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National Drought Indaba
15-16 Sept 2016
AFASA, AGRISA,
Agriculture sector
© 2015 Agri SA 2
World food security index
© 2015 Agri SA 3
© 2015 Agri SA 4
Number of farming units
0
20000
40000
60000
80000
100000
120000
19
18
19
19
19
20
19
21
19
22
19
23
19
24
19
25
19
26
19
27
19
28
19
29
19
30
19
34
19
35
19
36
19
37
19
38
19
39
19
46
19
47
19
48
19
49
19
50
19
51
19
52
19
53
19
63
19
72
19
76
19
78
19
79
19
80
19
81
19
83
19
85
19
86
19
87
19
88
19
90
19
91
19
92
19
93
19
94
19
95
19
96
20
02
20
07
20
14
*
Num
ber
* Preliminary
NET FARM INCOME 1974/75-2014/15
0.0
20 000.0
40 000.0
60 000.0
80 000.01
97
4/7
5
197
6/7
7
197
8/7
9
198
0/8
1
198
2/8
3
198
4/8
5
198
6/8
7
198
8/8
9
199
0/9
1
199
2/9
3
199
4/9
5
199
6/9
7
199
8/9
9
200
0/0
1
200
2/0
3
200
4/0
5
200
6/0
7
200
8/0
9
201
0/1
1
201
2/1
3
201
4/1
5
Ne
t F
arm
In
co
me (M
illio
n R
an
d)
R77 063 million
(2014/15)
Deregulation and
liberalization of
agric markets in SA
RSA: MAIZE (COMMERCIAL)
AREA PLANTED AND PRODUCTION
1500
2000
2500
3000
3500
4000
4500
5000
0
2000
4000
6000
8000
10000
12000
14000
16000
19
90
/91
19
91
/92
19
92
/93
19
93
/94
19
94
/95
19
95
/96
19
96
/97
1997/9
8
19
98
/99
19
99
/00
20
00
/01
20
01
/02
20
02
/03
20
03
/04
20
04
/05
20
05
/06
20
06
/07
2007/0
8
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
Maize (Ha) Maize(Ton)
‘000 Ton ‘000 Ha
Source: Crop Estimates Committee
South African Agricultural exports and imports,
1990-2014
Source: DAFF
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
55 000
60 000
65 000
70 000
75 000
80 000
85 00019
90
19
91
19
92
19
93
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Agricultural exports
Agricultural imports
Agricultural trade balance
© 2015 Agri SA 9
The turnover of the agriculture sector is approximately
R227 billion per annum with a net tax contributor of
approximately R50 billion in primary agriculture alone
over the past 10 years. We represent 2,5% of the
economy – value addition 20-25%.
We employ more than 850 000 people in the sector and
we are the only food secure country in Sub Saharan
Africa “how do you protect this asset in times of dire
need? You help them”
Agri SA has called for emergency assistance from
government, in either state guarantees or direct
assistance to farmers through the structures of the Land
Bank, Agribusinesses or special purpose vehicles. © 2015 Agri SA 10
National assessment
© 2015 Agri SA 11
Drought – Impact on farmers and economy
Geographic
depiction
NW
24 Jul
2015
N Cape
29 Jan 2016
Extention 18 Mar-
17 Apr 2016
E Cape
• 4 Dec 2015/22 Jan
2016
• 4 Mar 2016 -
Extension – Joe
Gqabi
• Declaration 22 April
GP
LMP
13 Nov
2015
FS
4 Sep 2015
Extension 4 Mar
2016
W Cape
Local
Disaster
Extension
(Central
Karoo) 22 Jul
2016
MP
4 Dec
2015
© 2015 Agri SA 13
© 2015 Agri SA 14
© 2015 Agri SA 15
Drought impact
Commodity Severe Moderate Minimal effect
Maize
Wheat
Oil seeds
- Sunflower
- Soybeans
- Groundnuts
Beef/Sheep/Goats
Poultry
Pork
Game
Ostrich
Wool and mohair
Cotton
Dairy
Other Fruit
Subtropical fruit
Citrus
Table grapes
Wine
Vegetables
Potato
Sugar
Forestry
Tobacco
Agri SA’s efforts
© 2015 Agri SA 16
Media exposure
© 2015 Agri SA 17
Partnerships
© 2015 Agri SA 18
© 2015 Agri SA 19
We must survive
© 2015 Agri SA 20
© 2015 Agri SA 21
© 2015 Agri SA 22
New requirement
© 2015 Agri SA 23
Problem statement
• Country experienced extreme drought conditions in 2015/16 still not having
dissipated
• 8 provinces or parts therefore are still declared disaster areas
• Grazing deteriorated and bleak picture is still prevalent for winter season
• Summer grain production decreased significantly
• Some commercial and emerging farmers face a serious financial predicament
• There is no clarity on government supported disaster measures
• Agricultural employment at risk and employee specific support required
Results of qualitative Analysis done by Agri SA
• 88% of respondents indicated drought conditions worse than normal.
