All data is delayed
See More

SA farmers lack competitiveness: PwC

Feb 01 2011 15:19

Johannesburg - Local farmers are not internationally competitive and not generally profitable, shows a survey released on Tuesday by PricewaterhouseCoopers (PwC).

"Due to the strength of the rand and the support schemes that agricultural producers in developed countries enjoy, local agricultural producers find themselves in an uncompetitive position," PwC said in its sixth Agribusinesses Benchmarking Survey.

"Together with these factors, the devastating effects of the worldwide financial crisis and the consequent economic recession have also had adverse effects on the agricultural industry."

PwC said this was aggravated by the over-production of grain.

The initial high input costs of producers had been followed by a sharp decline in product prices.

The survey, which looks at the period from March 2009 to September 2010, found that the profitability of agribusinesses over this time declined by 19%, compared with an increase of 53% in the previous period.

Trade turnover declined by 4%, compared with an increase of 11% in the previous period.

Grain transactions decreased by 11%.

Agribusinesses were also negatively affected by the drop in commodity prices, which led to stock write-offs and falling turnover.

As farmers had less purchasing power they were forced to curtail their capital expenditure programmes, which caused tractor and implement sales to fall considerably.

PwC said the "most important single pointer in the survey is the growth in the agribusinesses' debtors' book" and its financing.

"Of extreme concern is that due to the growth in farmers' debt levels, agribusinesses were compelled to take on additional financial commitments and even consolidate them into long-term debt.

"Long-term facilities are thus being used to finance the short-term debt of producers," said the compiler of the survey, Kobie Bekker, of PwC and national leader of the Agri Industry Group.


pwc  |  agriculture  |  farming



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote