Decaying infrastructure: a growing threat to South Africa's producers

South African farmers can be counted as some of the most efficient producers of food and fibre in the world; however, the deterioration of the country’s infrastructure has eroded their competitive edge, according to Francois Strydom, chairperson of Agbiz. He spoke to Annelie Coleman about some of these challenges, and the possible solutions.

- Annelie Coleman

You previously said that the moment South African crops exit the farm gate, our producers find themselves at a serious disadvantage. Please explain.

The on-farm efficiency of South Africa’s producers is rated among the top 10% in the world, based on international production standards and covering a wide range of commodities. South African maize farmers are an example of this, producing on average more than 12,5kg of maize per 1mm of rainfall.

This efficiency, however, has been considerably eroded by the severe deterioration of infrastructure in the country. Examples include poor or non-existent state support through subsidies, a near-total collapse of the railway system, power supply challenges, road maintenance issues, capacity problems at harbours, safety and security challenges, corruption, and public unrest and looting.

All of this results in a cost-plus effect for the farmer, storage operator, transporter, and trader, as well as the rest of the value chain. It causes a marked decline in the country’s free-on-board competitiveness [whether the seller or buyer is responsible for damage of the goods in transit] .

Despite the excellence of South Africa’s maize producers, for example, the sector’s competitiveness is much lower than that of other maize-producing countries. Keep in mind that the first ton of maize that is exported has an impact on the price of the entire harvest, not just the portion earmarked for export.