Costs increases squeeze commercial farmers

Revenue from crops fell 4.3 percent, but the other branches of farming computed by SSA grew, even if in some instances very little.
Income from animal products rose 4.4 percent, that from horticultural products 2.1 percent and that from animals 1.2 percent. The contribution of crops to total gross farm revenue declined from 23.4 percent to 21.9 percent.

Horticultural products still make up 24.5 percent of the total, animals 40.4 percent and animal products 11.5 .percent.
Electricity costs shot up — from R2.1 billion to R2.8 billion. There was also a considerable increase in expenditure on maintenance and repairs (from R6.5 billion to R7.4 billion). But the cost of fertiliser was down (R7.8 billion compared with R8.3 billion).

Capital expenditure on new assets was lower, but more was spent on land and construction.
The agricultural sector suffered significantly larger losses — R316.5 million compared with the previous year’s R206.9 million.
A farmer’s most valued possessions are his land and buildings. Their combined value is estimated at R81bn. The book value of agricultural assets in 2009 was R118.3 billion.

In 2010 there was a reduction in the book value of vehicles and tractors, in particular, as well as that of other assets. Almost half of farmers’ R64bn debt is short term. Of this, 44.4 percent is owed to commercial banks, 32 percent to private individuals and only 2.9 percent to the Land Bank.
Although the number of jobs in the agricultural sector fell from 874 877 to 866 417, the wages account rose from R13.5 billion to R15.2 billion. — Fin24.