Date: 02/12/2004
Source: Western Cape Provincial Government
Title: Dowry: Western Cape Adjustment Appropriation Bill
Speech by Cobus Dowry, Western Cape Minister of Agriculture, Adjustment Appropriation Bill
The only addition in the agricultural budget which I want to highlight is the R9 million that the dept received from the national Dept of Agriculture as a conditional grant for drought relief, of which, R1 million must be utilised for the sinking of boreholes in drought stricken areas in the province. Although we are grateful for these funds it is clearly not sufficient to address the plight of our farmers in these areas. During a visit to the Piketberg/Eendekuil area recently as part of my ongoing monitoring of the drought situation, I witnessed failed crops and I spoke to affected farmers. One cannot but feel empathy for these farmers. Unfortunately empathy alone will not address the disastrous effects of the drought, not only to farmers but also to the rural community and the economy of the province as a whole.
This disaster we are facing as a result of the drought has already started in the 2003/2004 season and escalated drastically in the 2004/2005 season, which has just come to an end for our grain producers. The two seasons of drought is the worst that has ever been experienced by farmers in the area of Piketberg, Porterville, Eendekuil and further north (commonly known as the Rooi Karoo).
The effect of the 2004/2005 season is worse than the previous 2003/2004 season. During the present season, farmers spent more on production costs than in the previous one because of the untimely rains during the sowing/-planting season. The dry conditions forced most farmers to wait until the last minute before they started with their sowing activities.
A normal yield in the Boland agri area is ±140 000 tons. In 2003/2004 only 58 000 tons were harvested and this year only 51 408 tons were produced.
During 2003/2004 65 000 hectares were planted, this year 75 000 were planted in the Rooi Karoo area. It is estimated that the break-even yield should be 2.5 tons per hectare. During 2003/2004 the average yield was 0.97 tons per hectare. This season produced a yield of 0.90 tons per hectare.
In a normal year there are about 230 producers that sow wheat. This year 205 took part and eventually only 150 harvested. Of the 75 000 hectares that were planted 25 000 hectares did not produce one wheat germ.
Poor yields in crops can only be attributed to the extreme weather conditions. In my deliberations with banks and co-ops it is evident that the farmers cannot be blamed for the poor and well below average yields.
The Department, through its extension offices assures me that farmers in these areas are making use of best practice with regard to their farming activities.
Financial impact:
After the bad crop of 2003/2005 a carry-over debt of R32 million existed, which was reduced to R16 million before the start of the new season mainly to the conciliation of debt and the sale of livestock. It is estimated that with the debt incurred through higher and extra production costs, this figure would increase with a further R50 million totalling R66 million.
The total effect of this means that farmers will not be in a position to obtain any future finance towards production costs for the 2005/2006 season resulting in many farmers not being able to put one grain of wheat into the ground at the start of the next season. The impact of this on the total rural community, from producers, to farm labourers, to entire towns, means that we will have ghost towns with many thousands of farm labourers and other employers in businesses that will be laid off. The estimated direct impact on farm workers will be the loss of more than one third of the jobs of the estimated 3000 workers who are employed by wheat farmers in this area.
Speaker in an effort to deal with this matter on a broad as possible front I have engaged in talks with commercial banks during October and will be meeting with representatives of commercial banks and co-ops on Monday in an effort to address the effect of the drought on farmers. It is already evident that there are a number of farmers who will not be in a position to carry on farming and some are already selling implements and possessions in an effort to survive. The next step will be farms that will come up for sale under negative conditions.
Speaker
I say it at every possible occasion, and I have to say it here. If we want to succeed in our land reform and empowerment programs in agriculture, we cannot hope to settle new farmers under bad conditions and on farms that are not economically viable and think we have achieved our goals. We will just lead them further into a poverty trap and it will be criminal of us to expose them to such conditions and expect them to make a success of farming.
Speaker
At the launch of the Proudly South African campaign, President Thabo Mbeki said the following, and I quote: "This campaign is vital for our economic growth and I call on every South African Company to join and support its activities". This also means that it is time for the business sector to realise that they have a roll to play in the agricultural sector that forms the backbone of the economy of the Western Cape. There are quite a number of up and down stream players that are making major profits at the expense of farmers, such as suppliers of production commodities and milliners. This is not the platform to take issue with them, but I will engage with them around the table in the near future.
South Africa has all the potential meet the demand for wheat in the country. In 1982 and 1983 we even had a surplus of wheat, which we could export. But - economic conditions have changed dramatically in the last couple of years. Our farmers are dependent on international wheat prices and are competing mostly against subsidised farming countries. Now we have to import on average 700 000 to 1,1 millions of wheat a year to meet our demand. Farmers in Argentina, USA, Canada, Australia and Russia are now the beneficiaries from our imports. The effect on our economy is clear: If we import only 1 million tons of wheat a year R1,7 to R2 billion a year is lost to our economy.
Most of these countries from where we import wheat are subsidising their farmers. We can consider the same but we know that that is an option that we cannot afford. The other option is to increase import levies and rates. Only by doing this, we will be able to stimulate our local economy in an effort to create a HOME for ALL in the Western Cape.
