Grain SA's Jannie de Villiers on government's cereal offences

03 March 2019 - 00:03 By CHRIS BARRON

The minister of agriculture, Senzeni Zokwana, has told parliament he is concerned about SA's falling wheat production, but the CEO of Grain SA, Jannie de Villiers, says this is largely because of a lack of support from the department.
SA, which in the 1980s was 85% self-sufficient in wheat, is growing 2.3Mt and having to import 1.7Mt annually. The industry is dying and the government needs to wake up before it is too late, De Villiers says.
"If you become dependent on imports for a basic staple food like wheat it impacts on your food security.
"Government needs to decide to what extent it wants to protect local wheat production."
He says SA is importing about 50% of its needs. It shouldn't be importing more than 20%.
Zokwana told parliament that his department is supporting wheat farmers in a range of ways, including technical advice. De Villiers says this is not quite true.
"I don't know where this technical advice is. I've been 30 years in the industry and I've still to see some of the stuff he's talking about."
One of Zokwana's most damaging failures has been the collapse of the all-important Agricultural Research Council (ARC).
Without the research it should be providing, wheat production will continue to fall, says De Villiers.
The auditor-general has been giving the ARC, a state-owned enterprise, qualified audits, and last year declared it technically insolvent.
"The fact is it has been a mess for years and the agriculture department has done nothing," says De Villiers, a 58-year-old Pretoria and Free State university-trained economist with farming experience.
The ARC used to produce cutting-edge research that farmers depended on to increase their yield.
"If you don't increase your yield, your profitability goes out the window, and without that you're fighting to be sustainable.
"For us as farmers the only way to survive is to increase our yield."
Constant research is necessary to mitigate the effects of drought and disease, says De Villiers.
"Up-to-date research is critical for new drought- and disease-resistant varieties." The last time the ARC released a new wheat variety was in 2012, he says.
Local wheat farmers have become uncompetitive internationally because the research they require to make them profitable has fallen behind that available to their competitors.
Adding to their research woes, South African wheat farmers can't compete with global producers in Europe, the US and China, who are heavily subsidised.
"We'll never be a net exporter of wheat unless government subsidises farmers to the same extent as in the US and Europe, where government meets 30% of their costs."
Most farmers who can have switched to genetically modified maize and soya, for which there are potentially large market opportunities in China.
A stark illustration of the impact the switch to these crops has had on the local wheat industry is that in the '80s, farmers in the Free State planted 1-million hectares of wheat. In 2018, they planted 100,000ha.
In spite of the difficulties, SA can't afford to allow its wheat industry to collapse, De Villiers says.
"You spend an awful lot of foreign exchange buying a staple food like wheat. For every ton you produce locally you don't have to pay some foreigner to import, and you create jobs and maintain your rural areas and rural towns.
"It looks terrible in the rural towns at the moment."
SA's increasing dependence on wheat imports has highlighted the government's failure to provide supporting rail and port infrastructure.
In the '80s, says De Villiers, 85% of grain was distributed inland by rail.
Today, it is 85% by road, and rising.
"We're so dependent on the import of wheat for food security that we also need to maintain and upgrade our ports. If we don't then we may have the money to buy the wheat but it won't be able to come into Durban harbour except in smaller ships, which then raises the cost of importing."
He says the high level of wheat imports also reflects the lack of government support for farmers hit by droughts.
"If government would give us a subsidy to do crop insurance, as our competitors in other countries get, at least farmers can get some money back to plant again next season."
A lot of maize farms in the Free State are on the market, and many farmers are fighting with banks wanting to repossess their farms because they can't pay their fertiliser, seed and diesel accounts.
Very few of them are insured because it's too expensive, he says. When President Cyril Ramaphosa asked Grain SA last year what was needed to help the economy grow, it asked for a crop insurance scheme.
At least white farmers have a better chance to access loans than black farmers.
"Can you imagine a black farmer using all his savings to plant for one season, he loses everything in a drought and will never be able to plant again because he's got nothing left?"
Grain SA has emerging grain farmers on its books who can afford to plant only 30% of the hectares they have. They don't have access to finance because they don't have title to the land they farm.
Expropriation without compensation won't change that, he says.
"They might get land but they won't have access to finance. The minister has made it clear since 2014 that government will keep the title."
Meanwhile, the policy has stopped investment in the sector, he says.
Large swathes of land in the Free State are unproductive because of this. Farms are being put up for auction by banks but there are no buyers.
It's not all gloom, though. Deputy agriculture minister Sifiso Buthelezi called De Villiers three weeks ago wanting to know "what is the crop size like and is there going to be enough food during the election".
"He was worried about food prices in an election year."
It's easy to be cynical, "but at least he's asking the right questions".
If it takes an election to wake up the department, then so be it...

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