The recently released record-high Agbiz/IDC Agribusiness Confidence Index figures provide agricultural producers with the opportunity to reinvest in their farming concerns and address their debt structures.
This was according to Francois Strydom, Agbiz chairperson, who told Farmer’s Weekly the combination of high yields and prices contributed greatly to the exceptional performance of the agriculture sector. It also attested to the resilience of South African farmers.
“The combination of a spike in commodity prices and high production is a very rare combination, [and] is evident across the board and not only in the grain production sector. This year was [also] characterised by brilliant fruit harvests, including apples, citrus, avocados and grapes. The local citrus industry, for example, has grown to such an extent that South Africa has become the second biggest exporter in the world, second only to Spain.
“Livestock prices also gained momentum and breeding animals achieved exceptional prices,” Strydom added.
According to a statement by Agbiz, in the second quarter of this year, the index reached the highest level since its inception in 2001 of 75, up from 64 in the first quarter of 2021.
This was attributed to higher domestic and global commodity prices, which were mainly supported by growing demand from China, combined with drought conditions in parts of South America.
Strydom said for the first time in 15 years, following (among other factors) extreme climatic conditions such as droughts and floods, farmers were in the position to address high debt levels, and cautioned them to address the matter of debt as a priority.
“It is a fact that every high in the economy is followed by a downturn. That is why debt clearance and reinvestment are so important. My message to farmers is to not go overboard, but to exploit the opportunities created by positive conditions responsibly,” he explained.