Many of the comModities imported into South Africa over the past year could have been produced locally. This is according to Prof Johan Willemse from the University of the Free State’s Department of Agricultural Economics.
Addressing the Absa AgriBEE seminar in Stellenbosch, he said is now a net importer of food at a time when world food stocks are at a 40-year low, accompanied by record high prices.
“These commodities could have been produced in South Africa,” Prof Willemse said, but noted that agricultural policies to increase investor confidence are needed, since our government ranks as one of the least supportive governments in the world in terms of agriculture.
This might be the answer finance minister Trevor Manuel was looking for in his recent article on the ANC Today website, which said it’s important to get a better understanding of why SA farmers are not investing to boost production. Manuel might also want to consider the impact the new Expropriation Bill currently before parliament is having on investor confidence.
Agri SA’s parliamentary representative, Annelize Crosby, and Agri Free State’s Henk Vermeulen both reported that farmers are becoming increasingly concerned about the possible impact of the Bill.
Addressing a recent working session with agricultural leaders, business people and politicians in Bloemfontein, Vermeulen said, “The farmers are under strain. They are tense and unsure about the future.”
Willemse warned that agriculture needs a severe turnaround strategy to ensure food security, especially when taking into account that the whole southern African region is a net importer of agricultural commodities such as maize, wheat and rice.
He told delegates that the loss in export earnings of commodities resulted in substantial economic losses in rural areas in Africa. With a GDP multiplier of 1,5, rural areas were becoming poorer due to reductions in agricultural activities, reducing economic growth opportunities.
“current situation also requires larger financing abilities as input costs, which are estimated at R20 billion for the current season, are more than double those of a year ago,” Willemse said.
He referred to the dire situation the Land Bank is facing, and said that commercial banks will have to come to the fore. – Wouter Kriel
Expropriation Bill drives farmers out of SA
The new expropriation bill BEFORE parliament could be the straw that breaks the camel’s back, said Agri SA’s parliamentary representative Annelize Crosby. She was commenting on the increase in South African commercial farmers wanting to leave the country.
Free State agriculture recently reported numerous inquiries from farmers planning to sell their land and leave the country because of the draft Bill. “South Africa can’t afford to lose any more commercial farmers,” said Crosby. “This will have a devastating impact on the economy and lead to further food price increases, food shortages and ultimately to instability in the country.”
Absa agribusiness head Ernst Janovsky agreed that the uncertainty around unsympathetic government policies such as the Expropriation Bill is impacting negatively on investment in the sector, to the extent that commercial banks are finding it difficult to grow their agricultural books.
He said the biggest reason behind farmers leaving the sector and the country is the restitution process. “Farmers are forced to sell their land for restitution and because of other factors such as crime, political instability and a lack of government support, they decide not to invest in alternative land in Africa, but rather to farm in Australia, New Zealand, America and Zambia, where they feel more appreciated.”
The problem with restitution is that it’s indiscriminate and forces struggling farmers, who may have left the sector for economic reasons, as well as top producers in the 10% that produce 90% of SA’s food, off the land, said Theo de Jager, chairperson of Agri SA’s land committee.
But Reverend Otto Mbangula,vice-president of Nafu and Free State chairperson, has no sympathy for commercial farmers. “We advocate an increase in the percentage of black-owned land from 30% to at least 50%, ultimately representing the demographics of South Africa,” he said, despite indications that the country is losing its production capacity. – Annelie Coleman
Tougher times ahead
“The worldwide energy crisis, food scarcity and water shortages due to climate change are all realities we need to face,” said Gill Marcus, chairperson of Absa, at the recent Absa AgriBEE seminar in Stellenbosch, Western Cape. “But these are not surprises that were sprung on us; we’ve been aware of the signs for some time, and now we have to react to them.”
Marcus referred to the international financial crisis, saying that South Africa will not be unscathed. “This year will be tough, but next year may be even tougher,” she said. It’s against this backdrop that local farmers, financial institutions and government need to make a success of AgriBEE, she said.Marcus encouraged delegates to use the seminar as an opportunity to apply creative and innovative thinking towards partnership-forming for AgriBEE solutions. – Wouter Kriel