Agriculture director general Masiphula Mbongwa thinks government might allow the use of maize for biofuels if farmers produce a surplus this season. “If we can show Cabinet that South Africa’s maize farmers can comfortably produce surpluses, we can convince them to allow maize as a feedstock for biofuel production,” Mbongwa said.
Fears that biofuels might compete with food production moved Cabinet to play it safe and ban the use of maize for biofuel production in December. The decision came as a major blow to South Africa’s maize producers, as another market for surpluses might have stabilised fluctuating maize prices.
However, Mbongwa said farmers shot themselves in the foot when they planted less maize during the 2005/06 production year, and Cabinet chose to ignore the 12 million ton maize harvest of the 2004/05 production season. A 3 million ton surplus in 2005 saw the maize price plummet to around R600/t, leaving farmers with a R300 shortfall on their input costs. Farmers had no choice but to produce less maize the following season.
At a meeting held after the maize ban, Grain SA, Agri SA and the National African Farmers Union (Nafu) told land and agriculture minister Lulama Xingwana their members were capable of producing surplus maize that could be used for biofuels without impacting on food security. The minister said she would arrange a meeting with the minerals and energy minister, Buyelwa Patience Sonjica, with a view to reopening the subject.
But if Mbongwa is right, Cabinet will want proof. This is an unfair burden to place on farmers, according to Ferdi Meyer of the University of Pretoria’s department for agricultural economics. “Farmers need a price to plant,” he said. “Currently maize prices are good and if we have a surplus, which is very likely this year, we expect the price to reach import parity, which is currently around R1 380/t,” Meyer explained that if current prices prevail and input costs don’t rise too steeply, farmers may be able to deliver on the agriculture department (DA’s) wish. But despite reports of looming global maize shortages, Meyer warned that import parity will most likely come down.
“We didn’t expect it to rise to the levels it’s at now,” he said. “Government must remember no farmer can afford to produce at a loss. The free market dictates the maize price, which determines whether farmers can afford to produce maize profitably.”
Meyer said that for once the fact that farmers always plant more than they’re advised to may pay off, if the DA successfully uses surpluses as motivation for including maize in the biofuel strategy before Cabinet. “In 2006 Grain SA all but begged farmers not to plant more than 2,4 million hectares to maize, but farmers planted 2,8 million tons,” he said. “They listen to nobody.” – Jasper Raats
Issue date: 25 January 2008