The next five months and the following planting season will be critical for farmers who have been affected by the devastating drought which crippled the agriculture sector recently.
According to agricultural organisation AgriSA CEO Omri van Zyl, farmers need to see out the winter and hope for enough rain to remain out of financial trouble.
“Groundwater levels have been affected, as there has been little to no rainfall, impacting on the cash flow of many farmers and on future production loans, as well as diminishing yields. Livestock farmers are struggling to continue feeding animals, while emerging farmers are struggling to find funding. The sugar industry has been hit very badly, with a large decrease in production. Hopefully, normal rainfall is restored to ensure we keep our production base in place,” he states.
In the most recent drought update published by the Centurion-based organisation in May, it notes that the drought will be exacerbated by the dry winter conditions, especially in the summer-rainfall areas. The update provides the feedback of 30 respondents in various fields of agriculture from provincial affiliates and commodity organisations.
The report notes that there has been herd reduction in provinces, such as the Eastern Cape, Northern Cape and North West, owing to the scarcity of fodder and feed, while grazing has depleted in the Free State.
It adds that in provinces such as Mpumalanga and KwaZulu-Natal, commodity production is currently a “mixed bag” in terms of crop expectations, with sugar cane having taken “a serious knock, owing to limited water availability”, and “grazing . . . under pressure, as fodder prices have also increased”.
With regard to commodities, the report highlights a general decline across sectors, “with stock levels and sales volumes . . . still below normal”. Subtropical products, such as mangos and avocados, have decreased by 15% to 20%, owing to hail storms, while tobacco production is down by 17% because of the drought. Sugar cane production has dropped by 36%, compared with the average production of other years. As a result of high grain prices, milk is produced at a loss, the report notes.
While the South African agriculture sector is indeed experiencing turbulent times, Van Zyl remains optimistic, noting that, from an economic point of view, agriculture remains the most growth-orientated sector.
“I don’t think the mining and manufacturing industries will bounce back in the short term. All the agriculture sector needs is enough rain and some policy stability to regain market traction,” he concludes.