South African farmers may seek international aid as the worst drought in decades threatens a regional food shortage, according to a farmers’ group.
Farmers need as much as 20 billion rand ($1.27 billion), an estimate that will be revised after a more detailed industry assessment is completed at the end of this month, Omri van Zyl, executive director at Agri SA, said in a phone interview.
We need to look at direct assistance to farmers “just to keep the doors open on their businesses,” said van Zyl, adding that support is needed to provide feed and help with credit in the next planting season. “It’s a food security issue.”
South Africa, which provides more than 60 percent of the wider region’s food, is suffering the least rainfall since 1992 amid an El Nino that is one of the three strongest since 1950. The impact on grazing and food crops is now “cutting into the muscle” as it spreads to commercial farmers from small holders, van Zyl said.
Assistance will initially be sought from the government, which has already provided aid to small farmers. South Africa in November added 96.6 million rand to 352.6 million rand set aside to support the nation’s drought-relief efforts.
“From a regional perspective, we’re going to look at donor agencies,” according to van Zyl, who said such a move would be unprecedented.
“In the region, the commercial farming sector has been a stable source of quality and nutritious food to the whole region and if we are battling a bit here because of the drought, the rest will definitely follow,” he said.
In the meantime
The value of South African assets abroad outstripped foreign investment into the country for the first time on record — thanks to the rand’s slump.
The difference between South African foreign assets and liabilities swung to a surplus of 113 billion rand ($7.2 billion) at the end of September from a deficit of 131 billion rand at the end of June, the central bank said in a statement on its website on Dec. 31. That’s the first positive reading since the Pretoria-based bank began recording the data at the end of 1956.
“The volatility and decline in domestic and global equity markets as well as the significant decline in the end-of-period exchange rate of the rand resulted in a respective modest decline in foreign liabilities and a substantial increase in South Africa’s foreign assets,” the Reserve Bank said.
The rand plunged 25 percent against the dollar last year, the worst performance after Brazil’s real among major currencies tracked by Bloomberg. The South African currency has been under pressure because of a slump in commodity prices, lackluster economic growth and rising interest rates in the U.S. It fell to a record low of 16.0543 against the dollar in December after President Jacob Zuma unexpectedly fired his finance minister.
The rand fell 1.1 percent against the dollar to 15.8092 against the dollar as of 1:06 p.m. in Johannesburg on Wednesday.