Business confidence in agriculture crashes

Confidence in agribusiness tumbled in the first quarter of 2009 on the back of the global financial crisis, alongside business confidence in the small, medium and micro-enterprises (SMME) sector.
According to Prof Nicholas Biekpe, president of the Africagrowth Institute, the overall Business Confidence Index fell 27,28% compared to the last quarter of 2008.
And the year-on-year drop in the ABC/Industrial Development Corporation agribusiness confidence index was 29,42% for the first quarter of 2009, according to Lindie Botha, manager of economic intelligence at the Agricultural Business Chamber (ABC). She added the decreases in sub-indices for turnover and nett operating income, to which farmers contribute directly, may indicate farmers have less disposable money.
Although the sub-index for financing costs decreased, the sub-index for debtor provision for bad debt didn’t decrease with it. This indicates farmers may be having a difficult time paying debt to agribusinesses. Botha said this may be because harvesting hasn’t started.
However, increases in sub-indices for employment and capital investment for agribusinesses, as well as an increase in tractor sales, may indicate farmers still have capital to invest. – Drieka Burger