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Support New Farmers - AGRA

2005-12-06  Staff Report 2

Support New Farmers - AGRA
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"By Wezi Tjaronda WINDHOEK UNLESS upcoming farmers get the necessary tools to be productive in their farming business, pensioners and part-time farmers may make up the majority of commercial farmers in the near future. The situation at the moment is that aspiring commercial farmers are given loans for buying farms, which exclude cattle and infrastructure finance, making it difficult for them to make a decent living out of farming. To make a success in farming though, Agra says people should be given land, operational assets as well as infrastructure finance. Unlike part-time farmers who have an additional income, and pensioners who have accumulated savings, full-time farmers are increasingly finding it difficult to face the challenges on the farms. Agra Chief Executive Officer Peter Kazmaier told New Era that the ideal situation would be to have more full-time farmers, who would utilise the land more productively, than part-time farmers. ""As a country, one would want farming to be productive,"" Kazmaier said. Agra's annual report also notes that there is increasing pressure on commercial livestock farming, especially on cattle farming due to limited scale benefits. This has made it necessary for farmers to diversify their activities in order to stay afloat. ""The reason being that they would be able to rely on other streams of income not generated by the farming operations,"" he said. For instance, Kazmaier said farmers were going into tourist guest farms, trophy hunting, game farms, charcoal production and stud breeding as part of the diversification. He explained that opportunities for scale benefits were limited because apart from requiring extensive areas due to climatic conditions and rainfall patterns, meat prices have also remained static over the last few years. At the same time, input costs, especially fuel, have continued to increase. Although the country is now seeing a situation where weaned calf prices have increased tremendously because of a shortage in South Africa, arising from a Foot and Mouth outbreak in Brazil from where the neigh-bouring country was importing weaners, this situation appears to be short lived. According to the Agra CEO, weaner prices have also shot up because of overproduction of maize in South Africa and the resultant low maize price, as maize is the main ingredient used by feedlots to get animals ready for the market. ""These high prices should be seen as an abnormal windfall for Namibian producers,"" he said. This has however led to many weaners leaving the country, meaning that ox production might be negatively affected in future. The report for the financial year ending July 2005 indicates that Agra increased its gross profits by 4 percent for the group to N$74 million and by 1.2 percent for the cooperative to N$67 million. In 2004, the profits to the group were N$71 million, while that of the cooperative was N$66 million. The gross value of livestock transactions (excluding karakul pelts and wool) for the year ended July 2005 amounted to N$432 million compared to N$374 million in 2004. The cooperative attributed the increase to the number of heads of cattle marketed as well as the actual Namibian dollar value achieved per animal marketed. Agra also registered a decrease in the retail division of N$24 million (from N$328 million in 2004 to N$304 million in 2005), due to the transfer of its wholesale division to a separate company, Aus Wholesalers. Agra has also seen the closure of four of its branches last year because the economic activities of those branches did not warrant keeping the business places open. This in some cases resulted in the loss of jobs. However, the uncertainties arising from the land reform programme have also affected the spending patterns as well as investments made by the members of the cooperative. Due to lack of security, many commercial farmers have stopped making investments on their farms that bring long term benefits such as drilling boreholes, maintaining quality cattle heads, debushing and dividing their land into camps. ""Land reform frightened farmers to an extent that for a month or two, they did not make purchases,"" said the CEO, adding that the situation has now changed because they have made peace with it and have also come to realise that if they do not maintain their cattle heads, they would end up being adversely affected."
2005-12-06  Staff Report 2

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