“All members of the value chain have a role to play in supporting new farmers,” he said. “A starting point is to make sure we co-ordinate efforts among all players in the value chain. “You can’t just sell a tractor to a farmer and move on, or provide a farmer with finance and ask for your money back in six months’ time. “We’re crafting a new methodology and are working to put in place a new business unit where all chain players will be involved and committed.”
The potato industry offers huge potential in terms of job creation, rural development and food security. “But transformation won’t succeed unless we grow the industry,” said Jooste. “We’re researching optimal financial solutions so that smallholder potato producers can access funding. We’re also conducting feasibility studies and business plans for between 10 and 15 smallholder producers.” Potatoes Africa director Chris Dwen said emerging farmers needed serious help.
“The only way they will survive is if they form co-operatives to get their numbers up. If they collectively place orders for seed and fertiliser, they can negotiate lower prices.” Production costs currently amount to R57 261/ha under irrigation and, with yields of 35t/ha, could generate potential income of R70 000/ha. Net profit is R12 739, or a 22% return on investment.
“That’s not too bad. But farmers still have to pay for other associated costs such as maintaining roads and irrigation water. Profits are tight,” said Dwen.
In 2007, production costs were R31 355/ha and expected income off 35t/ ha was R1 500/t or R15/bag. In 2013, costs are R57 261/ ha and expected income is R2 000/t or R20/bag. “Costs have increased by 82% since 2007 but income has increased by only 33%,” said Dwen. “The only way to increase net income/ ha is to increase yield and/or quality. We have to box clever.”
PSA transformation manager Nomvula Xaba said that PSA had partnered with the Western Cape and KZN agriculture departments to address small farmer development and extend technical support to more growers. “But we’re looking to form partnerships with more provinces to ensure farmers have the support and equipment they need to make it in this business,” she said. “We’re a small industry. We can’t do this alone.”
