NEWSMAKER

Look after the agricultural sector or SA will be in serious trouble, says Agri SA’s Christo van der Rheede

Imposing higher rail freight tariffs on agriculture would have a devastating impact on a sector reeling from soaring input costs and would compromise food security, says Christo van der Rheede, executive director of Agri SA. His comment comes after Transnet CEO Portia Derby hinted at a tariff hike in parliament last week.

“People should not have this idea that everything is hunky dory in the agricultural sector and it is ripe for squeezing. There may have been a big increase in exports, but the profitability of farmers is under severe threat,” Van der Rheede said.

The value of agricultural exports had risen, but farmers’ cash flow was down and would drop further because of rising input costs. Hiking rail freight tariffs would “bring it down significantly more”.

“At face value agriculture looks like a very profitable sector. However, it’s first and foremost a high-risk sector that is exposed to many variables that, in an eye blink, can wipe out whatever profit a farmer stands to make.”

Farmers who were paying R10 for a litre of diesel in 2015 are now paying almost

R26, a 160% increase. They’ve also been badly hit by load-shedding and rising electricity tariffs.

“The entire agri value chain is reliant on energy, whether diesel or electricity. It’ sa highly capital-intensive business and all sorts of factors impact its profitability.”

In addition to a sharp rise in the price of packaging, the cost of shipping has rocketed from R18,200 per container in 2017 to between R130,000 and R160,000 this year.

“We also saw a spike in the minimum wage for farm workers this year. All these increases have had a seriously negative impact on the profitability of farmers, who are not price makers, they’re price takers. They have to absorb all these increases without having any say over the cost of their products.

“So there is no way the farming sector can now be subjected to rail freight tariff hikes.”

In addition to price and rail tariff hikes, farmers are exposed to criminality “like never before”, said Van der Rheede.

“Criminals come on to farms and steal literally anything they can lay their hands on, from copper pipes to copper cables and crops. There’s even a consortium that focuses on the theft of seeds.”

And “we regularly hear of horrific murders of farmers and farm workers”.

“The government needs to understand that in an environment where there is no law and order, the expertise we depend on for our food security is at serious risk. If farmers are not protected and we lose their expertise, we place the entire country at risk.”

President Cyril Ramaphosa has given Agri SA an “undertaking” to implement the government’s rural safety strategy, “but this won’t happen without a concerted effort by the minister of police”.

Unfortunately, he said, the agricultural sector has “no confidence” in police minister Bheki Cele.

“We don’t see any political will to make sure the police do what they’re supposed to do and that there is greater co-operation and networking between the police and the farming community. That is not there. As long as there is no effort to hold police accountable, farmers and farm workers won’t trust them.”

Would Agri SA, which has a good relationship with agriculture minister Thoko Didiza, like to see Cele removed?

“I don’t want to dictate to the president how to do his job. All I would say to him is, ‘Look at the scorecard, Mr President. We’ve seen the latest crime statistics and they paint a dire, dire picture. Nobody feels safe

What Transnet, the National Treasury and everyone who sees agriculture as a lucrative sector they can squeeze for more profits needs to understand is that they’re throttling the goose that lays the golden eggs

in South Africa any more.’”

If the state did not protect communities, they would protect themselves. This is happening in the farming sector, said Van der Rheede.

“Farmers no longer trust the state or the systems that are supposed to protect them and they’re establishing their own networks. It doesn’t bode well for the future if that trust falls by the wayside.”

Though Ramaphosa asked Didiza to tell Agri SA at its annual conference in October that “farmers are the lifeblood of our country”, Van der Rheede feels the government doesn’t appreciate just how critical they are to the country.

This was demonstrated when severe lockdown levels were imposed and economic activities halted to stop the spread of Covid.

Agri SA met Didiza and pleaded with her to have agriculture declared an essential service.

“If that wasn’t done, we wouldn’t have just had hunger in the country, we would have had famine.

“The agri sector ensured South Africa remained food secure. We remain the No 1 country on the continent in terms of food security and ... delivering world-class food that we export to the rest of the world.”

Van der Rheede said South African farmers were among the most successful in the world despite enjoying none of the advantages their counterparts in other countries do, such as farm security and reliable transport logistics.

The government and state entities such as Transnet needed to be reminded of the crucial role the agri sector plays, he said.

“If I were the president I would engage with farmers on a regular basis to understand their plight. Without farmers the entire country would collapse because everything starts with feeding your people. But we don’t only supply food.

“As South Africa’s fourth-biggest foreign exchange earner, we add billions to the fiscus. We create 873,000 jobs in primary agriculture and contribute R22bn to the economy in wages.

“If farmers are squeezed for higher rail tariffs on top of what they pay to fix roads and generate electricity, and what they pay for security because they get no protection from the police, then you get to a situation where farmers start to ask, ‘Is this still something I need to pursue or should I give up? ’”

This point has been reached, he said; 5,000 commercial farmers out of 40,000 had quit since 2017 and one in five are thinking of it.

“What Transnet, the National Treasury and everyone who sees agriculture as a lucrative sector they can squeeze for more profits needs to understand is that they’re throttling the goose that lays the golden eggs. If that goose dies, we’re going to have serious, serious trouble in this country.”