Trouble in SA’s farming sector as drought bites

South Africa’s farm production drops by a record figure as the drought bites deep into the country’s economy.

Durban - Production on South Africa’s farms has dropped by a record figure as the drought bites deep into the country’s economy.

In the preliminary estimates of real gross domestic product (GDP) released by Stats SA yesterday, the contribution of the farming sector to the economy shrank by 8.4% in 2015. This is the largest annual fall in agriculture production since 1995. In the report, the country’s economy grew by 1.3% in 2015, down from 1.5% in 2014 and 2.2% in 2013.

Read: Drought takes toll on SA breeding stock

Sandy la Marque, chief executive of the KwaZulu-Natal commercial agriculture union, Kwanalu, said the fall was no surprise. “The biggest contributor is the drought. But we must take into account that there are 26 000 additional land claims lodged in this province since the reopening of the claims process last year. That’s on top of the 2 000 that have yet to be settled from the first round of claims,” she said.

La Marque said exploration licences for gas and coal exploration over vast tracts of land in KZN were further destabilising the sector.

Commenting on the R15 billion drought relief announced in the national budget by Finance Minister Pravin Gordhan last week, senior economist at AgriSA Thabi Nkosi said the announcement lacked detail on workable relief programmes. “We need to hear how the government plans to protect farmworkers.”

She said at least 37 000 farmworkers had lost their jobs because of the drought.

While neither the national or provincial agriculture departments responded to written questions from The Mercury, agriculture economist, Ferdi Meyer said the economic impact of the drought would play out in three “thresholds”.

Relief

“The first impact we have seen is on the summer crops. Little maize was planted and yields are down. The second threshold is if we don’t get rain soon. So far the drought has resulted in a reduction of about 8% of the national beef herd which is not bad. Farmers made a plan and instead of planting cash crops in the spring they planted fodder for their stock.

“But that has come to an end now. So we will see a severe increase in the slaughtering of stock. Meat prices will probably come down mid-year, but by the end of 2017 and early 2018 there will be a shortage of meat,” he said.

The third threshold, he said, depended on how quickly farmers could swing into production when the rains eventually did arrive and on the severity of water quotas until then. “When farmers have to cut down on their irrigation we will start to lose fruit orchards,” he said.

Alluding to the drought relief, Meyer said while it was understood the government could not allocate money it did not have for drought relief, talks with commercial banks to extend loans to farmers and a government-subsidised drought insurance were workable solutions.

colleen.dardagan@inl.co.za

THE MERCURY