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TWO WORLDS – yet one

September 2011

Jannie de Villiers, CEO

During the first week of August, I was in the USA attending the Leadership Training Course presented by the National Corn  Growers Association for their top producers.

This was sponsored by Syngenta and the occasion was the result of the cooperation that followed from their executive officer’s visit to Grain SA during our Congress in March 2011.

Apart from the excellent course content, however, it was noticeable how many differences there are between South Africa and the USA; and then again certain issues that are almost exactly the same. As a result of the recession and the down-grading of their credit rating, the USA is experiencing a really big self-confidence crisis.

They fear the Chinese and in all the future scenarios and policies, there is speculation about the reaction and actions of China. Many examples were quoted of “the new normal” that includes the lowering of the standard of living of their middle class in particular. The lowering of standards of living will affect their consumer trends and most likely how they will vote during the next election.

There exists a fear among USA grain producers that the government, considering the huge budget deficits, may withdraw the subsidies and regulatory support from the bio fuels industry – which might have catastrophic consequences for grain prices. The USA currently uses between 30% and 40% of their maize crop for the production of ethanol.

Another difference that struck me is the fierceness of the debate over agriculture and the environment. This debate is between the consumers and the Greenies on one side and the grain producers on the other side. Most of the debate is taking place via the media, especially the social media (Facebook, Twitter and blogs).

There was therefore a strong focus on training, leading producers (and their wives) to use the social media to defend themselves and to participate in the debates taking place on uncommon “ground”. It is an open question whether this is the direction in which debates in South Africa is heading. Locally, however, it is between producers and the government and is about property rights, land ownership and sustainable production.

Hunger in Africa takes the back seat on their agenda. It just remains a generic, unemotional remark that is brought to the debate when it suits their arguments to produce more grain. They know how hungry Africa looks on the TV, but have not yet looked into the eyes of children that have become hopeless due to hunger.

It is here where the big differences come to the fore; to make them understand that subsidies lead to overproduction which in turn lowers world prices to the extent that Africa cannot sustainably produce her own grains. The remark “You deny us the right to produce”, does not go down well with them.

The USA has a great opportunity, given the level of current grain prices, to get rid of their agricultural subsidies and in doing so not only help developing countries to produce more sustainably and profitably, but also to make a contribution to the huge budget deficits they are experiencing.

After the week among their leaders, I once again realise that we do not have to stand aside for them, but that we will have to work a lot more cleverly to improve our own policy environment, is a given. We will have to equip our agricultural leaders much better to enable them to interact with policy makers and to get involved themselves and not just pay someone to do it.

Publication: September 2011

Section: Editorial