Red Meat Industry Forum chairperson Dave Ford raised concern over agriculture minister Lulama Xingwana’s announcement that the presidential working group on agriculture had recommended VAT be scrapped on sorghum, baby foods and chicken.
“We are extremely concerned about the discriminatory approach being proposed,” he said. “If implemented, it will have massive implications for our industry.” He explained that while the Industry Forum is not opposed to the principle of zero-rating of VAT on basic foodstuffs, ”the problem we are highlighting is that it seems to be only certain foodstuffs that are being recommended for zero rating.”
The red meat industry competes directly with the poultry industry. In effect, this proposed intervention would mean that poultry products could be offered to the public at 14% less. “That 14% is not achieved from any competitive advantage, but from the discriminatory exclusion of VAT,” Ford explained. Since the benefits of zero-rating will apply to all consumers and not only to the poor, the Red Meat Industry Forum is concerned that this will affect the whole spectrum of the market. ”The implications are that chicken could replace red meat and the red meat industry could simply disappear through no fault of our own,” he said. – Staff reporter
Biofuel could threaten wetlands
Report by Wetlands International, entitled Biofuel Production in Africa, has raised concerns that the large-scale growing of crops on the continent to feed the growing demand for biofuel will threaten the health of wetlands and the status of freshwater resources.
Wetlands International spokesperson Alex Kaat said by 2020 Africa was likely to make a substantial contribution to the global biofuel demand. However, the millions of hectares required to produce feedstock for biofuel plants would likely be on top of existing agricultural areas and in ecologically sensitive areas like wetlands and rainforests.
“The most promising crops for biofuel production are sugarcane for bioethanol and palm oil for biodiesel, with other suitable varieties eventually including sorghum and cassava,” Kaat explained. “Thousands of hectares of these crops will be needed around biofuel production mills and will use a lot of water, usually much more than rainfall can provide.” “These two factors make natural wetlands and rainforests with uninhabited or communal land attractive for biofuel production. They will have enough water and few problems in terms of land rights for establishing huge feedstock plantations in a short space of time,” he said.
The Wetlands International report pointed out that similar trends were already visible in South-East Asia where complex land rights in populated areas were resulting in the use of peat-swamp forests for palm oil plantations. In Africa, sections of the Tana wetlands of Kenya and the Tanoé swamp forests of the Ivory Coast are already being converted to crop production for biofuel. “Biofuel production has a negative local impact on people downstream of the plantations,” added. “feedstocks like sugarcane consume large quantities of water, cause erosion and they demand fertilisers and pesticides.
“In Africa especially, these factors will affect many people who directly depend on the water quality and quantity of nearby wetlands such as rivers and marshes. Local food production might also be under threat from the establishment of biofuel crop plantations.”
Wetlands International said that while it appreciated that biofuel could improve energy security, improve trade balances and create added value for economies, it called for global biodiversity and social criteria to apply in its development. The organisation added that it was currently working on an early warning system to protect against the indiscriminate conversion of wetlands into biofuel feedstock plantations. – Lloyd Phillips
Wool season ends on steady note
The wool market seems to have stabilised as the season nears its end, according to Ona Viljoen of Cape Wools. She said the Merino indicator closed unchanged at R61,50/kg (clean) partly due to a weaker rand (at R7,70 against the US dollar and R12,09 against the euro). “Prices were mixed with some categories gaining up to 4,5% while others were cheaper. Average short wools were significantly down,” she said. To date, receipts accumulated into brokers’ stores are up 3,6% compared with the corresponding period last season, which could indicate an increase in production. Last season saw production increasing 2,2%.
Cape Mohair & Wool manager Johan Louw said prices for fine wool were slightly lower except for a few selected super-fine lots, which fetched excellent prices. Long and medium wool of 19 micron and stronger improved by about 1%. Good quality short wool recovered after weakening during previous sales and improved by 7%. Competition by grease exporters was very good. Cape Wools confirmed that the offering of 10 623 bales was slightly lower than at the previous sale and 95% was sold. Major buyers were Modiano (3 149 bales), Standard Wool SA (1 791 bales), Stucken (1 785 bales) and Chargeurs (1 359 bales).
A verage price movements for AWEX-type fleeces MF4 and MF5 of 70mm and 80mm were as follows: 20 microns were down 1,5% at R68,13/kg, 21 microns were 0,6% cheaper at R63,26/kg, 22 microns shed 1% at R59,97/kg and 23 microns were down 2,1% at R57,66/kg. There were no quotes for 19,24 and 25 microns, due to insufficient quantities in these categories. – Roelof Bezuidenhout
