06 Mar 2019
FOR IMMEDIATE RELEASE
GRAIN SA CONGRESS 2019
CRITICAL REFLECTION FOR A NEW FOOTPRINT
Following great uncertainty of the past year, Grain SA had to critically reflect and take decisive steps to create a new footprint for farming and local food production. Through all its efforts, and keeping a sustainable grain sector on the forefront of all its does, the organisation will continue to engage government and agricultural stakeholders in its efforts to ensure sustainable grain production and national food security.
Grain SA will step up its efforts and engagements with all relevant role players to highlight the dire need for a subsidised crop insurance for grain farmers. Competing with the rest of the world, commercial grain producers are at high risk with hail, drought, floods and disease outbreaks, real and constant threats. In addition, almost all smallholder farmers in South Africa do not carry crop insurance because of prohibitive costs, leaving them badly exposed to various risks.
Grain SA will further advocate for increased government investment on research. Without research, farming practices, profitability, yields and eventually food security, will all whittle.
Finally, focussing on financing models for grain producers, Grain SA will exert a great deal into establishing support systems for farmers who are currently servicing debt, in order to assist the sustainability of the intention, but especially focus on including new farmers who are currently not able to access financing systems.
As was mentioned by the Chairperson, organised agriculture owes the members some form of solution to mitigate the effect of drought in grain farming. The implementation of the Sec 7 Committee recommendations by the Minister of Agriculture, Forestry and Fisheries are very encouraging – now for the implementation!
2018 in Summary
Reflecting back, in so much as the political environment were concerned, the difficulties continued with expropriation without compensation a trending debate throughout. Grain SA focussed on the sustainability of the production and maintain its efforts to ensure farmers who receive new farms, also receive title deeds to the land. To this end, Grain SA has vast experience in developing farmers and getting them to commercial status, which will be vital in participating in land reform without compromising food security. The process had to be managed properly, and GSA ensured its presence at the In Transformation Initiative Indaba as well as the land expropriation parliament hearings and the Bela-Bela Land Reform Summit organised by Landbouweekblad and Agri SA. In addition, Grain SA attended public hearings, had good conversation with the ruling party and were relatively comfortable with changes to the draft Expropriation Bill in its proposed form.
The Grain SA Farmer Development Programme continued to set the benchmark in the sector and received two prestigious awards at the Annual AgriSETA Excellence Awards ceremony. The programme received recognition as a leading commodity organisation and was awarded best governed rural development project. The Grain SA Farmer Development programme continued with partnerships to make a difference to national and household food security levels through the establishment of viable grain farming enterprises. Great effort also goes into solving the unique challenges facing developing farmers, which mainly includes opening up avenues for financing.
Profitability remains a big concern in the grain sector. Grain SA worked relentlessly to negotiate the abolishment of the 10% import tariff on canola seed. The organisation’s continuous monitoring of input cost and quality, also involved an application for the removal of the 20% import tariff on certain tractor tyres, as well as extensive contributions to the government’s proposed new diesel rebate system. It further introduced a breeding and technology levy for soya, wheat, barley and oats and above all – which undoubtedly had the biggest impact on the winter grain farmers, was the changes to the wheat prices differences and the improvement of the wheat grading.
Grain SA continued to look at alternative domestic and international markets for maize, with a specific focus on Iran and successful maize exports to Vietnam. The discussions continue with China regarding maize and soya beans as an alternative in export years for various grain products, which will allow continued local production.
In terms of industry information, Grain SA stepped in to ensure integrity and transparency of fundamental national systems. Likewise, the issue around import and export information was successfully tackled. Grain SA continued striving for timeous and relevant market information which saw the publishing of the import and export data for maize, and we await the publication of wheat, soya beans, sunflowers and soya oilcake. Grain SA successfully prevent the imposition of a location differential on soya beans and successfully initiated a full investigation by an independent expert regarding the JSE location differential system.
Furthermore, GSA managed to investigate alternative crops for the winter cereal areas, attend to Canola seed quality and availability and conduct a feasibility study on sorghum to increase viability. As a contender in the global soya market, access to the latest seed technology is vital for local farmers to remain competitive.
Research remained a key focus and strategic partnerships were sought to find alternative research platforms and funding due to an unfortunate failing of old systems. To this end, Grain SA established several consortiums to find the best people to do specific research in the most economical way. We are also sourcing external funding and placed the funds within consortiums to promote research. Crop improvement and protection are two of the main focus areas. The biosecurity of our country is also very important, as is climate change and conservation agriculture. These overarching themes included wheat breeding, soil borne diseases, and crop protection with specific emphasis on Sclerotinia.
Crop finance for Missing middle
Background - The Grain SA Farmer Development Program (FDP) has been in existence for just more than 20 years. It has become a benchmark in the agricultural sector and we have won a number of accolades to reward hard work and endurance. In Grain SA’s analysis of the progress as well as the hindrances to successfully establish new black farmers in a sustainable way, we have noted that the progress with the smaller (1 hectare) farmers are far better than those working bigger farms – the so called “missing middle”. These are farmers with access to bigger pieces of land that have the potential to become commercial farmers. The single biggest problem that these farmers are facing is access to finance. They do not qualify for productions loans because they cannot offer security to the banks - they are working Government owned land and have no title deed.
Plans - The ultimate plan is for them to get title of the land: either by buying it through favourable long term loans or Government must put up a guarantee that can be used as security by financial institution to enable a loan. The Agricultural Sector plan (2019-2024) proposed exactly that: An Agricultural Development Agency (ADA). It is envisaging that it will be a partnership between Government and the Private sector. The teams working on the details are flat out busy with the crafting of such an entity. The problem is that it might take another year or two to iron out all the details. The frustration levels of farmers, however, is way higher than that.
The Grain SA leadership took all of these factors into account and made a decision to commence with an own initiative to assist the “missing middle” in the coming season. It will definitely not be on the same scale, but it will make a start on the same basis as the ADA is anticipated. Grain SA will invest an earmarked amount from our FDP funds at a commercial bank (Standard Bank) and used it as a guarantee together with some funding from Standard Bank that will act as security for “missing middle” members to apply for loans. All the necessary procedures and governance will be in place to meet the legal and regulatory requirements of SA. These farmers will be asked to make an own contribution and we will engage with our input provider partners to form part of this initiative.
Hope - Grain SA has embarked upon many new initiatives in the past in this this area. We owe it to these farmers and cannot wait any longer to commence with something. We would like to invite everybody that want to join in this initiative to contact us. Let’s take hands and make this happen!
Organisation and Governance
On the financial front, Grain SA managed in a difficult year to turn a projected loss into a profit, affirming the sustainability of the organisation. Grain SA furthermore received an unqualified audit, which, when working with public funds, remain extremely important and an achievement we regard highly.
Grain SA launched the NAMPO-brand in the Western Cape, with the inaugural NAMPO Cape show held at Bredasdorp Park, which proved highly successful and a partnership which will continue for the next couple of years. Through effective management and commercially successful events such as NAMPO, Grain SA is set to continue growing its base as the independent voice of the South African grain farmer.
Grain SA values its media relations and the contribution of each printed, online and broadcast channel whom are assisting in changing the image of agriculture and its landscape. These collective efforts contribute to food security, economic growth, poverty alleviation and job creation.
Grain SA Communications
Jannie de Villiers, CEO, Grain SA
086 004 7246 | email@example.com | www.grainsa.co.za