Africa: Shortage of commercial farms hampering food production

South Africa is a country of many challenges and is also a gateway for investors in Africa and offers enough opportunities in agriculture for investment, cooperation, expansion and trade. New foreign agricultural
investments in South Africa are to the advantage of South African
farmers and assist in job-creation.

This was the central theme of a speech which Dr. Pieter Mulder, deputy
minister of agriculture, forestry and fisheries delivered this morning
at an international agricultural conference in Pilanesberg. The
conference was attended by the largest and most successful farmers from,
amongst others, America, Russia and Portugal.

Dr. Mulder said South Africa is still the economic giant of Africa and
if the current trend continues, Africa will play an increasingly
important role in the world economy.

“By the year 2040, one in every five of the planet’s young people will
be living in Africa and its working population will be larger than that
of China.

What is of great importance for farmers is that Africa has approximately
60% of the world’s uncultivated agricultural land and a large portion of
its natural resources. Yet it only delivers 10% of the world’s food,
while its consumers are increasing at three times the rate of the OECD
(Organisation for Economic Co-operation and Development) countries and
food production will have to increase accordingly,” Dr. Mulder said.

According to him, the biggest reason for Africa’s low food production is
a shortage of large commercial farms. In Africa 85% of all farms are
smaller than 2 hectares. In America, for example, only 4% of farms are
smaller than 2 hectares. New models should therefore be developed to
make production work according to these models without causing any harm
to commercial farmers. If the planned Tripartite Free Trade Aria (FTA)
in Africa becomes a reality, it would create a market of 600 million
people in 26 countries stretching from Cape Town along the east coast to
Cairo.

According to Statistics South Africa, there are 47 500 commercial
farmers who play a key role in food security in the country. The latest
figures is closer to 36 000. They produce 95% of South Africa’s food
while the remaining 5% is produced by emerging and subsistence farmers.

The world trend is urbanisation and more than 60% of the world’s
population live in cities and that is why the role of subsistence
farmers in food security is becoming smaller. It is clear that the world
will increasingly rely on industrial farmers to keep the global food basket full.

In the period 2012/2013 South Africa’s export of agricultural products increased by 16, 4% but its imports had also increased by 12, 3% over the same period.

“It is important for the government to create new agricultural
opportunities in South Africa and for this close cooperation between
farmers and business sectors, the government and foreign investors are
needed. It is also important that the government creates the right
climate that would make South Africa an attractive option for foreign
investors,” Dr. Mulder said.

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SA farmers not giving up on Congo

None of the farmers who lease land at Malolo are in such a desperate situation that they cannot return to South Africa. Some of the farmers are being financed as a collective in a transparent way by a reputable South African agricultural businesses, while those outside the collective have challenges to obtain production financing in the absence of collateral. Given the South African governments’ policy to avoid bilateral investment treaties, it is ever more difficult to obtain finance.

The farmers (our members) are not prepared to give up or abandon their farms at Malolo, despite the many challenges. There is a long list of interested farmers from SA who are eager to grasp the opportunity to join the project. The nature and trend of Rapport’s coverage in the paper and by blogging criticism by right wing extremists on our project, makes it so much more difficult for our members to access production financing.

The vast majority of the 28 farmers who entered into lease agreements on land on Malolo, have not even started their farming operations yet. The first failed crops Rapport refers to, was a collective effort by a group of those farmers who had some financing and embarked on a pioneering effort which involved a grueling road convoy to Malolo via Namibia, Angola and DRC in December 2011. The first two harvests did not meet expectations due to various factors such as the worst drought in 37 years, infestation by insects which were unknown to us, and management problems. The contract between that group of farmers and the independent manager was therefore not renewed by the group of farmers who took over the developed land and existing equipment, along with the outstanding debt.

Though the first harvest was disappointing, it was still the biggest volume of locally produced maize the Congo had ever seen. At a seminar held in Kenya in 2013, it was stated by experts that new farming ventures in Africa take between 3 to 5 years to obtain acceptable harvests. The Todi River Farms portion of the Malolo project reaped an acceptable harvest after only 2 years.

A proper assessment of lessons we have learned, along with professional advice led to a restructuring of our farmers’ association as well as the company in which the land is leased for 30 years (renewable) from the Congolese government. Many of Rapport’s criticism stems from problems we have encountered prior to our AGM where the reconstruction of our efforts in Congo was mandated.

Internal differences of opinion did play a role in the events which led to our restructuring, but which civil society entity is free from that? If any crime or any breach of contract had been committed by an individual or group of farmers under our umbrella, the law should take its course. CFA is not aware of any criminal or civil action against any of our members in SA or in Congo.

In terms of its memorandum of association with AgriSA, Congo Farmers Association takes full responsibility to organise and represent SA farmers in Congo, and the reporter was fully aware of it. SA farmers in Congo do not demand or expect AgriSA to get involved with financing, procurement, logistics, operational matters or internal affairs of our farmers’ association or our land lease company in Congo, and any suggestion that AgriSA should run our affairs or take any blame for our misgivings or failures, is mischievous and embarrassing to both organisations.

Enquiries: Fred Daly – 082 804 3130 – On behalf of the Congo Farmers Association Executive

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AFGRI support proposed poultry regulation

Most poultry companies have endured losses for more than 30 months and will not be in a position to subsidise the additional cost and on the flip-side consumers (particularly those in the lower income groups) will find it difficult to pay 15% more for an IQF product when increases are felt by the consumer in fuel, other food products and the cost of services, putting them under further strain. Food inflation, as an example over the past year, was 37%, whereas poultry inflation has been 0% since 2007.

