The industry is therefore eagerly awaiting Minister of Finance Pravin Gordhan’s 2016 national budget speech on Wednesday, 24 February.
Whether government heeds the recommendations made by FSA and others will give the sector a “clear idea” of how willing government is to alleviate the impact of the drought “and the regard it has for the farmers of the country,” said Vermeulen.
In its report to government, the National Drought Task Team said nearly R6 billion was needed for the provision of animal feed and fodder and R4 billion for direct subsidies to subsistence and smallholder farmers for direct production inputs, said Vermuelen. A further R170 million was needed to subsidise interest on credit and carry-over debts.
Nearly R160 million was needed for farmers in severe financial distress while R979 million was needed for new credit and national livestock herd rebuilding, according to the task team’s report. Subsidies of R954 million were needed for a farm worker retention programme to counteract large-scale unemployment.
“The question nevertheless remains whether the government has the money to invest in the agricultural industry in this way,” said Vermeulen.
An added concern is the distribution of drought support funds, he said. In the past, the sector has experienced “flagrant discrimination” against commercial farmers where all the funds available were channelled exclusively to emerging farmers.
“I am concerned that the policy makers fail to grasp the severity of the situation,” said Vermeulen.
“They might be in for a rude awakening should SA lose food self-sufficiency and have to start importing food at exorbitant costs.”
The Drought Task Team consists of the department of agriculture, organised agriculture, banks and agribusiness, among others.