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Ageing SA farmer cohort could prompt food shortages, consolidation – Deloitte

Photo by Bloomberg

Photo by Bloomberg

20th March 2015

By: Tracy Klückow

Creamer Media Contributing Editor

  

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South Africa could see food shortages in the next ten years as the country’s commercial farmers, with an average age of 62, start to retire and the new crop of farmers entering the sector are unable to fill the void, placing considerable pressure on the nation’s status as a net food producer.

The possible outcome of the country’s ageing commercial farmers is consolidation. “[However], even with greater consolidation in the industry, an ageing population with the requisite farming expertise in the agriculture sector will create long-term sustainability challenges,” consulting group Deloitte senior associate Omri van Zyl says in a statement.

The average age of a South African farmer is currently considerably higher than the European Union’s (EU’s) median age of 55, the US’s of 58 and Australia’s 53, data from farming organisation Agri SA reveals.

This is compounded by South Africa’s current chronic electricity shortage and the country being considered semi-arid in most parts, with a 2009 World Bank study estimating that just 11.82% of its 1.2-million square kilometres of land was arable.

Agri SA data further indicates that South Africa had 120 000 farmers in 1994, compared with 37 000 farmers at present. “This dwindling population of commercial farmers supports a population of over 50-million people, of which only 45.6% are considered food secure,” stresses Deloitte.

Further, agriculture’s contribution to South Africa’s gross domestic product has declined from more than 6% in 1980 to less than 3% in 2013, according to the Department of Agriculture, Forestry and Fisheries.

The production of staple agricultural commodities has also decreased in favour of more expensive, luxury food items destined for the export market, while there is stiff competition from cheap subsidised foreign imports, with South Africa’s poultry purchases from the EU and Brazil having doubled between 2008 and 2012.

Van Zyl explains that poor access to finance and a lack of interest from the younger generation are impeding the replacement by new entrants of the country’s commercial farmers, who are crucial to the supply of white maize to many of South Africa’s neighbours.

“The majority of young graduates aren’t particularly interested in farming – they want desk jobs in air-conditioned offices, with medical aid and a pension,” he states.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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