The liquor industry has been left fuming after the government suspended the sale of alcohol. Picture: Courtney Africa/African News Agency(ANA)
The liquor industry has been left fuming after the government suspended the sale of alcohol. Picture: Courtney Africa/African News Agency(ANA)

Alcohol ban putting pressure on agricultural commodities, small scale farmers to be hit hard

By Sandile Mchunu Time of article published Jul 15, 2020

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DURBAN  -  Grain SA said the ban of alcohol sales has put pressure on agricultural commodities and could hit the small scale farmers very hard. 

President Cyril Ramaphosa announced the ban of alcohol sales on Sunday night, with immediate effect, in response to rising Covid-19 infections in the country. 

Grain SA said the ban could have far reaching implications for the industry as farmers experienced an accumulation of raw materials during the first ban on liquor sales due to Covid-19 regulations as some of those raw materials could not be stored for extended periods and also did not have any export opportunities. 

“A second ban only puts more pressure on the system and has far-reaching financial and ecological consequences,” Grain SA said.

Alcohol is produced from raw materials derived from agriculture and produces malt sorghum, malting barley, maize, potatoes and grapes, to name a few, and Grain SA said some of the products are directly dependent on breweries in terms of demand and have far reaching consequences if not processed.

“The second ban on liquor further impacts small-scale producers, who are supported in various programmes by big companies. Not only will producers' access to markets now be reduced due to surpluses, but the risks that support will be discontinued due to financial losses of companies are becoming a reality,” Grain SA said. 

The industry body is worried that quick decisions such as the ban on liquor are being made with direct consequences on crops that were still affected by drought until as early as last year. 

It said South Africa's producers do not have subsidised crop insurance or drought relief programs like competing countries. 

“So a producer can only farm himself out of a difficult financial position, but if the demand is taken away in good production years, the direct effect is the same as a drought, especially with limited export opportunities,” it said.

BUSINESS REPORT 

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