Huge drought bailout required

Up to R20bn needed as experts warn maize supply crisis worsening THE crisis affecting agriculture in South Africa deepened yesterday with developments on three fronts. The developments are:

• Agri SA saying that a record R15-billion to R20-billion could be needed to see farmers through the worst drought since 1992;
• The Reserve Bank expressing concern about the effect of the drought on food-price pressures on inflation: and
• A producer warning that estimates for the amount of maize that may need to be imported – already standing at up to four million tons – would increase the longer the drought continued.

Agri SA executive director Omri van Zyl said the situation continued to be dire and there was now a need for humanitarian assistance. “Farmers are battling a pretty serious situation, one that will have national consequences,” Van Zyl said. “A lack of intervention could compound the economic and social effect on farmers and the country.” Van Zyl said Agri SA was already seeking donations after helping to establish a drought fund while also exploring commercial means to ensure that farmers had access to credit that would allow for planting when more favourable conditions returned. The organisation was also participating in a task team to formulate a report that could inform further talks. In 1992, farmers needed R3-billion to get through the drought, but between R15-billion and R20-billion in real terms might be required now, Van Zyl said. In November, the government added R96.6-million to R352.6million already set aside to support drought relief.

The additional funding was due to be used to purchase 45 tankers for water distribution to affected areas, borehole drilling and rehabilitation and water conservation, among other activities. Meanwhile, Grain SA chief Jannie de Villiers said the hardest-hit drought areas were in the northern Free State, where many farmers had not planted yet. That meant they had missed the last real opportunity and ran the risk of not being paid out by insurance companies. He believed up to five billion tons of maize would have to be imported, but questioned whether port facilities in South African would be able to handle that volume. Such facilities would include grain elevators to move imports and storage sites‚ which risked being overwhelmed. De Villiers said the other problem was sourcing white maize as many world producers grew yellow maize. The South African white maize price doubled last year and it briefly hit a historic high of R4 952 a ton yesterday on De Villiers’s comments before falling 0.5% at R4 875 a ton. Adding further to worries in agriculture is that banana production is being affected by labour unrest. About 3 000 workers have been on strike at the Mbaba Estates banana farm in Mpumalanga since November 4. They have been demanding recognition as part of the Food and Allied Workers’ Union. Cosatu said yesterday it would be seeking a meeting with Mpumalanga premier David Mabuza regarding police conduct in a protest during which, the federation said, nine farm workers were arrested and dozens injured. Police said they had not been made aware of any allegations of brutality. – Additional reporting by Reuters