SA farmers must make market-smart decisions

South African farmers must make ‘market-smart’ decisions. Interest rates are at their lowest level in 30 years and this creates the ideal opportunity for farmers to invest in technology.

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This is according to University of the Free State agricultural economist Prof Johan Willemse. Speaking at the Senwes Young Farmers’ Day in Bothaville recently, Willemse said that land was just one production factor in any farming enterprise. Other factors included entrepreneurship, labour and capital. “There will always be a demand for agricultural products. However, low production costs are a prerequisite to remain competitive.

Technology minimises the gap between input costs and producer prices. If farmers do not invest in technology now, they will be left behind by their rivals in five years’ time,” he said. The term technology did not exclusively pertain to machinery and equipment, Willemse said.

It also included an understanding of how agricultural commodities were traded on Safex. The application of relevant technology would decide the future of South African farming operations. It could cut production costs and save time, he said.  “I’ve visited a highly mechanised Australian farm where a 400ha grape and olive operation is managed by only five people. Another example is a sheep farm in the same country where the 2 000-strong flock is managed by one man and three sheepdogs,” Willemse said.

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He added that young farmers should remain positive. “People who become negative make poor decisions and in 10 years they won’t be farming any more. Concentrate on what you can manage. That should be your focus,” Willemse said.