Farmers in the Northern Cape and North West are experiencing the worst drought they have seen in more than 80 years. It has carried on for three years but one hardly reads anything about it.
In fact this catastrophic event, the worst since 1933 according to farmers, has had coverage only since the start of this year.
Cattle and sheep farmers in these areas are selling most of their stock at reduced prices since they cannot keep livestock that they are not able to feed.
According to Cor Jansen van Vuuren, the president of Agri North West, farmers in his province, especially emerging farmers, have disposed of 50 percent of their cattle and sheep since February last year.
If they do not get rains in the current rainy season, which ends at the end of April, the farmers say they will have to take the decisions they have been avoiding. Their income has been cut by half along with their production.
Van Vuuren said on his farms, for instance, there were workers supporting as many as 15 people on their salaries. Getting feed for the livestock has never been more critical – not only for farmers to curb their losses but also to curb the “social losses” that the displacement of the farmworkers would cause.
The farmers said what upset them was that, although the droughts had continued for three years, the government had not provided any support. They said if the government could assist with transport costs, it would make a lot of difference.
North West, for instance, has spent just R1.5 million to transport feed. The work to collect donated feed from Western Cape farmers began in December. Transportation had been their major stumbling block but they have finally arranged transport with Transnet Freight Rail. page 20
Kagiso Tiso
Kagiso Tiso Holdings (KTH) has been a torch bearer and pioneer in black economic empowerment. Yesterday it announced it was venturing into offshore investment in the rest of Africa by acquiring an equity stake in a Ghanaian bank.
This is heartening because the rest of the continent is becoming a trampling ground of white capital. Just this week, Shoprite announced in its results that most of its earnings came from outside South Africa.
KTH said it had formally signed a minority equity investment in Fidelity Bank Ghana. In addition to this, KTH had also subscribed for convertible preference shares, which on conversion would increase its stake over time.
It said its total investment in Fidelity was about $35 million (R376m), through the combined instruments. The investment is subject to the approval of the Bank of Ghana and completion of conditions precedent.
Jacob Hinson, the chief investment officer at KTH, said after the merger of Kagiso Trust Investments and the Tiso Group, the emerging KTH had wanted to expand into east and west Africa.
He said another motivation was that some companies in KTH’s investment portfolio wanted to increase their exposure in these two regions.
“East and west Africa are mainly English-speaking, they have an ease of doing business and political stability,” he said.
KTH is South Africa’s pre-eminent black-owned and managed investment holding company and boasts a diverse investment portfolio, with stakes in market-leading companies across key sectors, including media and ICT, financial services, resources, power and industrials.
KTH’s shareholders include two charitable institutions, Kagiso Trust and the Tiso Foundation, which together own about 46 percent.
Fidelity was created in 1998 as a discount house to provide investment products and services to both private and institutional customers. It was issued with a universal banking licence in 2006, with the ambition to create a world-class commercial bank.
Chicken
There is a subtle yet noticeable disagreement on the issue of brining between the umbrella organisation of chicken producers, the SA Poultry Association, and some of its members.
Yesterday one chicken producer, Afgri, said it supported the 15 percent cap on brine in individually quick frozen (IQF) portions and the 10 percent brine limit on whole birds. Its carefully argued response to the Department of Agriculture, Forestry and Fisheries proposal to reduce maximum brining levels to 15 percent comes after the poultry association asked for the regulation to be scrutinised further.
The association said while it generally welcomed the decision to regulate the level of brine in frozen chicken, it found that there were a number of unintentional errors and possible consequences that could negatively affect consumers.
It said unfortunately the brining regulations were neither sufficiently comprehensive nor technically correct. However, Afgri believed that the maximum brining levels suggested were ethical, fair, reasonable and scientifically justifiable.
“It is an opportunity to provide clear guidance to the industry and it will level the playing field for all suppliers of poultry products in South Africa. A cap will eliminate the competitive pressure to up the brining levels that has been of concern,” the managing director of Afgri, Izaak Breitenbach, said.
The only thing that these two sides agree on is that putting the brining regulation into practice will have consequences. Breitenbach said it was the consequences of the brining cap that needed to be dealt with in order to avoid negative effects on the consumer and the producer.
The association agreed, saying that less brining bore the risk of making chicken, which is the main source of protein for South Africans, less affordable.
Afgri estimates that the net effect of capping could add 15 percent to the price of some frozen chicken cuts.
Edited by Peter DeIonno. With contributions from Londiwe Buthelezi, Wiseman Khuzwayo and Nompumelelo
Magwaza.