S.A’s commercial farmers are yet to see funds to fight drought

by Aviwe Mtila 0

With South Africa facing its toughest drought in over a century, CNBC Africa spoke to the Senior Agricultural Economist at ABSA, who warns of extremely high prices to come in the near future, among other issues.

Wessel Lemmer says that the projected crop for maize will be at about 7.2 million tons of maize, which is half the crop from last year. With a lack of support for commercial agriculture, the drought could prove to be a severe blow for South Africa’s ailing economy.

READ THE HIGHLIGHTS FROM THE CONVERSATION BELOW OR WATCH THE VIDEO:

“In terms of the drought specifically, we didn’t see much in terms of support for the commercial agriculture sector. We must also keep in mind that we will only see the real impact during August after the harvest. The crop estimates estimated to crop at about 7.2 million tons for maize. That’s half of the crop that we had last year which is about 14 million tons, so we will need support to keep our production infrastructure in place.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.

“It’s very difficult to make an announcement in the present budget of what the support will be. There is support to small producers which we saw. In terms of commercial agriculture we haven’t seen anything yet.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.

“If you take note of the white maize price, it’s already R1100 a ton above yellow maize prices and yellow maize prices is at import parity level. Prices are extremely high because you don’t have a substitute for white maize, you need to import white maize and there’s not many countries that you can import it from.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.

“We see that the prices will stay elevated for the producer that consumes white maize as it’s a big part of his food basket.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.

“Our economy is a mixed economy so we need to secure our property rights as it’s very important for our free market economy and our democracy. If you look in terms of security or certainty about property rights in our market environment, our market is working. Land reform is important but if you want to exchange land it must be at market value, it must be without any limitations and it must be within the free market environment.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.

“Property rights are one of the largest creators of wealth and if we can ensure that we strengthen our property rights in the investment bill, and other bills that are also in the draft stage, we will increase wealth for our citizens.”

–          Wessel Lemmer, Senior Agricultural Economist at ABSA.