It takes money to make and save money

With profit margins remaining under pressure, farmers need to pull out all the stops to stay in business.

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More efficient equipment and a productive labour force, as well as better-performing cultivars and livestock, all contribute to maximising profits. All of this, of course, requires capital. A new fuel-efficient tractor with improved performance may save you money in the long run, but you need the funds to buy it upfront. Even measuring the performance of livestock is costly and time-consuming. 

However, you need only look at the statistics of the top-performing beef cattle in this week’s ARC Beef Cattle Awards’ supplement to see that the investment is justified. In this regard, Hereford breeders can rest assured that they are receiving value for money from performance measurement (see pg 48). Thanks to careful selection based on performance records, the breed has improved its feed conversion rate. Finishing off a Hereford in a feedlot now requires 5,1kg less feed to attain the same weight as 10 years ago.

But if improved efficiencies are expensive, setting up a new farming operation is even more so. Many readers dream about owning a piece of land one day. Finding the means to afford it is never easy, but so is finding the right piece of land.

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Farmer’s Weekly is currently interviewing a wide range of experts who are in the business of assisting people to buy agricultural land. The findings will be published in the next issue of the magazine.

It was reported during the week that farmers are not the only ones struggling with a lack of capital. Speaking at the PMA Fresh Connections conference recently, Mogala Mamabolo, marketing director at the Department of Agriculture, Forestry and Fisheries, admitted that government did not have the financial means to maintain the country’s 23 fresh produce markets.

He estimated that only five or six of them would survive the next decade.

The sorry state of our electricity infrastructure is well known, but the condition of our water infrastructure has not been so widely publicised. For years, hydrology and engineering professionals have warned of a looming problem, and experts are now saying that water-shedding will soon be on the cards. The reality is that two major metros, eThekwini and Mangaung, are already unable to ensure a reliable water supply and have implemented ‘water-shedding’.

South Africa does not have an abundance of water and what little we have is allowed to literally seep away through the cracks. Again, the problem lies with finances. Municipalities cannot afford qualified engineers and are trying to address the skills shortage by training 15 000 plumbers over the next three years. But it’s abundantly clear that the country’s aging and overstressed water infrastructure requires people who can do more than fix leaking taps.

Government needs money to save money. The question is: where will it come from?