While farmers are forced to absorb the impact of soaring fuel and other input costs as well as platteland crime, politicians and labour unions are still quick to blame farmers for high food prices. To combat this disinformation TAU SA north recently took a group of journalists on a tour through the Limpopo province where they gained first-hand information about how price determination on supermarket shelves lies beyond the reach of farmers.
“At the end of November last year I bought fertiliser for a third of its current price,” said Japie van der Goot, chairperson of the Bo-Brak Farmers’ Association and a potato farmer in the Soutpansberg district. H e stressed that farmers’ margins are starting to feel the pinch of increasing input costs. “To produce and harvest 4 500 bags of potatoes, at 10kg each, costs R108 000,” said Van der Goot.
“At the current price of R22 per bag, farmers fall short by R9 000. We need at least R24 per bag just to break even.” To remain profitable he has to cut costs somewhere, but the only area he hasn’t already cut costs on is labour. However, mechanisation has social consequences. “It’s no time to cut back on labour,” he laments. “This district has a lot of hungry mouths to feed. Cutting back on workers now could also make it difficult to get them back when the economic situation improves.” F armers who were visited also expressed their concern over their inability to source South African labour, as well as certified foreign labour.
“With the minimum wage at just over R1 000/month, why would people work on farms if they can access social grants of R200/child/month?” asked vegetable farmer Bertus Otto of the Waterpoort district. He said that labour costs had increased by 12% in the last year, packing by 15%, diesel by 31%, transport by 19%, while toll gate fees and tyre prices had increased by 12% and 11%. While government support in the form of fuel rebates would benefit both farmers and consumers Muller Vermaas, who owns a 2 000-strong feedlot in Bandelierkop, said that government should not interfere in agriculture too much.
Vermaas had just returned from a visit to Argentina to see the state of that country’s red meet industry and what knowledge he could bring back to SA. “What realised while was there was that we have it very good here,” said Vermaas. “A few years ago the Argentinian government decided to set the price of red meat from farm to fork because of the locals’ love for meat. It ensured that the product would be cheap, but when the maize price started climbing farmers slowed production and some even stopped altogether.
When farmers asked for their prices to be increased to meet rising feed costs the government remained unfazed and said that if farmers couldn’t manage feed costs then they should just stop producing. This caused public uproar so the government decided to subsidise maize to the tune of US$4 000 (R31 200) to US$8 000 (R62 400) per hectare produced.” Vermaas added that the high export parity on Argentinian red meat, discouraged exports to the rest of the world and was a good opportunity for to increase its production. e said that because maize farmers need to earn between R2 500/t and R3 000/t of maize to remain sustainable, beef farmers needed another R3/kg on the current meat price to stay in business. – David Steynberg
