Agriculture Value Chain Series – Producers

  • 08 May 2020
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Producers and agribusinesses have  a very uniquely important role in the value chain in that they are the primary producers of food sources for our country. The restrictions on the economy forced by the lockdown due to the Covid-19 pandemic has worked to emphasise the importance of the agricultural value chain as we have seen government acknowledge the big role that agri systems play in the country. John Purchase poses a question to the panel about their views on how the Covid-19 pandemic will influence the farmers. Pierre Vercueil starts by going into detail about the many negative ways in which the sector will be affected by the pandemic. He mentions live animal auctions and how the market has been affected by auctions not taking place. He predicts some difficulty in the next couple of years, especially for emerging farmers.

Louw van Reenen adds that while we may not have all the answers at the moment, it is vital that we draw from past experiences of hardship to better brace ourselves for what is to come and forecast what we are going to do. He expands on the measures that have been put in place in his business and lets viewers in on how they are making economic preparations in light of what has happened in other parts of the world. “We in South Africa are much more fortunate in that we have been exposed to viruses in many forms so, in terms of the implementing the preventative measures like hygiene and sanitation, we were already ahead in some ways. The challenge comes with having to find new ways to do business without compromising the business.”

Speaking from an agribusiness perspective, Danie Minnaar concedes that we are currently dealing with a beast that we do not know so it is difficult to figure out exactly how best to fight it. He touches on global economic issues that will most likely lead to a surplus of maize for the next years or two. He expresses fears about what will happen if the pandemic reaches the farms and starts to affect farming operations. “At this point, we have to live day to day and make adjustments and decisions on a continuous basis.”

Jaco Minnaar joins the conversation by highlighting that the changing economic situation of some parts of the population may lead to a reversion back to staple food as the population becomes poorer. He explains the factors that will influence the maize and wheat prices and the opportunities that may open up for local production. Jaco enlightens viewers on the effect of the alcohol ban, albeit temporary, on barley hectares that now need to be moved in to other markets. He speaks with the hope that in future, we will see a government being more protective and promoting local agricultural markets.

Jannie de Villiers calls for calm and reminds producers of the virtue that is to be found in not panicking and sticking to the way they have dealt with business in times of rapid change. “This has made us realise how little people know about how value chain works and how the pricing in a value chain works.” He explains the price drops in milk and potatoes and the factors that influence these prices.

The panel covers a range of issues that directly affect food production, food pricing and agribusiness as a whole. The conversation winds down on a positive note with the panellist offering valuable advice on how producers can get through this period. They offer practical solutions to problems that may arise during this period and offer tips on how best to get through it.

In the fifth session of the series, we will be looking at Finances. The discussion will provide an Introduction to the importance of open, competitive value chains and financing in the system, including the extent of primary agricultural debt and the need for insurance.

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