SA’s drought is costing the agriculture sector billions of rand

The agricultural body that represents nearly 28,000 commercial farmers across the country is calling on the government for financial aid to address the debilitating drought wreaking havoc across the country, which has cost the industry billions of rand.

The industry contributes 2% to the economy, which is projected to grow 0.6% in 2019. It employed about 880,000 people between July and September 2019. Its contribution to the GDP fell from 4.2% in 1996 to 2.4% in 2018, and its value from R50.5bn to R74.2bn over the same period.

SA is the most food-secure country in Southern Africa, with agriculture viewed as the best vehicle to address poverty and revive rural economies, according to agricultural organisation Agri SA.

However, the drought is threatening the livelihoods of SA farmers and their workers as there seems to be no end in sight to the dry spell that has resulted in the deaths of thousands of livestock. Farmers were also behind schedule in planting summer crops including maize, soybeans, sunflower, sorghum and peanuts.

In October, human settlements, water and sanitation minister Lindiwe Sisulu pleaded with South Africans to use water sparingly to avoid the taps running dry, saying a masterplan to address the water crisis will be unveiled soon.

On Tuesday, Agri SA briefed the media on the impact of drought in the sector and the crisis it has had on the rural economy. The briefing was also addressed by Grain SA CEO Jannie de Villiers; Red Meat Producers Organisation CEO Gerhard Schutte; Milk Producers’ Organisation CEO Chris van Dijk; and Wildlife Ranching SA’s Adri Kitshoff-Botha, among others.

Willem Symington, Agri Northern Cape’s disaster management committee chair, said 37.44% of settlements in SA are affected by drought. He said real agriculture output was 9.2% lower in the first half of 2019 than in the corresponding period of 2018.

“The drought conditions of 2013, 2015, 2016 and 2019 have left many maize producers in the North West and parts of the Free State in a very challenging environment,” said Symington. He is not happy that only the Eastern Cape has been declared a disaster area, saying Limpopo and the Western and Northern Capes “should have been declared disaster areas more than a year ago”.

Symington said the sector needs better early warning systems, speedy disaster declarations, and insurance to cover disasters, among other interventions.

Schutte said R16bn has been taken out of the red meat industry in the current year, compared to 2018. “The good news is that, in SA we have adaptable animals in terms of climate change, in spite of this drought we are very competitive. We are 30% below the international norm in producer prices,” he said.

“What also counts in our favour is that we have a well-developed, modern, feedlot industry. [But] we need soft loans, insurance and aid from the government, not only for emerging sector but for commercial sector as well."

Kitshoff-Botha said that in the Northern Cape there has been an 80% loss of total game numbers, while the Eastern Cape recorded 300,000 mortalities, despite reduced herds. She said it will take about three to five years to replenish stocks.

Agri SA executive director Omri van Zyl said the number one priority is for SA to remain a food-secure country. He noted that there is a “humanitarian crisis” in the rural areas as a result of the drought, and that it is difficult to quantify how much the industry has lost to the drought.

The Agri SA drought disaster fund has disbursed R3.4m to Agri Western Cape; R1.3m to Agri Eastern Cape; R4.2m to Agri Northern Cape; R9.9m to other provinces; R100m for other donations for transport, humanitarian and bore-holes; R19m for cash donations; and R1.5m for diesel donations. 

mkentanel@businesslive.co.za