Agriculture business leaders recently predicted that South Africa will lose up to a half of its commercial farmers in the next 20 years.
However, Prof Nick Vink, chair of the Department of Agricultural Economics at Stellenbosch University and researcher at the Bureau for Food and Agricultural Policy, equated this to scare-mongering.
Ernst Janovsky, head of ABSA’s AgriBusiness division, recently warned that South Africa could lose 15 000 commercial farmers if the government doesn’t turn to better and friendlier agricultural policies.
“A supportive, well-considered agricultural policy is needed for farmers to take advantage of positive global demand for commodities, which in turn is driving investment in the sector,” he said. This predicted reduction in commercial farmer numbers bodes ill for job creation in the agricultural sector.
Tina Joemat-Pettersson, minister of agriculture, forestry and fisheries, recently said in parliament that her department hoped to create 90 000 new jobs annually in the sector. With a predicted decline in commercial farmers this seems unlikely.
Aggrey Mahanjana, managing director of the National Emergent Red Meat Producers’ Organisation, said farmers are having a tough time keeping afloat due to ever-increasing input costs such as electricity and fuel. “The new power hikes are ridiculous, and will make farming more unprofitable,” he said.
Mahanjana added that land reform had also caused uncertainty for white commercial farmers, aggravated by calls to expropriate land without compensation, and added that these farmers were presented with lucrative farming deals in many African countries.
“Unless government comes up with a turnaround strategy, farming won’t be lucrative,” he warned. “I’ve already quit farming in Gauteng due to stock theft.” Johannes Möller, president of Agri SA, said SA stands to lose almost half of its commercial farmers in the next 20 to 30 years. Möller said one contributing factor is economy of scale. “The political situation is also contributing to farmers leaving the sector,” he said.
However, Prof Vink said there is no concrete evidence for Janovsky’s predictions. He said the 2007 agricultural census showed South Africa had 40 000 commercial farmers, of which around 5 000 were classified as medium to large farmers.
Almost 3 000 had an annual turnover of more than R5 million and about 2 100 had a turnover of between R3 million and R5 million.
These farmers are responsible for about 50% of jobs in agriculture, and about 62% of the total farm worker remuneration, said Prof Vink. He added that the 30 000 farmers remaining only produced a third of the total agricultural output.
Vink is confident that the numbers of medium and large-scale farmers won’t dwindle. “We expect the number to remain stable,” he said. – Peter Mashala