• 94% of respondents reported worse than normal production of commodities.
• 73% pointed out “bad” grazing conditions.
• 56% referred to the limited/bad availability of fodder.
• 50% reported significant rainfall during the last couple of months.
• 86% is expecting worse than normal grazing conditions during winter.
Proposal / Solutions (commercial and emerging sectors)
1.State guarantee scheme aimed at outstanding debt
2.Interest rate subsidy on carryover debt
3.Farmworker support subsidy
4.Interest rate subsidy on new production credit
5.Soft loans aimed at herd rebuilding
6.Emergency measures with regards to water and food relief
Budgetary implications: Summary overall
#
Item
Budgetary implication
for state (Rand)
1 Summer and winter grain and livestock
industries R298 241 007
2 Sugar industry
R214 961 638
3 State guarantee for farmers
( R1 billion )
TOTAL CASH REQUIRED (Y1 – 4)
R 513 202 645
Budgetary implications: Summer grain, Winter grain & Livestock industry
Budgetary
implication for
state (Rand)
1 Subsidizing feed, fodder and water Verification needed
2 Support towards retention of
farmworkers
120,000,000
3 Interest subsidy on production
credit
88,182,207
4 Interest subsidy on carry-over debt
18,763,800
5 Interest subsidy on unpayable term
and bond debt
26,295,000
6 Interest on loans for herd rebuilding
45,000,000
TOTAL
298,241,007.00
Budgetary
implication
for state
(Rand)
1 Support to towards retention of
farmworkers
124,350,000.00
2 Interest subsidy on production debt
21,631,500.00
3 Interest subsidy on production
loans
4,509,574.00
4 Interest subsidy on loans for
replanting
64,470,564.00
Total
214,961,638.00
Sugar industry
© 2015 Agri SA 29
Actions and Accountability
•Responsible institutions
• GOVERNMENT
− Disaster Management Centre's
− Department of Agriculture, Forestry and Fisheries & Treasury
• FINANCIAL INSTITUTIONS
− Commercial banks, IDC, Land Bank, Agricultural businesses
• SURVEYS AND INFORMATION
− All with the support of Agbiz and Agri SA
Actions and Accountability
Accountability
– DAFF provides funding to the Landbank ASAP
– Landbank coordinates relief efforts
– State guarantees via Treasury to commercial banks
Amount received from
Government for support
© 2015 Agri SA 32
© 2015 Agri SA 33
South African Airlines has been sustained by
state guarantees of ±R14.4 billion with an
additional R5 billion from Treasury that was just
approved.
Eskom with state guarantees amounting to R466
billion has reached its "prudency" limit in this
regard.
Lessons learnt
© 2015 Agri SA 34
1. The government is unable to help in case of a natural disaster – we’re
on our own
2. Food security and the production base is not a strategic priority
3. Talk is cheap ….
4. We have to form strategic partnerships with government
5. We need to elevate agriculture to the top of our SA agenda
Lessons
© 2015 Agri SA 35