Agro Perspectiva

Grain SA’s plea to export surplus maize

10.06.2010 13:20 "Agro Perspectiva" (Kyiv) — The South African grain industry is to apply to the Competition Commission for an exemption that will enable it to set up a pool to export 5-million tons of excess maize to the highest bidder. Grain SA, the body representing most of SA’s maize, wheat and soya producers, has asked the commission for an opinion on co-operating on exports, but was informed that setting up a pool would be anticompetitive. The farmers want an urgent solution, given the danger of their produce being wasted because they cannot dispose of all of it in the local market. At present they have 5-million tons of maize available for export after meeting a national demand for 9-million tons. If granted an exemption, the farmers would be given a chance to obtain competitive international prices, which they say would help offset high input costs like fuel and fertiliser. Grain SA chairman Neels Ferreira called for the intervention of the Department of Trade and Industry, saying the application process for exemption, which is run by the Competition Commission, often took up to two years to conclude. «By then it would be too late for almost 30% of our commercial farmers, who urgently need the resources to stay in business, and could completely destroy the black emerging farmers who have loans to service.» The Competition Commission said it would not comment on the issue due «to the nonbinding nature of the advisory opinion» it had given Grain SA. Mr Ferreira said the government should allow alternative ways of utilising surpluses, including reducing the importation of processed chicken in order to encourage local chicken farming by emerging farmers. «This will also create a huge market for the local manufacturing of chicken feed, providing rural development with real jobs.» Maize deliveries to South African silos rose to 1,604-million tons in the week to June 4, up from 944000 ton s the previous week, the South African Grain Information Service said yesterday. Prof Johan Willemse, an agricultural economist at the University of Free State, last week warned the agribusiness congress in the Western Cape to press the government to restructure agriculture policy. He said this would open alternative avenues for farmers, and that the current situation could «seriously damage the industry». Agricultural Business Chamber CEO John Purchase yesterday said the government needed to reopen the debate on the ban on using maize for biofuel, imposed in 2008 when world maize stocks were dwindling and there were fears of compromising food security. Allowing maize to be sold for biofuel use would contribute to SA’s production of oil and also help the country reach its objectives for renewable energy, Mr Purchase said. Grain SA estimates that the renewable energy, or biofuel, option would add 9% to the volume of oil produced in SA, create an extra 39% of protein feed for animal use, and add to the production of commercial carbon dioxide. It also estimates that 105000 jobs could be created by the biofuel process alone.