South African farmers may face severe financial constraints

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In drought-stricken regions such as those in the North West, Free State and Kwa-Zulu Natal provinces, farmers are exposed to severe financial losses which have made it very difficult for them to operate their businesses sustainably or to meet their obligations to financial institutions.

These financial institutions may in turn limit production credit for the coming season which means that in the season to come, farmers will face severe financial constraints coupled with inadequate water resources. Möller warned that, left unmitigated, these factors would result in lower crop production, labour shedding and rising food prices as has been the case in this year.

"This is a serious situation and we call for urgent interventions to lend assistance to affected farmers, both established and emerging", said Möller. Agri SA has been closely monitoring climatic developments and has already begun a process to engage with financial institutions, agricultural industry representatives, government stakeholders and disaster risk specialists.

Möller expressed that through this process, Agri SA aimed to reach a solution that would enable the continuation of a vibrant agricultural sector. "While we acknowledge current fiscal constraints, we urge government to prioritise disaster relief to agriculture as a mechanism of enhancing food security and promoting prosperous rural economies", expressed Möller.