How long can SA’s farm­ers last?

Farmer's Weekly (South Africa) - - From The Editor - Denene Eras­mus Editor FW

South Africa is not an easy place to farm. Even if you ig­nore the threat posed by rad­i­cal land re­form, most farm­ers in this coun­try still have to con­tend with rel­a­tively poor-qual­ity soils, er­ratic rain­fall that leads to fre­quent droughts, tough com­pe­ti­tion from coun­tries that have better pro­duc­tion con­di­tions and state sup­port, and the dev­as­tat­ing im­pact of crime on their busi­nesses and fam­i­lies. De­spite th­ese is­sues, the South African agri­cul­ture sec­tor has per­formed well over re­cent years.

In its re­port, ‘Agri­cul­ture, Land Re­form and Jobs: Can South Africa make this work?’, the Cen­tre for De­vel­op­ment and En­ter­prise writes that the agri­cul­ture sec­tor has grown con­sis­tently at an av­er­age an­nual rate of 2,5% in real terms from 2006 to 2015.

The five-year av­er­age growth in gross value added (GVA) since 2013 for the cot­ton and cit­rus in­dus­tries has been around 20%, while the growth in the soya bean, de­cid­u­ous fruit and sub­trop­i­cal fruit in­dus­tries was about 15%, ac­cord­ing to the lat­est Agri­cul­tural Base­line Out­look Re­port by the Bureau for Food and Agri­cul­tural Pol­icy (BFAP).

How­ever, re­cent events have re­vealed that de­spite the re­silience the farm­ing sec­tor has demon­strated over the past decade, the sys­tem is grow­ing frag­ile due to the mul­ti­ple shocks it has to ab­sorb. In the sec­ond quar­ter of 2018, agri­cul­tural GDP dropped al­most 30% as the ef­fect of the pre­vi­ous sea­son’s drought be­came ap­par­ent across all agri in­dus­tries. More­over, the BFAP re­port says that many larger in­dus­tries, such as grain and sugar, have not grown suf­fi­ciently to out­pace in­fla­tion over the past five years.

Mean­while, South Africa’s farm debt reached its high­est level ever in 2016 when it in­creased to R145 bil­lion, and it has since in­creased fur­ther to roughly

R160 bil­lion. Ear­lier this year it was re­ported that the value of farm­land in cer­tain ar­eas had de­creased 30%. BFAP cal­cu­lates that if prop­erty rights con­tinue to weaken, lower in­vest­ment lev­els could re­sult in a 40% de­cline in ex­ports for some in­dus­tries, with a re­lated 30% drop in em­ploy­ment over five or six years.

Many farm­ers in South Africa are still do­ing re­mark­ably well, es­pe­cially those who pro­duce high-value ex­port crops, but there are just as many who are suf­fer­ing. For some, the losses suf­fered dur­ing the re­cent drought have been too vast to over­come. Those chal­lenges that are fre­quently less re­ported on need to be ur­gently ad­dressed to en­sure that the farm­ing sec­tor will re­main as ro­bust as it has been up un­til now, ac­cord­ing to Prof Ferdi Meyer, director of BFAP. Th­ese chal­lenges in­clude the con­struc­tion of more wa­ter in­fra­struc­ture to ar­rest the se­ri­ous de­cline in the pro­vi­sion of ad­e­quate, qual­ity wa­ter to ru­ral ar­eas; fast in­ter­ven­tion to re­verse the col­lapse of mu­nic­i­pal­i­ties and the ser­vices they need to sup­ply to farm­ing com­mu­ni­ties; and open­ing more ex­port mar­kets to ab­sorb the in­crease in pro­duc­tion of high-value pro­duce.

Let’s not take the re­silience of South Africa’s farm­ers and agri sec­tor for granted!

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