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Posted on Thursday, 05 September 2013 16:26

Rearing South Africa to feed itself

By Gregory Mthembu-Salter

beefSouth Africa is cattle country. It consumes an estimated 815,000tn of beef a year, 16kg per South African. This is nowhere near enough to put South Africa in a global top 10 for beef consumption – Uruguay, the world's top beef consumer, works its way through a staggering 60kg of beef per person per year – but it is the highest beef consumption level in Africa.

 

 

The last national census for cattle was 10 years ago, so how many there are now "is anyone's guess", says Gerhard Schutte, the chief executive of South Africa's Red Meat Producers' Organisation (RPO).

"We should also bear in mind that around 40% of the national herd is in the old homelands, in the hands of emerging producers. And there, the truth is we still don't know very much. How many cattle are there? I can't tell you. We still don't really understand the emerging farmer."

Mohammad Karaan, the dean of agriculture at Stellenbosch University and the first non-white, non-Afrikaner to hold this position, says that there are two major trends affecting the industry: big commercial farmers are getting bigger, and subsistence farmers are becoming fewer.

"There are about 30,000 white commercial farmers in the country. There are 300,000 mainly black people who have more than half an acre, but half those farms are really tiny. How many black commercial farmers are there? Possibly, 5,000 maximum."

One of these new black commercial farmers is Aggrey Mahanjana, the managing director of the National Emergent Red Meat Producers' Organisation (NERPO). Mahanjana farms cattle on the historic Carnarvon Estate, 50km from Queenstown in the Eastern Cape.

Thomas Henry Halse of Penzance first acquired the farm and settled there in 1820. Around 25 years later, the area was engulfed in the Seventh Frontier War, one of a series of nine colonial wars fought between the Xhosa and British imperial armies.

Halse kept the farm and it remained in the family for another 160 years, until 2008, when it was sold to the government. The following year, the government leased it to Mahanjana as part of the land resettlement programme.

EMERGENT FARMERS

Mahanjana has around 400 head of cattle and 1,300 sheep.

He sells his seven-to-nine-month-old calves to feedlots, which are large-scale operations where cattle are fed until ready for slaughter.

"My mother was a teacher in farm schools around Bathurst and Port Alfred. When I was young, I went with my mother and I would see these white farmers. We thought they were rich because we saw all these trucks going in and out. My dream was to be like that Mr Green. I didn't know then that all these things I saw on his farm weren't really his. It was all a loan from the bank."

NERPO wants the government to become the lender of first resort, providing start-up loans for farmers.

The organisation says these should be loans without interest, to be used to buy farm machinery and livestock.

The lender of second resort could be the farmers' co-operatives, which should be able to lend with very low interest rates, while commercial banks could serve as a last resort.

In late May, NERPO met with Lungisa Fuzile, the director general of the national treasury, who Mahanjana said told him to submit the proposal after first securing the backing of the ministries of agriculture and land affairs.

Last year the Land Bank, a state-owned development bank, set aside R700m ($69m) for loans to emergent farmers.

The bank initially sought to charge interest rates of up to 10%, but following lobbying by NERPO, the government agreed to subsidise the interest rate, bringing it down to 4%.

The move, said Mahanjana, was helpful to newly established black commercial farmers.

South Africa imports roughly 100,000tn of beef a year, mainly from neighbouring Namibia and mostly as young calves destined for the country's feedlots.

According to Harald Marggraff of the Namibia Agricultural Union:

"In Namibia, we export 80% of our beef. We don't have feedlots here because it's a very dry country, and we don't produce enough grain. For every kilo of meat, we'd need to import seven kilos of maize. So instead, we export weaners to the South African feedlots. At the same time, we are proud of our veld (pasture)-fed beef. There are no hormones, no growth promoters or anything. And our beef is completely traceable from farm to fork. It is not organic, as our animals need a bit of lick to get enough urea, but we do market it as 'natural fed."

FARMLAND SHRINKING

Mike Wiechmann is a farmer near Windhoek in Namibia, with 1,300 head of Simbra cattle.

"We used to sell to the South African feedlots, but we don't any more. We access the European Union (EU) market, and they don't allow hormones, which they use in South Africa. In South Africa, the feedlots also use a lot of chicken manure, and that is against EU standards. Basically, South African meat is filled with things Europeans don't want to touch. So on our farm, we bring the cattle up to the time for slaughter ourselves. Then the prime cuts go to Europe, and the rest is sold to South Africa."

South Africa's beef exports are unable to access the EU market not only because of hormone inputs, but also foot and mouth disease, which is endemic in the country.

Both the RPO and NERPO accuse the government of worsening the situation by failing to implement the law on cattle vaccination and by failing to contain outbreaks of the disease, particularly in former homelands.

Demand for beef in South Africa is rising, with some experts estimating that domestic production will need to climb by 20,000-30,000tn per year for a decade to meet it.

Yet at the same time, the land available for commercial beef farming is shrinking. One factor is land reform, which has in many cases led to the conversion of commercial farms to subsistence production.

Another, according to the RPO's Schutte, is the rise of game farms. "The game ranching industry has gone very far. I reckon that 17% of South African territory is now game farms. That is a structural change. So, inevitably, the percentage available for cattle has gone down."

The likely consequence of rising domestic demand for beef and dwindling acreage for cattle farms is more feedlots, which already supply an estimated 75% of the domestic market.

Bennie Welgemoed is the re- search and development manager at Karan Beef, South Africa and the continent's largest feedlot. Karan Beef is based in Heidelberg, 50km southeast of Johannesburg, and feeds 120,000 cattle until slaughter.

He says: "If you want to feed 40-50 million people, of which half want meat [...] to rear that amount of beef on pasture is impossible. To put you in the picture, if I want to breed the stock for this feedlot, I will need a farm as big as the Free State. Now Karan Beef is only 35% of the market [...] so to supply demand you will need four more Free States. How are you going to do that? Where are you going to get all this beef from?"

AFFORDABLE MEAT

Defending the South African feed- lot industry's reliance on hormones, Welgemoed said:

"The whole issue is tied up in a trade war between the Americans and the Europeans. We know the EU banned hormones to justify getting American beef out of their system. But all the hormones we use have been rigorously tested and proved safe. In South Africa, we use the American system, which allows minimum levels, not the European one that doesn't allow it at all."

He said Karan had offered hormone-free beef to major retailers for an extra 10% to cover the extra time spent by cattle in the feedlot because of their slower growth: "They all just turn away. It puts an extra R2 per kilo on the price, and the customers don't want to pay it."

Schutte said most red meat in the country is consumed by people earning R3,500-4,000 per month and who cannot afford the price premium: "Those who are looking for organic, pasture-fed and so on are maybe 6% of the market. That is why there was very little South African response to the horsemeat story. Our red-meat eaters are just not following stories like that."



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