On Friday 15 February TLU SA sent a letter to the Banking Association of South Africa (BASA) to request a discussion about the sustainability of the agricultural production of the country.
“We are very concerned about the dire and prolonged financial situation many of our agricultural producers are facing,” says Louis Meintjies, President of TLU SA. “In the last few years we have seen continuous extreme climatological circumstances in certain districts which puts the profitability of producers under tremendous pressure.”
He says that the country is busy losing some of the best farmers in the world because of this situation which is completely out of their hands.
“The way in which agriculture is structured puts the risk of the production process firmly on the primary producer (the farmer),” he explains. “They have to put their land up as security to get financing. But when there is no income because of something like drought, they carry the risk alone. After a few years of crop failures, the situation becomes intolerable for the farmer. They stay in debt with the financial institutions and input companies.”
TLU SA requests BASA to agree to a conversation to discuss the survival of producers in difficult times.
“TLU SA is of the opinion that the entire value chain should share in the risk,” Meintjies says. “In good times such an agreement could be beneficial to all the involved parties while it would help producers to stay in production during challenging times.”