Cornie Swart, president of Agri Wes-Cape, told farmers at the organisation’s annual congress in Rawsonville that in order to maintain a strong agriculture sector in SA, farming would have to enter a new cycle.
This new cycle, he said, would be commercial agriculture’s third in SA. During the early 20th century the sector went through its first major cycle, which involved labour intensive production systems coupled with low productivity. “More that 30% of the population needed to be involved in the production of food,” said Swart.
The second cycle, which unfolded during the 1950s, was characterised by the use of better production management practices and agricultural inputs, resulting in higher productivity.
The cycle also saw great increases in economies of scale and consolidation of smaller farming units.
“The third cycle, the new era we are currently entering, will most likely teach us that small farming units were not without merit and the larger units are not necessarily the only way forward,” said Swart.
The new cycle, he added, would be marked by a shift in focus from effectivity to profitability as farmers meticulously manage input costs in a bid to cope with a worsening cost-price squeeze in the sector.
Swart said there would also be a shift from specialisation to integration as farming businesses diversify and integrate down the value chain.