Johannesburg - Inconsistent weather patterns are taking a toll on the agricultural sector, and are likely to lead to damaging consequences for the industry and consumers.
This is according to Ryno du Toit, business development executive at Risk Benefit Solutions. Du Toit notes the weather patterns are already leading to financial losses for the agricultural sector.
Among the woes the sector is facing is a devastating drought, the worst in more than two decades, that has left farms in ruin and affected crop production leading to fears of an imminent hike in food prices and inflation. The drought has pushed many productive farms in Mpumalanga, Free State and North West into despair and forced farmers there to cut back on jobs.
As a result, food prices are on the rise and SA has been forced to import maize, having already brought in more than 750 000 tons.
Du Toit notes the drought, and SA’s lower economic growth - which contracted 1.3 percent in the second quarter - is “extremely concerning”. The agricultural sector declined 17.4 percent quarter-on-quarter and prices are already on the rise with the annual percentage change in producer inflation for agriculture, forestry and fishing moving up to 6.4 percent in July 2015, up from 4.5% in June, driven by the farming sector.
Du Toit notes the agricultural industry is not only an important gross domestic product contributor for South Africa, and also literally feeds the nation and the country’s economy.
“The government's Crop Estimates Committee reported recently that the country’s current maize harvest, a staple food source for millions, is the lowest yield since 2007. Coupled with this shortage, the prolonged dry spells have also reduced grazing land and feeding for livestock.”
According to the South African agricultural industry association, AgriSA, crop production and livestock farming is expected to decrease by 30 percent in 2015, and that the decline could cost farms at least R10 billion. As a result many local farmers are worried about the sustainability of the industry.
Du Toit adds there is a need for government and industry players to collaborate and find a viable, sustainable solution to mitigate risks associated with catastrophes in the sector.
“We need to ensure that the sector that feeds the nation is adequately protected when disaster strikes.”