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Mbuyisi Mgibisa

EMERGING black farmers would not benefit vastly from the production of biofuels in South Africa because they lack resources, skills, infrastructure and technology which are needed in the high-cost biofuels sector.

Some economists and analysts have argued that the biofuels sector would benefit white grain farmers more than black grain producers.

Jane McPherson, programme coordinator of Grain SA’s Farmer Development Programme, concedes that black farmers in SA face bigger production challenges than their white counterparts.

“Many of the black farmers are poor and lack resources,” McPherson said.

But she argues that the development of biofuels production in South Africa will push black farmers out of poverty.

“The one way to keep them poor and without resources is to make grain production unprofitable. One of the major factors determining the profitability of crop production is the price of the commodity – and this in turn is affected by the supply and demand,” she says.

Grain SA has argued that biofuels production would increase the country’s agricultural market and facilitate entry of more black emerging farmers into the mainstream agricultural sector.

“If there is an increased demand for the product the price usually goes up unless the product can be imported more cheaply,” said McPherson.

Grain SA represents about 3 500 grain and oilseed farmers.

McPherson says it’s not clear how many tons of grain are produced and how many hectares of land are being farmed by black grain farmers.

“No one really knows. The information is not available in the industry,” she said.

The SA Biofuels Association (Saba) estimates that there are about 12 million hectares of land available, mostly in the former homelands, that can be used for production through organising emerging black farmers into cooperatives.

National African Farmers’ Union president Motsepe Matlala says there is potential profit to be made by black farmers from the production to the retailing of biofuels.

“We must be very forthright, that biofuels processing and retailing should equally benefit our members the same way it benefits white-owned companies,” he says.

Matlala says black farmers and other agricultural entrepreneurs must participate in the whole biofuels commodity chain.

“As Nafu we will lobby that a percentage of the fuel produced from biofuels should be allocated to our farmers as the producers,” he says.

McPherson says Grain SA’s development programme for emerging black farmers is bearing fruit in different parts of the country.

“One of the agribusinesses in the North West has a project where black farmers are producing grain on more than 22 000 hectares of land and one of their farmers has produced 1 000 tons of sunflowers this year,” she says.

Grain SA says that last year it ploughed R7 million into the training and development of small-scale and emerging black farmers.

The UN Right to Food Programme has accused the developed countries of causing the current food shortages by producing biofuels using food crops.

Last year the US burned 138 million tons of maize and transformed it into bio-ethanol and biodiesel.

Grain SA last week hosted industry players to discuss the government’s decision to exclude maize as a source of biofuels because of food security concerns.

The industry meeting, which was also attended by representatives from labour and government, called on the government to review its decision to exclude maize in the production of biofuels.

“We need to engage the government on whether the decision to exclude maize was based on sound grounds. We hope the channels of communication will be opened,” says Grain SA general manager Kobus Laubscher.

He argues that by excluding maize from biofuels production the government will destabilise the market and force some grain farmers out of farming.

Cosatu deputy general secretary Bheki Ntshalintshali says organised labour was behind the government stance on biofuels. “We support the government decision, but we agree to engage,” he said.

The supporters of biofuels claim that the country’s feed stock and technology can produce bio-ethanol at R2.50 a litre. Industry players estimate that South Africa has a capacity to produce 1.1 billion litres of bio-ethanol a year.

McPherson says the successful production of biofuels is linked to the sustained production of grain by farmers, regardless of colour. She says the success of biofuels in the country depends on profitability.

She also supports the argument that biofuels production will expand the agricultural market in South Africa.

“If the market can be increased by the use of grains for the production of biofuels then it can be said that all farmers will benefit – it is difficult to prove that black farmers would benefit, but it is also difficult to prove that they would not benefit,” she said.

McPherson admits that many developing farmers struggle to get access to production financing.

“This results in thousands of hectares of land in black hands not being in production. The financing of production hinges on the market for the product and the price that will be attained,” she says.

She also argues that the entry of black farmers in the biofuels sector would increase the country’s agricultural market as a whole.

“If the market could be increased, the farmer would be assured of buyers for his product. He could then be in a position to negotiate for a loan and get into production.”

Grain SA senior economist Wessel Lemmer says black farmers lack infrastructure and technology to produce biofuel full-scale. However, he says it is not within Grain SA’s mandate to assist farmers with infrastructure and agricultural technology.

“Unfortunately we cannot give farmers infrastructure and technology because it is not within our organisation’s mandate.

“But we do train farmers on how to use the technology,” he said.

Lemmer says the biofuels sector has very high input costs and that this may hamper the success of black farmers who lack the production capital and high-tech agricultural skills.

Matlala says the production of biofuels will pose major challenges for emerging black farmers.

“The production of biofuels requires massive land and therefore fits on commercial production systems. It is also based on complex and highly mechanised production systems,” he said.

He says it would be difficult for black farmers to produce on full scale and compete with their white counterparts because of disparities in the agricultural sector.

“The black farmers face numerous challenges such as inadequate land, poor skills to produce and lack of financial resources.

“This is in addition to infrastructural bottlenecks in the former homelands, lack of technological innovation and poor market information,” he said.

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