Enquiries: Alie Van Jaarsveld
Tel: (021) 483 4930
Fax: (021) 483 3890
Cell: 084 604 6701
Issued by: Department of Agriculture, Western Cape Provincial Government
2 December 2004
Source: Western Cape Provincial Government
Title: Dowry: Western Cape Adjustment Appropriation Bill
Speech by Cobus Dowry, Western Cape Minister of Agriculture, Adjustment Appropriation Bill
The only addition in the agricultural budget which I want to highlight is the R9 million that the dept received from the national Dept of Agriculture as a conditional grant for drought relief, of which, R1 million must be utilised for the sinking of boreholes in drought stricken areas in the province. Although we are grateful for these funds it is clearly not sufficient to address the plight of our farmers in these areas. During a visit to the Piketberg/Eendekuil area recently as part of my ongoing monitoring of the drought situation, I witnessed failed crops and I spoke to affected farmers. One cannot but feel empathy for these farmers. Unfortunately empathy alone will not address the disastrous effects of the drought, not only to farmers but also to the rural community and the economy of the province as a whole.
This disaster we are facing as a result of the drought has already started in the 2003/2004 season and escalated drastically in the 2004/2005 season, which has just come to an end for our grain producers. The two seasons of drought is the worst that has ever been experienced by farmers in the area of Piketberg, Porterville, Eendekuil and further north (commonly known as the Rooi Karoo).
The effect of the 2004/2005 season is worse than the previous 2003/2004 season. During the present season, farmers spent more on production costs than in the previous one because of the untimely rains during the sowing/-planting season. The dry conditions forced most farmers to wait until the last minute before they started with their sowing activities.
A normal yield in the Boland agri area is ±140 000 tons. In 2003/2004 only 58 000 tons were harvested and this year only 51 408 tons were produced.
During 2003/2004 65 000 hectares were planted, this year 75 000 were planted in the Rooi Karoo area. It is estimated that the break-even yield should be 2.5 tons per hectare. During 2003/2004 the average yield was 0.97 tons per hectare. This season produced a yield of 0.90 tons per hectare.
In a normal year there are about 230 producers that sow wheat. This year 205 took part and eventually only 150 harvested. Of the 75 000 hectares that were planted 25 000 hectares did not produce one wheat germ.
Poor yields in crops can only be attributed to the extreme weather conditions. In my deliberations with banks and co-ops it is evident that the farmers cannot be blamed for the poor and well below average yields.
The Department, through its extension offices assures me that farmers in these areas are making use of best practice with regard to their farming activities.
Financial impact:
After the bad crop of 2003/2005 a carry-over debt of R32 million existed, which was reduced to R16 million before the start of the new season mainly to the conciliation of debt and the sale of livestock. It is estimated that with the debt incurred through higher and extra production costs, this figure would increase with a further R50 million totalling R66 million.
The total effect of this means that farmers will not be in a position to obtain any future finance towards production costs for the 2005/2006 season resulting in many farmers not being able to put one grain of wheat into the ground at the start of the next season. The impact of this on the total rural community, from producers, to farm labourers, to entire towns, means that we will have ghost towns with many thousands of farm labourers and other employers in businesses that will be laid off. The estimated direct impact on farm workers will be the loss of more than one third of the jobs of the estimated 3000 workers who are employed by wheat farmers in this area.
Speaker in an effort to deal with this matter on a broad as possible front I have engaged in talks with commercial banks during October and will be meeting with representatives of commercial banks and co-ops on Monday in an effort to address the effect of the drought on farmers. It is already evident that there are a number of farmers who will not be in a position to carry on farming and some are already selling implements and possessions in an effort to survive. The next step will be farms that will come up for sale under negative conditions.
Speaker
I say it at every possible occasion, and I have to say it here. If we want to succeed in our land reform and empowerment programs in agriculture, we cannot hope to settle new farmers under bad conditions and on farms that are not economically viable and think we have achieved our goals. We will just lead them further into a poverty trap and it will be criminal of us to expose them to such conditions and expect them to make a success of farming.
Speaker
At the launch of the Proudly South African campaign, President Thabo Mbeki said the following, and I quote: "This campaign is vital for our economic growth and I call on every South African Company to join and support its activities". This also means that it is time for the business sector to realise that they have a roll to play in the agricultural sector that forms the backbone of the economy of the Western Cape. There are quite a number of up and down stream players that are making major profits at the expense of farmers, such as suppliers of production commodities and milliners. This is not the platform to take issue with them, but I will engage with them around the table in the near future.
South Africa has all the potential meet the demand for wheat in the country. In 1982 and 1983 we even had a surplus of wheat, which we could export. But - economic conditions have changed dramatically in the last couple of years. Our farmers are dependent on international wheat prices and are competing mostly against subsidised farming countries. Now we have to import on average 700 000 to 1,1 millions of wheat a year to meet our demand. Farmers in Argentina, USA, Canada, Australia and Russia are now the beneficiaries from our imports. The effect on our economy is clear: If we import only 1 million tons of wheat a year R1,7 to R2 billion a year is lost to our economy.
Most of these countries from where we import wheat are subsidising their farmers. We can consider the same but we know that that is an option that we cannot afford. The other option is to increase import levies and rates. Only by doing this, we will be able to stimulate our local economy in an effort to create a HOME for ALL in the Western Cape.
Enquiries: Alie Van Jaarsveld
Tel: (021) 483 4930
Fax: (021) 483 3890
Cell: 084 604 6701
Issued by: Department of Agriculture, Western Cape Provincial Government
2 December 2004
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