Farming in crisis as slump hits Western Cape

Many sectors of Western Cape agriculture are in crisis and this is sending shockwaves through the regional economy.

The deciduous fruit sector has been hit hardest, with estates up for sale for a fraction of their worth, workers being laid off and farmers and banks taking losses of millions.

Lower-grade white- and red-wine estates, some wheat farms, poultry farms and citrus estates also have been badly affected by a combination of problems including over-production and weather woes.

Farms in the province contribute about six percent to regional economic output and and nine percent to Western Cape employment opportunities.

They also provide 55 percent to 60 percent of agricultural exports, so problems in this sector affect local and national economies alike.

The chief executive officer for Agri West-Cape, Carl Opperman, said the failing deciduous fruit industry and the other problematic sectors were a disaster for job creation and the rural economy of the Western Cape.

"It's a crisis," he said. "What is happening to the deciduous fruit industry is affecting the total rural economy of the province.

"The deciduous fruit industry is one of the major suppliers of jobs and foreign exchange. It creates wealth in the value chain and is a major supplier of buying power in the rural areas."

He said Ceres, Grabouw, Piketberg and Elgin had felt the negative effects of farms closing, being liquidated or trimmed down.

It had been shown that a five percent decline in agricultural export from the province meant 22 500 jobs would be lost on farms, in warehouses, factories and even in harbours.

"I'm panicking. I believe the effects of what is happening to the deciduous fruit industry are threatening the livelihood of rural towns."

William Thomas, provincial secretary of the Food and Allied Workers Union, said many farmworkers had lost their jobs in the past year or so, and had to move off the land.

He said the union would hold a summit in April and the farm crisis would be a major topic of discussion.

"In the Ceres and Grabouw areas there is a serious problem. Farmers claim they can't continue without assistance from the government.

"Hundreds of workers have lost their jobs in the Western Cape and many of them have had to leave the farms on which they've worked and lived for many years," he said.

The managing director of the New Farmers Development Company, Hannes le Roux, said the biggest problem in the deciduous fruit industry was apples and pears. There were 22 000ha under apples in the province but "worldwide over-production".

"Many smaller farms are going bankrupt. Grabouw and Elgin have about 90 fruit farms and as many as two-thirds of them were on the market last year, going for prices of about 25 percent of what they would have fetched some years ago."

Wolfgang Thomas, the chief economist at Wesgro, the province's trade and investment improvement organisation, said many banks were sitting on properties that had been liquidated because there were no buyers.

Several factors had influenced the decline of the province's deciduous fruit market and other agricultural areas.

These included the fact that European Union buyers wanted apple types we did not grow, three years of drought, an over-supply of certain fruit and wheat products and cheaper white wines, increases in input costs, over-capitalisation, the declining rand, the move from a single marketing channel to an open system and under-skilled labour.

"But remember, this is crisis not a crash," he said. "Rooibos, olives and good red wine are all doing very well."

Johan van Wyk of the Land Bank said: "It's in crisis, but it is not one that we can't overcome. Farming is like this, we get cycles, highs and lows."