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State of Ag in South Africa

Understanding competing countries and potential customers is an important aspect of global agriculture. To learn more about agriculture in foreign countries, farmers and agribusinesses frequently travel abroad.

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David Miller, the director of research for the Iowa Farm Bureau, recently traveled to South Africa to scout the country for a future trip with farmers. During his time there, he learned about the continued murders of white farm families, the ongoing drought, the effect of the low-value of the South African rand, and about livestock farms being converted to game preserves.

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Pressure on land reform
When apartheid ended in 1994, white South Africans, who made up less than 10% of the population, owned 90% of the South African land. Through land reform, South Africa hoped to transfer 30% of agriculture land to black farmers by 2014.

At this point only 8% of land has been transferred, leading some to believe the land reform policy is not working quickly enough. With the current land reform policy, a willing owner can choose to sell his or her land, and then the land is redistributed to an emerging black farmer.

“There is a lot of growing sentiment in a fraction of the African National Congress (South Africa’s governing social democratic party) to do it by force or to take the land without compensation,” says Miller. “There are other factions within South Africa that have become violent.

“On average, a white farm family is being killed every 5½ days,” continues Miller. “It seems the murders have been underreported because some are listed as robberies, but it has been very brutal. All of the farmers we talked to were very much aware of it.”

Farmers are increasing security, setting up observation cameras, and always leaving someone at home so farms are continuously guarded.

There are also families that are fleeing the country. “Some are going to Zambia. One of the families we visited is considering moving to Canada,” explains Miller. Violence isn’t the only reason white farmers are packing up.

“There is a high amount of uncertainty in regard to their status of land ownership and the amount of land they can own,” adds Miller.

“The issue of land reform is probably going to take another decade or more to sort out in South Africa,” sums up Miller. “The violence that’s associated with it and the possibility of land reform changing from voluntary participation to forced is very much on the minds of farmers and everyone involved in agriculture.”

Widespread drought
South Africa’s corn crop suffered this year from a widespread drought that disrupted pollination and reduced yield potential. The corn crop will be down to 11.5 million tonnes, one-quarter less than last year’s harvest, according to the USDA’s monthly WASDE report.

“The drought was more severe in the western part of South Africa than in the eastern portion, but it was widespread,” says Miller. “A lot of places we visited said they hadn’t had an inch of rain since October. Farmers in the western portion were looking at a 50% reduction in their corn crop.”

On the farms Miller visited in the eastern part of South Africa, corn yields were close to 160 to 180 bushels on dryland and 200 on irrigated acres. In the west, Miller saw nonirrigated corn that was yielding only 40 to 60 bushels per acre. Approximately 20% of South Africa’s corn acres are irrigated.

Low value of rand
The increasing value of the U.S. dollar is making American products more and more expensive to foreign countries. South Africa isn’t exempt. The South African rand is at a 30-year low in comparison to the dollar. However, America doesn’t do a lot of commodity trade with South Africa, so this doesn’t have a large effect on exports, says Miller.

“What it does do is increase the price of corn in South Africa because corn is priced internationally off the U.S. dollar,” explains Miller. “So farmers in South Africa still feel like they are getting the $5 corn America farmers had a few years ago.”

South Africa is also growing exports based on the weakness of the rand. “South Africa’s primary export is white corn into the Middle East,” says Miller. “Right now it’s not a very competitive market with the U.S., but over time, it could become a bigger export market. However, the short corn crop will limit how much South Africa will be able to export this year.”

Trading cattle for lions
In the northeast portion of South Africa, there is a movement among farmers, who had traditionally been cattle farmers, to put in high fences and encourage the development of predators, such as lions, leopards, and jackals, as well as impala, gazelle, and zebra.

The game preserves, complete with lodges and modern amenities, are used for hunting or picture safaris.

“There is a whole area in the northeastern part of South Africa that is developing a thriving game agriculture,” says Miller. “Farmers are seeing that as having more potential and stability than they did with traditional agriculture, particularly when they were fighting the predators.”

The former livestock producers had to do all of their lambing or calving in sheds to protect newborn animals from lions and jackals. The wildlife animals are also more adaptive to the dry landscape than the domesticated animals.

However, not everyone is thrilled with the flourishing new business. The fences aren’t foolproof, which can present a problem for neighbors who are still involved in the livestock business.

“There is a strong livestock industry, particularly cattle,” adds Miller. South Africa has 13.8 million cattle and produces 85% of its red meat requirements.

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