Our contribution to a more stable agricultural environment

Published: 6 February 2020

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Jannie de Villiers
CEO, Grain SA jannie@grainsa.co.za

Last month I wrote about how instability or stability can let one’s emotions see-saw between feeling angry and flourishing. In 2020, Grain SA is focusing on creating more stability for our grain producers so that the industry and the producer can flourish.

There is a long list of things that cause instability about which we can do absolutely nothing, but we are not wasting time and energy on these. Although rain is very high on the list of destabilising factors, there is relatively little we can do about it. Nevertheless, our task in this regard is not minor, as stability and predictability go hand in hand.

Apart from the weather, the markets and prices are as unpredictable. Yet, with good market information and expertise one can produce analyses, and with the aid of hedging, you can then reduce the risks of this unpredictability. If all our market information (JSE, SAGIS, crop estimates and supply and demand figures) is reliable and transparent, it contributes to stability – even if the predictions the information is used for are not always that accurate. The grading regulations for grains and oilseeds contribute to stability in trading and assure buyers of the quality of our products.

Monitoring the quality of fertiliser is Grain SA’s attempt at ensuring that the contribution made by fertiliser with respect to yields is more credible. Seed quality and data are monitored by way of cultivar trials, and yield competitions help to confirm the potential of cultivars. Our collaboration with the Registrar of Act 36 who controls the registration of new chemicals contributes to ensuring that our producers have access to the most up-to-date technology possible. The fact that every Tom, Dick and Harry cannot sell just any product to producers also promotes stability. The diesel rebate is one of the areas on which Grain SA spends considerable time and energy to ensure that producers can claim their rebate, but also to ensure that the requirements and regulations for claiming it are predictable and stable.

One area in which South Africa can improve considerably, is the instability caused by our policy environment. Here the inputs of organised agriculture and our relationship with the government play a decisive role. However, our policy environment is politically loaded and contributes a large measure of instability. Eskom’s load shedding is certainly one of the best examples at present of how instability can make people negative and angry. The negative impact on investments and economic growth is difficult to quantify, but there is no doubt that it has a significant influence on the general sentiment.

An aspect Grain SA works very hard at, is being and remaining a reliable mouthpiece for grain producers. This involves clean audits and good corporate governance of the processes and funds entrusted to Grain SA. Our credibility and the responsible manner in which we communicate with the media can easily lead to instability. Even changes in leadership can lead to instability if proper succession is not in place and there are no processes and policies to manage the transition.

People who are angry (because of instability) become irrational and then take to the streets to demonstrate, or they express opinions on social media that just cause more instability. This type of pressure, in turn, leads to politicians who change policy (or even the Constitution of the country) out of hand – leading to greater uncertainty. Grain SA therefore aims to make sure that whatever we do in 2020 on behalf of grain producers, will contribute to a more stable environment so that things become more predictable and growth can flourish.