In a statement, Dalrrd said the recent Crop Estimates Committee (CEC) showed that South Africa’s 2023/24 summer grains and oilseed production could fall by 21% year-on-year to 15.2 million tons. Photo: Simphiwe Mbokazi Independent Newspapers
THE Department of Agriculture, Land Reform and Rural Development (Dalrrd) said yesterday that it was assessing the severity of the El Niño-induced drought and its impact on crop yields and financial status on farmers.
This was as Zimbabwe declared a state of disaster on Wednesday over a devastating drought that is sweeping across much of southern Africa with the country’s government saying it needed $2 billion (R37bn) for humanitarian assistance.
In a statement, Dalrrd said the recent Crop Estimates Committee (CEC) showed that South Africa’s 2023/24 summer grains and oilseed production could fall by 21% year-on-year to 15.2 million tons.
“This will still be sufficient for domestic needs, but the neighbouring countries in the regions have been hit hard and may experience food insecurity.
“There are also emerging feed challenges for the livestock farmers. Fortunately, the vegetables and fruit supplies are reasonably decent, and prices should be moderate in the near future,” it said.
Dalrrd spokesperson Reggie Ngcobo said the department had also briefed the Cabinet about the difficulties presented by the drought and some measures were being considered to mitigate the impact and also to ensure the business continuity of farmers.
“The minister will soon meet with leaders of organised agriculture, relevant departments and MECs from all provinces to assess the scale of the full impact in various regions. This insight will help refine the government’s response approach to the drought,” Ngcobo said.
Corné Louw, Grain SA’s senior economist, told Business Report yesterday that some producers would be under severe financial strain after this season due to the drought.
“Some will struggle to make it to the next season. Margins are very tight, therefore, to recover from such an event will take long,” Louw said.
Grain SA’s expectations, with some highlights of the second production estimate released last month, was that South Africa had 1.15 million tons of white maize available for export.
The BLNS (Botswana, Lesotho, Namibia and eSwatini) countries might have to import more maize due to the drought prevailing there, it said. The expectation was that the neighbouring countries might need to import more than the available 1.15 million tons to satisfy their local consumption
South Africa had enough yellow maize currently for local consumption sufficient at this stage, with no deep sea export programme expected for the season.
Soya beans were down by 15% from the first estimate last month, and down 34% from last year. The expectation was to crush 200 000 tons less, which would be replaced with oil cake imports to the coastal areas. No soya bean exports were expected.
Professor Johann Kirsten, a director for the Bureau for Economic Research (BER), said the major issue for the upcoming government and agricultural producers would be how to deal with the production debt that many farmers had incurred to plant the current crop.
“Some agreement with financial institutions in terms of carry-over debt and interest-free carry for a year should be considered on a case-by-case basis following the end of the harvest season.
“It is also important that ‘revenue insurance’ products are quickly implemented by insurance companies to cover the debt exposure of farmers in this increasingly volatile climatic environment,” Kirsten said.
Wandile Sihlobo, the chief economist at the Agricultural Business Chamber, said there should not be any interventions in the market, such as a temporary ban on exports or price caps on commodities.
“The interventions should primarily be at supporting production and cushioning farmers, but not in market interference,” Sihlobo said.
BUSINESS REPORT