The CEO of the Agricultural Business Chamber Tobias Doyer said the agriculture industry needs to develop partnerships with private organisations and government to ensure the development of technology to increase farm productivity and reduce costs.
This, he said, would ensure food is produced cheaply and sold at lower prices to consumers. It would also improve fortunes in the industry, which recorded a 22% negative growth last year – mainly due to input costs rising faster than producer prices over the past few years. Johann Kirsten, from the Department of Agricultural Economics, Extension and Rural Development at the University of Pretoria, said research has primarily focused on livestock and specialist services over the past few years, while studies into field crops hardly ever exceeded 20% of total research expenditure. “The grain industry therefore has to prove its valuable contribution to food security in SA to stimulate more investment in research in the grain industry,” he said.
However, increased production could lead to a drop in prices, reducing the total gross value of the industry. must therefore have access to up to date and accurate market information to ensure production satisfies market demands and consumer preferences, said Andrew Makenete, general manager of Absa AgriBusiness.
Both Makenete and Doyer identified the production of high-quality products and value-adding as a means for producers to increase their prices and maintain market share. The industry must also be active in marketing its produce, said Doyer. Africa is currently one of SA’s largest maize export destinations with more than 55% of its maize being sent to Zimbabwe. He said the grain industry will have to determine whether exports to Zimbabwe are sustainable considering the production capacity and political environment of that country.
Doyer added that other export markets should be developed to reduce risks. Kirsten identified public investment in infrastructure as another potential contributor to agricultural growth, saying better rural infrastructure would help enhance the productivity of physical resources and improve supply chain management and value adding.