Speaking at the Standard Bank business breakfast, recently held at the first-ever Mpumalanga Agricultural Show, Keneilwe Nailana, senior manager for agribusiness at Standard Bank, said that the bank perceived debt as positive in this instance, but that producers needed to invest their money in profitable assets that added value to their businesses.
“Farmers must be sure the profits from investment are enough to service the debt they are taking on,” she said.
Nailana also said that the harvesting of the maize bumper crop would alleviate farming debt in the short-term. However, she explained that farmers needed to hedge to ensure they received prices that would keep their operations profitable.
Meanwhile, Nailana added that policy uncertainty was curbing economic growth.
“The world economy is projected to grow by about 3,5%. Why can’t South Africa piggy back on that? The problem is [policy] uncertainty,” she said.
She added that consumers would be under pressure for most of 2017, and up to the first quarter of 2018 atleast.