“After careful consideration of the proposal relating to the regulation of brining published on 15 December 2013, AFGRI Limited and its subsidiary AFGRI Poultry are in favour of the regulation,” said CEO of AFGRI, Chris Venter. AFGRI Limited, a leading listed South African agricultural services and foods group, announced today that it is in support of the proposed brining legislation.

The Department of Agriculture, Forestry and Fisheries (“DAFF”) announced that it intends to cap the brining of chicken portions (IQF) at a level of 15% and to cap the brining of whole birds at 10%. The intended implementation date is 1 September 2014.

“AFGRI is in support of DAFF’s proposed regulation based on its opinion that the maximum brining levels suggested are ethical, fair, reasonable and scientifically justifiable said, Izaak Breitenbach, MD of AFGRI Poultry. “It is an opportunity to provide clear guidance to the industry and it will level the playing field for all suppliers of poultry products. A cap will eliminate the competitive pressure to up the brining levels that has been of concern.”

The reduction in brining levels will not only provide transparency to consumers but will furthermore create a better legal framework for compliance with the regulation. The reduced brining level will unfortunately financially impact the consumer and producers alike AFGRI is therefore keen to engage, interact and support Government departments in this regard. “We strongly believe that brining is only one aspect of the poultry value chain and it is also important for all parties to engage around issues of controlling and administering imports, administering packaging as well as other parts of the value chain,” Venter noted.

It is important to understand the background to brining. The terminology “brining” is misleading as it insinuates that the product is injected with a water and salt mixture, which is not the case. Poultry producers, AFGRI included, use flavourants which are injected into the carcass or product to make it more succulent and tender. This is also the process required by quick service restaurants to obtain a distinct taste and tenderness profile to their respective products. Treating the carcass or portion with a flavour enhancer (which costs less than meat) also reduces the cost per kilogram of meat, making individually quick frozen (IQF) portions, the lowest cost animal protein source.

It is with the above in mind that DAFF initiated a consultative process to put a cap on the legally allowable percentage of injectable flavour enhancer, namely 15% for chicken portions and 10% for frozen whole birds.

“It is the consequence of the brining cap however that needs to be dealt with so as not to have a material negative effect on the consumer and the producer,” reiterated Breitenbach. “The nett effect will be that the cost of IQF will increase by approximately 15%,” he said.

AFGRI currently has BEE ownership of 26%, employs a total of 2,500 staff within the poultry business and produces quality poultry products into the South African market place. Given this, it is open to discussions with the role players to ensure that a smooth transition into the new brining regulation is in place by the suggested implementation date.

Issued for:                                           AFGRI Limited

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Scheme provides top bulls to smallholders

The North West Department of Agriculture and RuralDevelopment’s efforts to improve the quality and reproductive rates of livestock in the province will be realized through the will be distribution 130 bulls (worth R3 million) to farmers in Dr Ruth Segomotsi Mompati District through the Sire Subsidy Scheme. The handing over of pure Bonsmara, Brahman, Simmentaler, Simbra and Nguni
breeds will take place at the Department’s Armoedsvlakte Livestock Breeding Centre in Vryburg.

Co-operatives and individual farmers who applied for participation in this Scheme will get their subsidised bulls in accordance with their breed of choice. For farmers to qualify, a set of requirements must have been met, and they include amongst others, the ownership of a minimum of 15 to 50 heifers, land that can be managed to contain the sires and that their animals must be certified free of noticeable
diseases.

MEC Desbo Mohono, said the Scheme will assist farmers in ways needed to make the agricultural sector a more economical one, thus leading to the general upliftment of farmers and the broader communities.

“Through this Scheme farmers will be able to increase their profitability since access to the competitive beef industry markets will be improved. Moreover, our farmers will confidently be involved in
various breeders associations’ activities, thus gaining more knowledge and support on livestock management aspects,” says MEC Mohono, who also highlighted that the Department will ensure that farmers get adequate training on livestock production systems, livestock and pasture management, and animal health matters.

The launching of the Sire Subsidy Scheme was pronounced by the MEC while tabling the Department’s 2013/14 Policy and Budget Vote Speech in May last year. The distribution of more bulls for farmers who applied in other districts of the province will take place later this year.

Bonolo Mohlakoana
NW Communication Directorate

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Govt wants smallholders to utilize 1 million ha

“To date, R2.6 billion has been invested in agricultural and rural infrastructure and 240 000 jobs created. Completed projects include a soya processing plant, two abattoirs, 7 pack houses, 1 700 km of fencing and 3 bridges. Ongoing work is being done on four irrigation schemes, on an animal vaccine laboratory, and the construction of fresh produce markets,” Minister Tina Joemat-Pettersson said at the agri-sector unity forum.

The Infrastructure Bill, approved this week in the National
Assembly, will ensure that these projects are not delayed by regulatory
requirements or other obstacles.

“Much of the focus on agriculture has come about through a renewed
international focus on food security. Increased demand for food, coupled
with climate change and extreme weather events, continues to challenge
the food security status of many countries. South Africa is one of the
few countries in Africa that are food secure, although we do still have
major challenges in ensuring that every person, every household, has
sufficient nutritious food at all times,” the Minister said.

Cabinet last year approved the National Food and Nutrition
Security Policy, which includes a Household Food and Nutrition Security
Strategy, driven by the Department of Social development, as well as a
Food Production Initiative which we are running under the banner of
Fetsa Tlala. We aim to see 1 million hectares on under-utilised,
communal land under production, driven by communities and supported by
government.

In terms of the Policy, the Office of the Deputy President will convene
a National Food and Nutrition Security Advisory Council (FANSAC), which
will ensure all interested parties get to contribute.

 

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