Farm attacks: costs mount

Johannesburg - The South African Chamber of Commerce and Industry (Sacci) said on Tuesday it is becoming increasingly concerned at the cost to the economy of the rising number of attacks and murders on farms in South Africa.

With concerns about food security already prevalent both in South Africa as well as globally, the high rate of attacks on farms can only serve to exacerbate associated risks, it said.

Using the nominal gross domestic product (GDP) figure for 2009 of R2.4 trillion, a 3.22% contribution of agriculture to GDP and an estimate of 39 982 farms in South Africa, the cost of a murder or attack on a farm to the economy is R1.9m per annum. This estimate assumes a permanent loss of the farming unit.

Assuming that there is only a temporary loss of productivity of the farming unit, the loss to GDP is an estimated R161 072 rand per month, Sacci said.

"This is a modest, conservative approach to the impact of farm attacks on economic output. It is by no means a comprehensive estimate of economic impact of the attacks on farms or the direct, indirect and opportunity costs of such farm attacks," Sacci said.

These estimates do not factor in different types of farming, the impact on domestic food security, the repercussions for the competitiveness of the South African agricultural sector, the impact on job security, and the opportunity cost of discouraged potential farmers.

This calculation also assumes that all farming units contribute equally towards GDP and that the attack or murder always results in a productivity impact/downtime at the farm.

"Costs such as these further impede South Africa's currently modest recovery from the global economic crisis. They constitute a hidden, but significant negative impact on small- and medium-sized enterprises in particular, and add to the cost of doing business.

"Sacci believes that it is imperative that the causes of the attacks and murders are immediately addressed, not only on moral and legal grounds, but also in the national economic interest.

"Sacci will engage the relevant authorities towards developing strategies to curtail the alarming trends in relation to attacks on farms," it said.

- I-Net Bridge