SA grain production – present and future

Jaco Minnaar, from Hennenman in the Free State, was elected as Grain SA chairperson earlier this year. He spoke to Annelie Coleman about the organisation’s future plans, and what role commodity organisations such as Grain SA have to play to ensure long-term sustainable and profitable grain production in South Africa.

SA grain production – present and future

Are commodity organisations, such as Grain SA, still relevant in South Africa?
Organisations such as Grain SA are needed now more than ever. South Africa’s primary product off-takers and suppliers are faced with a government more loyal to voters than to economic drivers. It is impossible for individual grain producers to lobby effectively on their own, and they therefore need a collective lobbying mechanism, such as Grain SA.

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Grain SA is focused on providing much-needed services and support to producers to ensure long-term sustainable and profitable grain production. Our main objectives include providing support to farmers to increase productivity through the ongoing supply of correct, applicable and timely information, research, lobbying and influencing the policy and legislation environment, expanding markets, farmer development, skills development and educating broader society on the importance of grain producers.

At the 2016 Grain SA congress, Hamish McBain, retired executive director of Tiger Brands, said that the time for an Agridesa (not dissimilar to the Codesa) for the agriculture sector was overdue. Your thoughts?
Role players in the agricultural sector must share the same vision and long-term goals. We cannot afford to pull in different directions. All role players, including government, need to take collective responsibility for the expansion and support of the grain production industry in South Africa. Grain farmers do not just produce a commodity – they produce the food on people’s tables. The current drought has shown us how fragile the sector is; we have no choice but to take hands to ensure that there is enough quality food and that it is affordable.

What is your role as Grain SA chairperson? What issues will you address this year?

Over the decades, Grain SA has developed into a corporate entity, moving away from old- style agricultural unions where the farmers on the board were the ultimate decision-makers. My role as chairperson has evolved into a position akin to the role of a chairperson of a board of directors. The position nowadays calls for leadership of the management structures of the organisation.

The most important issue Grain SA will have to manage in 2016 is the drought and its effects. We have to do everything possible to push grain production up to normal levels in the 2016/2017 production season – to the benefit of both producers and consumers. We must do everything we can to keep our members farming grain. Better productivity in production, reforming the wheat industry and training and enabling our producers (both commercial and new) will remain high on our agenda.

What did you learn from your predecessors, and Louw Steytler in particular?
I follow in the footsteps of a number of legendary leaders who did much to put grain production on a sound financial and economical footing. I had served under Louw since 2003, when I started working at Free State Agriculture. He is a strong constitutionalist, and this is the only way one should and can operate in South Africa.

The Constitution determines the rules of the game, so to speak, and offers the ultimate protection to all South Africans. He is an inclusive leader and encouraged broad participation. He does not compromise on principles. I would like that to be said about me in 10 years’ time.

Where do you see the SA grain production industry in ten years’ time?
Society always needs local food producers. It is too expensive to import food, such as maize for maize meal, in the long term. Our members are by far the best positioned to produce affordable food. The fact that large-scale food imports are not an option for us was underscored by the drought and maize shortage. Reduced agricultural production resulted in sharp price increases that affected the entire SA economy.

Of course there will be challenges and droughts in the future, and we will lose some producers as a result. However, most will consolidate and expand their businesses and will continue to produce food for South Africa and our neighbours. Our members are resilient and have proven that they are capable of producing high-quality grain under very challenging production conditions. We nevertheless need to manage grain production in such a way that we contribute to food security through the production of high-quality, affordable grain. This calls for hard work, but Grain SA is committed to the task ahead.

What is the drought’s long-term effect on SA’s grain industry?

Its impact on the industry will not be as dramatic as it will be on individual producers, due to producer price increases and the devaluation of the rand. The 30% drop in production resulted in a 60% increase in maize prices, for instance. This means a higher average farm gate income. However, there are those individuals who stand to lose everything. They will have to exit the industry after a lifetime of hard work – with nothing to show for it. So, we are faced with two extremes, and a lot in between.

A considerable portion of the producers in the western summer grain production region face serious economic and financial survival challenges. For example, the five-year average rainfall on my farm in Hennenman was about 180mm lower than the previous 100 year average. The past five years’ rainfall was the lowest since 1906. We need to rapidly adapt to changing weather patterns, reduce risk through lower plant populations and improve efficiencies in terms of fertilisation. Improved balance sheet management and marketing are important.

What is Grain SA’s responsibility in terms of the integration of subsistence, smallholder and emerging farmers into mainstream, commercial grain production?

Grain SA is committed to the transformation of the grain production industry without compromising food security, affordability and quality. Transformation needs to take place within the requirements of our Constitution, and we need to work hard to achieve this objective. Our members have proven themselves as experts in the field of primary grain production, and it would thus be foolish for someone to embark on a farmer development programme without our input.

We have proved our commitment to the development and establishment of successful, efficient new farmers through our highly successful and acclaimed farmer development programme. We have successfully supported many new farmers on their path to becoming fully fledged commercial grain producers. However, no farmer development programme can succeed in isolation. We need the support of the entire value chain; we cannot do this alone.

We can only train, support and mentor farmers to a point, and lack of funding for these farmers is the primary stumbling block. It is crucial that government step in, as we cannot commercialise farmers on the normal financing models. Lack of land ownership, collateral and financing history are some of the constraints that make it impossible for these individuals to obtain financing from commercial banks, for example. Only through private ownership, title deed holding, input insurance subsidies and state warranties, among others, will true, long-term sustainable transformation be achieved.

Email Jaco Minnaar at [email protected].

This article was originally published in the 13 May 2016 issue of Farmer’s Weekly.