AGRICULTURAL NEWS - Demand for the Land Bank's drought relief concessional loans is surging as the record-breaking drought conditions continue to cause widespread devastation to agriculture crops and livestock.
The state-owned land and agriculture bank raised the concessional loans from the Industrial Development Corporation (IDC).
With five out of the nine provinces declared disaster areas and certain areas within the other provinces declared disaster zones, farmers in these provinces are clearly showing signs of distress if the demand for loans is any indicator.
Speaking at a forum on the sidelines of Nampo Harvest Day 2016, Sydney Soundy, executive manager, Commercial Development Banking said, “Currently, Land Bank has received applications for loans amounting to just under R200 million.”
“While these applications have not been approved yet, as they are still going through the Bank's assessment, due diligence and will be granted in accordance with applicable legislation such as the NCA, the demand gives a glimpse into the bleak future," Soundy says.
Earlier this year, Stats SA released gross domestic product figures showing three consecutive quarters of steep decline in agricultural activity. In the third quarter of 2015, the sharp decrease was mainly a result of falling production in field crops, such as maize, sunflowers, and sugar cane.
Food inflation on an upward trend
As yields of these crops shrivel under the dry spell, they will more than directly impact on food prices and are more than likely to be passed on to consumers.
“While these applications have not been approved yet, as they are still going through the Bank's assessment, due diligence and will be granted in accordance with applicable legislation such as the NCA, the demand gives a glimpse into the bleak future," Soundy says.
Earlier this year, Stats SA released gross domestic product figures showing three consecutive quarters of steep decline in agricultural activity. In the third quarter of 2015, the sharp decrease was mainly a result of falling production in field crops, such as maize, sunflowers, and sugar cane.
Food inflation on an upward trend
As yields of these crops shrivel under the dry spell, they will more than directly impact on food prices and are more than likely to be passed on to consumers.
According to Stats SA’s Consumer Price Index, South African consumers paid approximately 10% more for the basket of groceries in March 2016 than they did in March 2015. This rise is the highest monthly year-on-year rise in food price since February 2012.
Food inflation has followed an upward trend since November 2015, with year-on-year figures of 4.8% (November), 5.8% (December), 7.0% (January), 8.8% (February), and 9,8% (March).
