A high-level engagement between leaders of Grain SA, African Farmers' Association of South Africa (AFASA), Minister of Agriculture, John Steenhuisen, and major agricultural banks highlighted challenges faced by farmers at Nampo, the largest agricultural exhibition in the Southern Hemisphere near Bothaville on Wednesday.
Image: Yogashen Pillay
South Africa’s grain producers are facing mounting financial strain as soaring input costs, weak commodity prices and growing debt pressures squeeze profitability across the agricultural sector.
Industry leaders warned during a high-level engagement this week at the NAMPO Harvest Day exhibition near Bothaville in the Free State province.
Leaders from Grain SA, the African Farmers' Association of South Africa (AFASA), major agricultural banks and Minister of Agriculture, John Steenhuisen met to discuss growing concerns over the sustainability of grain farming and the future of agricultural financing in South Africa.
According to Grain SA, fertiliser and fuel costs now account for nearly 45% of total production expenses for many grain farmers, with fertiliser prices in some instances having surged by as much as 80%.
Grain SA chairperson Richard Krige said producers are under severe pressure as margins continue to narrow.
“Input costs, financing costs, and logistics pressures continue to squeeze margins at a time when grain prices remain under pressure. These realities require urgent collaboration across the value chain if we are to protect long-term food security, investment, and rural economic activity,” Krige said.
The talks also focused on concerns surrounding the D11 directive and its implications for agricultural financing and debt restructuring.
Grain SA said the engagement resulted in agreement to continue discussions with National Treasury over the practical impact of the regulatory framework on farming businesses.
Industry stakeholders and banks agreed that agricultural financing models need to better reflect the seasonal and cyclical nature of farming production systems.
Steenhuisen said agriculture remains one of South Africa’s strongest economic sectors and continues to play a critical role in exports, employment and food security.
“Agriculture remains one of the most bankable opportunities in South Africa,” added Steenhuisen.
He added that government would continue working with the agricultural sector and financial institutions to help producers navigate current market pressures.
“The government would continue working with industry stakeholders and financial institutions to support the sector through current market pressures,” he said.
“Agriculture is increasingly receiving the strategic attention it deserves as a driver of economic growth, exports, and job creation in South Africa.”
Steenhuisen also highlighted efforts to expand international market access for South African agricultural exports amid growing global demand for local products.
“There is growing international demand for our agricultural products, and we are working very hard as a department to open up those markets because that is where the premium lies for South African producers,” he said.
Meanwhile, Grain SA stressed that export growth, improved logistics and stronger domestic demand channels are now critical priorities for the sector, particularly as grain surpluses place additional pressure on prices.
The organisation said it continues advocating for improved rail and port performance, stronger export competitiveness and the removal of phytosanitary and regulatory barriers limiting access to global markets.
A major focus at NAMPO has also been Grain SA’s “grain on legs” strategy, which seeks to expand domestic livestock, feed and protein industries to create higher-value uses for grain before export.
Krige said when logistics systems are constrained, we must not only ask how to move more grain - we must ask how to move more value.
“The protein economy creates opportunities for additional demand, more jobs, stronger rural industries, and improved resilience across the agricultural value chain,” he said.
Grain SA also believes biofuels could become an important new demand channel for local grain producers while supporting industrial development and energy diversification.
Krige said biofuels should be viewed as part of a broader market-development strategy that includes food, feed, fuel, and industrial uses.
“South Africa must continue exploring practical opportunities that create sustainable new demand for grain production,” he said.
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