Field crops which, for the purpose of this study, include sugar cane, dominate South African agriculture. This holds true for the area planted, fertilizer use and the total value of production. Maize and wheat alone account for more than half of the area planted, 48 percent of fertilizer use and 39 percent of the total value of production. National average yields of maize and wheat (less than 3 tonnes/ha) are low by international standards. Climatic and physical constraints (e.g. soils) in the arid to semi-arid production regions prevent South Africa from achieving yields attained in e.g. the temperate regions of the northern hemisphere.
Given the constraints mentioned above, South African farmers can be considered to be innovative and efficient, with an ability to survive financially.
With the exception of citrus and deciduous fruits destined for export, crop production in South Africa is destined for the domestic market. Surplus production is vigorously discouraged by GSA; especially since surpluses lead to reduced producer prices and lower farm incomes. Almost two million hectares of maize and wheat have already been taken out of production during the past 20 years in order to bring supply and demand into balance.
Fertilizer demand is a derived demand for food and future growth in fertilizer use depends on this demand. Nearly half of South African households are vulnerable to food insecurity. Growth in the demand for food, and therefore growth in fertilizer demand, has to come from the alleviation of poverty. While poverty alleviation and job creation are important priorities in the government’s agenda, the situation cannot be expected to change rapidly. There are, however, some positive signs, such as recently published unemployment statistics.
Import tariffs for cereals are currently well below bound World Trade Organization (WTO) rates and, with a strong currency, cereal production in South Africa is under pressure from imports. This uncertainty is compounded whenever regional droughts occur and when surplusses are produced. The bigger the surplus is, the bigger is the impact.
In this scenario, current trends in cereal production and fertilizer demand are expected to continue in the foreseeable future i.e. a further reduction in the cropped area, more intensive production in the remaining areas and a stable or slowly growing fertilizer demand.
It would seem logical to assume that by improving the productivity of the subsistence agriculture market, two purposes would be served: (1) alleviating food deficiency at household level of the rural population, and (2) increasing demand for fertilizer as well as other intermediate inputs.
Estimates of the number of subsistence farmers in South Africa range between 1,3 and 3 million, located mostly in the communal areas of former homelands. (Agricultural Abstract 2004, Machete et al., 2004). They produce food mostly for subsistence. Machete et al. (2004) estimates a further 240 000 smallholder farmers who have "emerged" to a higher level of production than pure subsistence, and who provide a livelihood for more than a million of their family members.
Subsistence/smallholder farming in South Africa is saddled with constraints in limited purchasing power, inadequate infrastructure, limited access to support services including effective extension, high input prices and poorly functioning output markets. These have tended to counter balance efforts by many organizations - government, parastatal, commercial producer organizations and the private sector including the fertilizer industry - aimed at increasing the productivity of subsistence/smallholder agriculture. General acceptance of yield enhancing inputs such as fertilizer, hybrid seeds and plant protection products, and application thereof in practice, is still a long way off.
Although these initiatives have not as yet materialized in increasing fertilizer demand, most South Africans would agree that these efforts should continue for the sake of future social, economic and political stability.
