South Africa has been the largest beneficiary of the African Growth and Opportunity Act (AGOA), particularly its agricultural sector, so its expulsion by the US Administration, while not altogether unexpected, will be felt. The loss of preferential access to the US markets may mean a drop in productivity and impact agricultural livelihoods. But it may also portend an opportunity: it is a sign that the sector needs to increase its competitiveness by tackling infrastructural constraints at home. Econ3x3 asked two agricultural economists, Walter Shiba and Wandile Sihlobo, for their views.

A major blow to agricultural trade

The decision by the United States Trade Representative (USTR) to remove South Africa from the African Growth and Opportunity Act (AGOA) from 1 January 2027 represents a significant development for the country’s agricultural export sector. For more than two decades, AGOA has provided duty-free access to the US market for a wide range of South African agricultural products, including citrus, wine, macadamia nuts, table grapes, and fruit juices.

South Africa has been the largest beneficiary of AGOA, with agriculture among the sectors that gained most from preferential access to the US market. 

Which agricultural industries are most exposed?

Among agricultural industries, the citrus sector is likely to feel the greatest impact. According to the Citrus Growers’ Association, the US market supports a substantial share of export-oriented production and employment, particularly in parts of the Western Cape and Northern Cape. Industry estimates suggest that approximately 35 000 jobs are linked to citrus exports benefiting from AGOA preferences. 

Other industries facing increased exposure include wine, table grapes, avocados, macadamia nuts, and fruit juice exports. Without AGOA preferences, these products will compete under standard US tariff schedules, potentially reducing their price competitiveness and profitability.

The National Agricultural Marketing Council estimates that exclusion from AGOA could reduce output in the fruit, vegetable and nut sectors, while also negatively affecting agricultural employment and rural livelihoods. 

The real risk is competitiveness

While the loss of AGOA will increase market access costs, South African exporters are unlikely to lose access to the US market entirely. Rather, the challenge is that competitors such as Peru and Spain may gain a relative advantage in supplying high-value produce to US consumers. 

The AGOA decision therefore highlights a broader issue facing South African agriculture: competitiveness. Rising logistics costs, congestion at ports, infrastructure constraints and increasing production costs continue to pose significant challenges to export growth. In many cases, these factors have a greater influence on long-term competitiveness than tariffs alone. 

A case for market diversification

The removal from AGOA reinforces the need to diversify export markets. Although the United States remains an important destination for selected products, South African agriculture has increasingly expanded its footprint in Asia, the Middle East and across the African continent. 

Recent efforts to secure additional market access opportunities in China and Thailand demonstrate the importance of broadening export destinations and reducing reliance on preferential trade arrangements with any single country. 

Moreover, the African Continental Free Trade Area (AfCFTA) presents opportunities to deepen regional agricultural trade and strengthen African value chains, creating alternative growth pathways for South African agribusinesses. 

Turning a setback into an opportunity

The loss of AGOA is undoubtedly a setback for export-oriented agricultural industries. However, it also serves as a reminder that long-term export success cannot depend solely on preferential market access. Improving logistics efficiency, investing in infrastructure, reducing transaction costs and expanding access to new markets will be critical to sustaining agricultural growth and employment.

For South African agriculture, the central lesson is clear: resilience lies not in preferential trade agreements alone, but in the ability to compete globally on productivity, quality, and reliability. If the sector can address its structural constraints while continuing to diversify markets, AGOA’s loss may ultimately become a catalyst for a more competitive and resilient agricultural economy.

Written by Econ3x3