By Themba Rikhotso
As South Africa embarks on the 2023/24 agricultural season, a multifaceted landscape of challenges and opportunities is unfolding within the farming sector.
Animal diseases are a significant challenge to livestock farmers, with South Africa continuing to battle outbreaks of foot and mouth disease (FMD), highly pathogenic avian influenza (HPAI) and African swine fever (ASF).
More cases of HPAI have been confirmed in recent weeks. The poultry sector, in particular the egg industry, has been impacted negatively both on the breeding as well as the commercial side of the business. Of the industry’s 27 million commercial birds, about 30% have been lost due to the disease. The only effective way of managing it is by culling, as vaccines are not yet utilised.
The industry is working on a solution, looking into importing fertile eggs to improve the breeding stock. There are no cases reported among commercial broiler birds, with the exception of a few breeding farms. This can be attributed to the biosecurity in place around broiler production, as well as the fact that production is done in closed houses.
The broiler industry already has a permit to import breeding stock/fertile eggs when it experiences a shortage, unlike with the eggs, where the process is yet to be finalised. The outbreak of avian influenza, accompanied by the devastating culling of birds, has triggered a surge in egg prices, with shortages impacting both consumers and businesses alike. It is estimated prices for chicken meat and eggs in South Africa will remain high, and likely spike significantly before the end of the year.
South Africa's agriculture sector must also grapple with risks such as load shedding, as well as a confluence of cost drivers – from fluctuating fuel and fertiliser prices to a fragile Rand. Navigating these will require resilience, adaptation and strategic planning to sustain and grow the industry. Our mandate as the Land Bank is to foster inclusive agricultural and rural development to enhance food security and economic growth.
To achieve this, the Land Bank must be able to ensure that funding is made available to support farmers in achieving these objectives.
The Land Bank has launched two blended finance programmes, established in partnership with the Department of Agriculture, Land Reform and Rural Development.
The Blended Finance Scheme (BFS), aims to facilitate the meaningful participation of black producers and majority black-owned enterprises owning and controlling the agricultural value chains.
The Agro Energy Fund (AEF) is a blended finance programme established to provide for the acquisition of alternative energy assets to alleviate the impact of load shedding on farming operations and the agricultural sector. The fund focuses on financing energy-intensive agricultural activities, including irrigation, intensive agricultural production systems, and on-farm cold chain related activities.
The two schemes are intended to ensure that as an institution we contribute towards achieving food security where all people, all of the time, have access to sufficient, safe, affordable, and nutritious food. This can only happen when farmers receive adequate support to enable production.
By Themba Rikhotso is the chief executive of the Land Bank.
BUSINESS REPORT