The two sides to a storm


Johannesburg - While grain farmers celebrate the country-wide heavy rains, the same can’t be said about the provincial government departments in the northern parts of the country, which may have to redirect some funds to reconstruct roads and dams damaged by the deluge.

Limpopo, North West and parts of Gauteng have experienced the heaviest rains in 14 years. The rains have not only damaged infrastructure, but have hurt economic productivity due to the road disruptions.

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The road ahead of the agriculture sector in 2014  should be smooth, however,  agribusinesses should expect  a few bumps along the way coming  from possible labour unrest and  uncertainty surrounding the issue of  land supplied 787Low-lying roads in Freedom Park near Eldorado Park were flooded as rain persisted on Wednesday morning. 	Photo: Timothy Bernard.

Johannesburg had experienced 113 millimetres of rain in the first 10 days of this month, the SA Weather Service said last week.

In some parts of the country, the flooding left 11 people dead. However, grain farmers said with the rain, the future of maize stock and cattle farming looked bright.

On the contrary, persistent heavy rains in the northern parts of the country have caused a headache for state-owned power utility Eskom.

Earlier this month, Eskom implemented a load-shedding programme saying energy production had been disrupted by wet coal. Economists had warned that should Eskom continue with the load-shedding programme, this could cut back the country’s gross domestic product (GDP) by 0.7 percentage point to 1 percentage point, leaving GDP at 1.5 percent to 1.8 percent growth.

In his Budget speech last month, Finance Minister Pravin Gordhan forecast GDP growth of 2.7 percent for this year.

The latest Absa Trend market analysis for last month suggested that the maize crop was much higher than last year’s figures. The provinces that showed the highest improvements were Free State and North West province.

The report said this came as a surprise because these two provinces were in the grip of a severe drought at the beginning of the planting season.

“It seems that the widespread rain has come just in time to rescue the farmers,” the report said.

There were almost 120 000 hectares less maize planted this season, but the crop is estimated to be 6 percent higher.

Thys Grobbelaar, an analyst at agribusiness Senwes, said with regards to the 2013/14 marketing year that maize stock would be limited. This was due to the drought experienced earlier in the year and also to the high number of exports to international countries and drought-stricken Zimbabwe.

“Maize exports to Zimbabwe could be one of the main reasons why our maize stock is so low because they also experienced drought and could only import maize from South Africa because of the export ban from other neighbouring countries,” Grobbelaar said.

This has also pushed up the maize price for March to R3 350 a ton. However, the 2014/15 marketing year for maize stock, which starts in May, will be a positive one.

“Because of the good rain we are expecting a very, very good crop, which could lower [the] maize price in the second-half of the year.”

Maize stock was expected to be more than 1.2 million tons between June and July. However, farmers in North West are still counting their losses after experiencing three years of drought. With little support from the local and national government, cattle and sheep farmers had to sell their stock at reduced prices since they could not keep it alive.

Cor Jansen van Vuuren, the president of Agri North West, said farmers had lost hope and had lost a lot of money and some livestock because of the drought.

“The drought was a disaster. It was something we had not experienced since 40 years ago, it was horrible.”

He added that the cattle and sheep farmers were the most affected because they did not have feed for the livestock.

Cattle and sheep farmers had to sell at least 50 percent of their stock in order to survive the drought.

Van Vuuren said two weeks after it started to rain, cattle could graze the land. “This is a blessing from [the] heavens; actually it is a miracle.”

The drought levels in the North West had reached a disaster state with farmers receiving some relief from farmers in the Western Cape and other parts of the country.

“The recent rain has changed the grains dramatically. We are expecting a good harvest,” Van Vuuren added.

Farmers and Eskom were not the only ones affected by the rain. The freight unit of Transnet reported that about 10 percent of its train schedule was affected by bad weather conditions because of washaways and temporary closures.

Christie Viljoen, an economist at NKC Independent Economists, did not think that there would be additional money spent in fixing the damaged infrastructure, but said funds would definitely be diverted. “Maybe some emergency funds would be released but provincial or municipal departments would rather move money around from other uses to fixing roads and bridges.”

According to his observations, the recent rains would not have that much of an impact on the government or even boost the construction sector, because the rain affected certain geographical areas. “More than half of the country is still going on as usual.”

He added that the next maize crop was probably going to be good.

“At the moment the prices are very high because the previous crop stock was low because we exported a lot and the local currency was weak,” he said.

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