Founder: Turnaround Talk
Given the rainy season that we are in the middle of, those of us living in Gauteng (more specifically Johannesburg and Pretoria) are struggling to reconcile the fact that two years ago, most of the country faced a dire drought situation. Key dams such as the Vaal and Gariep dams were only 30% full at the height of the drought.
At the time, the drought put the industry in significant financial distress. The weather situation has completely turned around with the country facing La Niña conditions. Several videos of overflowing conditions at the Vaal and Gariep dams are easily found on social media. Driving down to Durban during the festive season, many of the rivers on the route (some of which are seasonal rivers) were close to bursting their banks.
While the rain is always welcome, the amount of rain that we have received has also placed farmers in financial distress. Additionally, farmers in KZN also faced significant pressure following last year’s July unrest.
Farmers face millions of Rands in loses
According to an article by the Natal Witness, the South African Farmers Development Association (SAFDA) said on Friday the trail of destruction left by the rain could trigger hikes in food prices.
The association has members around the province, including in areas around Pietermaritzburg. Emerging farmers in the Midlands said the heavy rains have cost them their crops.
the Witness article points out that Londiwe Chiburi, who grows vegetables along the R617 just beyond Mpophomeni said her potatoes had mostly rotted. “I was supposed to harvest the potatoes and supply them to Estcourt, but at the moment there’s nothing to harvest. They are all gone,” she said.
She added she’s currently waiting for her advisor from the department of agriculture to tell her what the way forward is, but at this point she’s hoping for less rain.
the article adds that another emerging farmer, Nhlakanipho Nzimande, said he was planning on harvesting his potatoes next month but everything was destroyed.
Fuzz Goble, of the Triandra Farm in Karkloof outside Howick, grows maize and has a dairy farm.
He said crops were lacking sunshine. “The growth rate of maize is poor because of the lack of sunlight. We are also struggling to get tractors into some of the fields. We had to abandon some of our fields that were waterlogged,” said Goble.
Photo By: ecr.co.za
He said the heavy rains were also making it difficult to move cattle around the farm.
The Witness article points out that, SAFDA CEO, Dr Siyabonga Madlala, said damage to his 200-hectare farm in Gingindlovu (21 km south-east of Eshowe) ran into millions of rands.
Madlala said that the association had not calculated the total cost in damages as they were still in the process of assessing the damage.
the article adds that, on his 200-hectare farm, Madlala spends R4 000 on fertiliser for each hectare.
“The fertiliser that was already sprinkled in the fields has been washed away, and that cost me around R800 000 excluding diesel costs and labour that went into sprinkling the fertiliser on the fields. These are unexpected costs, and they will escalate because now the weeds will overtake the crops and herbicide sprays will have to be re-done,” he said.
The big challenge was that fertiliser prices have just gone up; diesel prices have also gone up and the hail has made things worse for the farming community.
Unrest challenges
In July 2021, South Africa faced a month of civil unrest and heavy looting that was predominantly centred on KwaZulu-Natal and Gauteng. This unrest had a significant impact on farmers in KwaZulu- Natal.
According to an article by the Natal Witness, a staggering 1 772 hectares of plantation was lost due to fires that had been deliberately started during July’s civil unrest in KwaZulu-Natal.
“Every single commodity (sugar, dairy, poultry and bananas) was affected in one form or another,” Sandy la Marque, CEO of KwaZulu-Natal Agricultural Union (Kwanalu) told the Witness.
The article adds that the total direct and indirect losses suffered by the forestry sector is estimated to be around R656 million. This is according to research done by Kwanalu.
Speaking during an agricultural seminar on lessons learnt from the unrest, La Marque said during the unrest the organisation conducted real time research from 110 farm leaders to determine the extent of the damage to farms, rural towns and their surrounding communities. She said the figures were “staggering” and “concerning”.
Photo By: IFP
Adrian Chaning-Pearce, a cane grower in Pongolo, said they lost about 42 hectares worth of plantation due to fire which borders the communal areas.
The Witness article points out that, as a result of trucks not being able to enter the area, RCL Sugar Factory was closed for over a week, which affected a lot of farmers. “The entire community is built and survives around the sugar mill. The burnt cane could not be taken to the mill so the quality suffered. This means we [now] have rely on the mill remaining open in late December to get our crop in when the summer rains have arrived and the quality drops off,” he said.
Another article from News24 points out that the July unrest cost Tongaat Hulett R158 million. The sugar producer said the unrest resulted in a loss of business of about R158 million, due to lost production capacity and cane arson fires.
“In addition, R38 million was lost through the looting of sugar in a third-party warehouse. The third-party has been invoiced for the recovery thereof, with R12 million having been received in November 2021,” said the company in its results statement which was released in September 2021.
The role of BRPs
As with any country, the survival of the farming industry is of national importance. Turning around this industry will take a lot of time, effort and specific expertise.
How do BRPs go about turning around farms that are in financial distress? Largescale farmers will no doubt have experienced these weather conditions before and have a financial buffer to ride out the economic conditions that they currently face. How do medium sized and small scale farmers achieve this?
Finance will need to be sourced to overcome the negative economic impact felt by the rains and the July unrest. This financial will need to be spread across replanting and harvesting whatever crop they can as well as addressing the infrastructure damage caused by storms and the July unrest.
Production and sales strategies will need to be addressed to salvage some of the economic value that the current crop can provide. Finally, export challenges will need to be addressed as the global supply chain crisis worsens.
