriented farm income and supports investment in production, infrastructure, and compliance systems. 

All these contribute to maintaining the value of agricultural land, says Simohn Engelbrecht, trade and relations specialist at Agri SA.

“Without the extension, higher tariffs would have reduced the competitiveness of South African agricultural exports in the US market. This would likely have placed pressure on farm profitability, particularly in export-dependent sectors,” Engelbrecht says.

According to the United States Trade Representative's website, AGOA has been at the core of US economic policy and commercial engagement with Africa since its enactment in 2000.

“AGOA provides eligible sub-Saharan African countries with duty-free access to the US market for over 1 800 products, in addition to the more than 5 000 products that are eligible for duty-free access under the Generalized System of Preferences program.” 

To meet AGOA’s rigorous eligibility requirements, the website says countries must establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process.

Additionally, countries must eliminate barriers to US trade and investment, enact policies to reduce poverty, combat corruption, and protect human rights, it says.

Agri SA, whose vision is to ensure an inclusive and prosperous agricultural sector, says the one-year AGOA extension provides continued access to the U.S. market for key agricultural products in South Africa, which support farm-level income, export demand, and overall business stability.

Engelbrecht says they welcome the extension and encourage landowners and producers to continue focusing on productivity, market diversification, and long-term sustainability. 

It says that while the extension provides important relief, longer-term certainty remains essential. “AgriSA continues to engage constructively with government and international partners to support stable market access and an enabling environment for agriculture. We remain committed to representing the interests of farmers for a competitive, resilient, and inclusive agricultural sector.” 

The US authorities' formal extension of the African Growth and Opportunity Act (AGOA) trade preference program through December 31, 2026, is a welcome development, said Wandile Sihlobo, chief economist at the Agricultural Business Chamber of SA (Agbiz). He said that while the Liberation Day tariffs of 30% have distorted the benefits of AGOA to some extent, it remains crucial.

“In the absence of AGOA, some South African export products to the US would have likely faced around 33% tariffs, including Most Favoured Nation (MFN) tariffs, in addition to Liberation Day Tariffs.

Here, we have added an average 3% lower-end MFN tariff, but the rates generally differ by product. Thankfully, we are not at this stage, and South Africa still faces around 30% tariffs on non-exempted products under the Liberation Day tariffs. 

Zooming into South Africa's farming sector alone, the U.S. remains an important market, Sihlobo said.

“The US accounted for approximately 4% of South Africa's total agricultural exports in 2024 (overall SA farm product exports were valued at US $13.7 billion).

The exports were also strong in the first two quarters of 2025. Even after the Liberation Day Tariffs were announced, some exporters took advantage of the 90-day pause on the higher tariffs and exported more volume than usual.

In fact, in the second quarter of 2025, South Africa's agricultural exports to the US increased by 26% to US$161 million.”

The chief economist states that it was only in the third quarter of 2025 that they observed some cooling in exports. Notably, he said South Africa's agricultural exports to the US decreased by 11% in the third quarter of 2025, compared to the same period a year ago, at US$144 million.

The composition of the products has not changed much; it is mainly citrus, wine, fruit juices, and nuts, amongst other typical agricultural exports to the US.

“We are yet to have the final quarter of 2025 data to have a full-year view. The 4% share of the US in South African agricultural exports is not small, as few specific industries are primarily involved in these exports. These are mainly citrus, table grapes, raisins, nuts, wine, fruit juices, and ostrich products, amongst others.”

Agbiz said it was also worth highlighting that the US has decided to modify its reciprocal tariffs and exempt some food products, thus easing agricultural trade friction, which is costly to both exporting countries and US consumers.

It said the exempted products include coffee and tea, fruit juices, cocoa, and spices, as well as avocados, bananas, coconuts, guavas, limes, oranges, mangoes, plantains, pineapples, various peppers and tomatoes, beef, and additional fertilisers. 

From a South African perspective, Sihlobo said it is oranges, macadamia nuts and fruit juices that benefit from the exemption.

“The rest of South Africa's agricultural products currently face a 30% import tariff in the US market. With the AGOA extension now official for the year, the tariff remains at 30%. From now on, the key focus for South Africa should be on securing a trade agreement with the US, as the current higher tariffs continue to disadvantage South Africa compared to our competitors in the US market.” 

A report titled Land Availability and Land-use Changes in Africa, by the Programme for Land and Agrarian Studies (PLAAS), Alliance for Food Sovereignty in Africa (AFSA), and the Institute for Agriculture and Trade Policy debunks the persistent claim that Africa holds vast tracts of unused farmland ready for industrial agriculture.

This report is said to expose how competing pressures-from extractive industries, biofuels, and carbon markets-are driving massive land-use change and undermining communal tenure systems.

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