Despondency in agri sector

Confidence in SA’s agricultural industry declined to the lowest in nine years in the fourth quarter as businesses in the sector grew more concerned about weather conditions and as the lack of clarity around land-reform policy clouded sentiment.

The Agribusiness Confidence Index dropped to 42 from 48 in the previous three months, Pretoria-based Agricultural Business Chamber and the Industrial Development Corporation said. That is the lowest since the final quarter of 2009.

A panel of lawmakers resolved the constitution needed to be changed to make it easier to seize land without paying for it.

The potential erosion of property rights and fears of a Zimbabwe-style land grab have added to negative sentiment and compounded a selloff in SA assets.

“There is despondency in the sector,” said Wandile Sihlobo, head of research at the chamber. “Any reckless move in policy which might undermine property rights could dent investment and longrun growth prospects in the sector.”

White maize is planted from October to January. “The drier weather conditions cited by some respondents as a key challenge could soon change as the weather service indicated there is a good chance for above-normal rainfall between December and February,” he said. – Bloomberg