The South Africa’s agricultural industry body AgriSA says it will approach banks, agribusiness and government to raise 3 billion rand ($220 million) to help farmers hit by severe drought.
The agency Executive Director, Omri van Zyl told reporters on Friday in Pretoria that farmers were short of income to mitigate the effect of drought the 2018/2019 farming season.
Farmers have faced dry conditions over most of the nation for the last year, even as they are still recovering from a disastrous El Nino-induced drought in 2015.
AgriSA said that a survey of producers showed that 31,000 jobs and 7 billion rand ($510 million) in potential revenue were lost since January last year because of drought,.
“We have basically reached a point now where we don’t have any more fat in the system. There is no buffer any more in the agricultural sector.
“AgriSA will also speak to the government’s National Disaster Management agency to get access to the contingency reserves.
“We see this drought again as a national emergency because it is going to have an impact directly on consumer prices, it is going to have an impact on food affordability and it has an impact on the farmers on the land,” said van Zyl.
Jannie de Villiers, head of producers body Grain SA, also told reporters at the briefing that white maize prices were just off a near two-year peak last week.
“The farmers didn’t get enough (income) to recuperate in 2016 so the grain sector is in a lot worse financial situation than it was.
“Our ability to absorb this current drought is under pressure,” de Villiers said
In early estimates for the 2018/2019 season, farmers have planted around 95 per cent of the country’s yellow maize, which is mainly used in animal feed.
The white maize futures contract due in March traded up 2.76 per cent to 3,088 rand on Friday, just under a near two-year high of 3,255 rand reached last week.
South Africa’s official Crop Estimates Committee, which in October estimated farmers would plant 2.448 million hectares of maize in the 2018/2019 season, is expected to release the preliminary area planted estimates on Jan. 29.