Drought scares farmers from BAMB's sweetened deal
Mbongeni Mguni | Friday March 22, 2019 13:20
For farmers, the BAMB’s contracts are a type of hedging or security, offering a guaranteed market and price for their produce, while it is in the ground. The scheme is open to those producing five tonnes or more of sorghum, maize, cowpeas or beans.
Last season, more than 400 farmers participated in BAMB’s contract farming, but this year, the numbers are down to just 177. This is despite the BAMB offering contract farmers a premium on the South African benchmark prize called SAFEX. Producers of white maize under contract farming for this season will receive P2, 500 per tonne, compared to about P2, 300 on the SAFEX benchmark.
In addition, for the first time ever, in the event of crop failure, BAMB will buy whatever the farmers produce, stalks and all, in order to both start up a national livestock feed industry and also to support farmers in the era of climate change.
So why are farmers not tripping over each other for the lucrative contracts?
“Last year was a drought again and farmers have not recovered,” explains BAMB CEO, Leonard Morakaladi.
“Farmers use credit to farm and they already suffered losses last year.
“It’s difficult for them to farm again this year.”
Are the thresholds perhaps too high for farmers, given the repetitive droughts?
“You can produce two and a half tonnes per hectares and with two or three hectares in hand, no it’s not too high. Even with two hectares you can produce that minimum (of five tonnes),” Morakaladi says.
Usually, most of the farmers who take up the contracts are in the handful of higher production zones around the country, including Pandamatenga, Barolong, Moshupa, Molepolole, Kanye and Tutume.
However, successive droughts from 2014 onwards, only broken by the Cyclone Dineo deluge in 2017, have broken the back of local cereal production.
Each cropping season since 2014 has been affected by either the late onset of rains, a mid-season dry spell or both, leading to poor harvests and losses, both to individual farmers and government, which spends more than P600 million each season subsidising local communal farmers.
The 2018/19 season is no exception.
“If you go to Mosisedi right now, you’ll find stunted crops,” says Morakaladi.
“They have not grown, waiting for the rain.
“They have made an effort and we are trying to encourage them.”
The CEO explains that for the first time, BAMB will buy whatever the farmers produce, even if it is failed crop, in order to start up a national livestock manufacturing value chain and also support the battle-weary farmers.
“For the first time, we are saying whatever they produce, they bale it and we process it into cattle feed, so that they also recover something.
“We want to buy everything, even lower grade crops, to start manufacturing feed. For some farmers, the crop does not come out well or mature properly, but we will take it anyways.
“There will be a lot of things in this coming financial year.”
Farmers need all the help they can get.
At Mosisedi Farms, farmers have planted a total of about 3,500 hectares, out of the 9,000 or so available for crops. Quett Rabai, chairperson of the Mosisedi Commercial Farmers Association, which is one of the biggest in the south, says the situation is dire.
“Crops have died in the sun, those planted in December, those from February, they have all died from the heat.
“The annual rainfall so far has not even reached 70 millimetres, when it should be between 200 and 300 millimetres.
“During Cyclone Dineo, we had days when we would receive 70 to 80 millimetres per day. This 70 millimetres means days of three and four millimetres on average.
“With temperatures of up to 40 degrees, the crops have died,” he says.
The chairperson says farmers in the area giving up and moving off their fields.
“If you get a loan for P1 million, after the harvest, by September, you have to pay it.
“If there’s no rain, you still have to pay that somehow and also get more money for inputs for the next season.
“Most of the farmers are beginning to withdraw because they are trying to manage their debts.”
While the full scale of this season’s drought will be known by the end of next month, everyone is bracing for the worst.