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Agricultural sector in the country to lobby for budget allocations

The agricultural sector’s priority now is to lobby the government to reprioritise budgets to invest in repairing road infrastructure and bridges that were damaged by rainfall and flooding that wreaked havoc in many parts of South Africa, according to Andrea Campher, Agri SA’s manager for risk and disaster unit. Picture: Antoine de Ras

The agricultural sector’s priority now is to lobby the government to reprioritise budgets to invest in repairing road infrastructure and bridges that were damaged by rainfall and flooding that wreaked havoc in many parts of South Africa, according to Andrea Campher, Agri SA’s manager for risk and disaster unit. Picture: Antoine de Ras

Published Jan 27, 2022

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THE agricultural sector’s priority now is to lobby the government to reprioritise budgets to invest in repairing road infrastructure and bridges that were damaged by rainfall and flooding that wreaked havoc in many parts of South Africa, according to Andrea Campher, Agri SA’s manager for risk and disaster unit.

The affected local and provincial departments should reprioritise funds in that regard and where those monies were not available, applications should be made to the national government, she said.

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The industry body said that it was still assessing the extent of the damage to agriculture through its commodity and provincial affiliates. The provincial departments of agriculture as well as the provincial disaster management centres were also assessing the damages within each province.

Campher said the exact crop losses would be known at the end of the harvest season.

“However, there is a wide consensus that road infrastructure and bridges are severely damaged,” she said.

Agri SA said yields could come in lower for certain districts, but the organisation was waiting to hear from the Crop Estimates Committee.

“Some commodities have been significantly compromised like tomatoes hence we are seeing prices increase in the short term. National food security is not being compromised by this flooding as it only affected certain districts,” Campher said.

In the Agricultural Business Chamber’s (Agbiz) weekly Agricultural Market Viewpoint, the organisation’s chief economist, Wandile Sihlobo, said that besides from the locusts infestation in parts of the Northern and Eastern Cape and threatening the grazing veld, the major concern for much of South Africa had been the excessive rains.

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At the start of the 2021/22 production season in October last year, farmers were optimistic and planned to lift their area plantings to summer crops by 3 percent year-on-year to 4.3 million hectares in the 2021/22 production season.

This comprised maize, sunflower seed, soyabeans, ground nuts, sorghum and dry beans, he said. This came despite initial fears that the rising input costs of fertiliser and agrochemicals would potentially discourage plantings.

These overall price increases were on the back of supply constraints and disruptions in production lines in major global fertiliser and agrochemical producing countries like China, India, the US, Russia, and Canada. The higher shipping costs and oil prices also contributed to these price surges, along with firmer global demand from an expanding agricultural sector.

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According to Sihlobo, this meant that South African farmers incurred higher costs in the 2021/22 season with the hope that a favourable weather outlook and higher commodity prices would be financially rewarding.

“But as we have now observed, the excessive rains delayed plantings in some regions, and in others, damaged the crops. This means that the 2021/22 season could be a financially costly year for farmers that experience losses in yields due to floods,” he said.

The data released by Statistics South Africa last week showed that consumer food price inflation slowed marginally to 5.9 percent in December last year from 6.0 percent in November. This slight moderation was in bread, cereals, and fish products. For the whole of 2021, the consumer food price inflation averaged 6.5 percent (compared with 4.6 percent y/y in 2020). Broadly, the high grains, vegetable oils and meat for the past few months were the primary drivers of consumer food price inflation in 2021.

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According to Agbiz, while the excessive rains across South Africa presented risks for agricultural production this year, the overall impact on crop prices remained uncertain.

“First, there have admittedly been delays in crop plantings and damages in some areas due to flooding. Still, the scale of this disruption will only be precise after the release of the preliminary summer crop planting data on January 27 and production estimates data at the end of February. Only then could we formulate a reliable view on the possible size of imports needed if the damage is extensive, and impact after that on prices.”

He said that the increases in domestic agricultural commodity prices have primarily been underpinned by global prices over the past two years. The size of the domestic harvest mattered less than the crop conditions in South America or grains and oilseeds demand in China and India, which were primary drivers of the global market.

“These factors were said to have provided upward pressure on global grains and oilseeds prices. South Africa, a relatively small player in global agriculture, was linked to the global market, thus, the general rise in global prices overshadowed the improved domestic crop supply in the 2020/21 production season.”

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