SA commercial farmers feel the squeeze

Current revenue was 3.1% up at R89.2bn, according to the latest figures from Statistics South Africa (SSA).

According to Fin24, revenue from crops fell 4.3%, but the other branches of farming computed by SSA grew, even if in some instances very little income from animal products rose 4.4%, that from horticultural products 2.1% and that from animals 1.2%. The contribution of crops to total gross farm revenue declined from 23.4% to 21.9%. While the cost of fertiliser was down (R7.8bn compared with R8.3bn), electricity costs shot up - from R2.1bn to R2.8bn. There was also a considerable increase in expenditure on maintenance and repairs (from R6.5bn to R7.4bn). Although the number of jobs in the agricultural sector fell from 874877 to 866417, the wages account rose from R13.5bn to R15.2bn.

Capital expenditure on new assets was lower, but more was spent on land and construction. The agricultural sector suffered significantly larger losses - R316.5m compared with the previous year's R206.9m. The combined value of land and buildings - a farmer's most valued possessions - is estimated at R81bn - compared with R118.3bn in 2009. 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% is owed to commercial banks, 32% to private individuals and only 2.9% to the Land Bank.

Read the full article on www.fin24.com.