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Ageing SA farmer cohort could prompt food shortages, consolidation – Deloitte

Photo by Bloomberg

Photo by Bloomberg

2nd March 2015

By: Tracy Hancock

Creamer Media Contributing Editor

  

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South Africa could see food shortages in the next ten years as the country’s commercial farmers, with an average age of 62, start to retire and the new crop of farmers entering the sector are unable to fill the void, placing considerable pressure on the nation’s status as a net food producer.

The possible outcome of the country’s ageing commercial farmers was consolidation, however; “even with greater consolidation in the industry, an ageing population with the requisite farming expertise in the agricultural sector will create long-term sustainability challenges,” advised consulting group Deloitte senior associate Omri van Zyl in a statement on Monday.

The average age of a South African farmer was currently considerably higher than the European Union (EU) median age of 55, the US of 58 and Australia 53, data from farming organisation Agri SA revealed.

This was compounded by South Africa’s current chronic electricity shortage and the country being considered semi-arid in most parts, with a 2009 World Bank study estimating that just 11.82% of its 1.2-million square kilometers of land was arable.

Agri SA data further indicated that South Africa had 120 000 farmers in 1994 compared with 37 000 farmers at present. “This dwindling population of commercial farmers supports a population of over 50-million people, of which only 45.6% are considered food secure,” stressed Deloitte.

Further, agriculture’s contribution to South Africa’s gross domestic product had declined from more than 6% in 1980 to less than 3% in 2013, according to the Department of Agriculture, Forestry and Fisheries.

The production of staple agricultural commodities had also decreased in favour of more expensive, luxury food items that were destined for the export market, while stiff competition was faced from cheap subsidised foreign imports, with South Africa’s poultry purchases from the EU and Brazil having doubled between 2008 and 2012.

Van Zyl explained that poor access to finance and a lack of interest from the younger generation were impeding new entrants replacement of the country’s commercial farmers, who were crucial to the supply of white maize to many of South Africa’s neighbours.

“The majority of young graduates aren’t particularly interested in farming – they want desk jobs in air-conditioned offices with medical aid and a pension,” he stated.

Van Zyl noted that young black farmers in particular were also not getting the requisite financial backing from government or the private financial sector.

He added that, nonetheless, South Africa had by far the most sophisticated and advanced agricultural sector on the continent and the country not only fed itself, but also a large swathe of sub-Saharan Africa.

Therefore, the “demographic time bomb” facing the country’s farming population also had implications for the rest of Africa, which was currently estimated to possess 65% of the world’s uncultivated arable land. But, economists forecast that its population would grow by another one-billion people by 2050, putting further pressure on food security.

Edited by Creamer Media Reporter

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