govt 'protects maize prices'

SOUTH Africa's Agriculture Minister said yesterday the country had secured foreign markets to sell the surplus maize of about 4million tons in the 2009-10 season to safeguard maize prices for local farmers.

SOUTH Africa's Agriculture Minister said yesterday the country had secured foreign markets to sell the surplus maize of about 4million tons in the 2009-10 season to safeguard maize prices for local farmers.

South Africa, the continent's largest economy, is also Africa's biggest maize producer and the top global exporter of maize.

The government last month raised its forecast of maize output for the 2009-10 season to 12,96million tons due to higher expected yields. South Africans consume between 8 and 9million tons each year.

Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson said if the surplus was not sold it would "destroy" the country's maize industry.

"We are acutely aware that the (2009-10) surplus production is a double-edged sword that has the potential to depress prices and undermine profitability.

"It is in the light of this that we have mobilised and secured markets with Kenya, the World Food Programme, IFAD (International Fund for Agricultural Development), FAO (Food and Agriculture Organisation of the UN) and Egypt," she said ahead of her budget vote speech.

Maize farmers, expecting to harvest South Africa's largest harvest since 1982, have been lobbying competition regulators to try to keep the country's surplus for export to push up local prices, which have tumbled more than 30percent this year.

The government's harvest estimate was lower than market expectations of 13,03million tonnes. Traders said they expected a big harvest because of good weather across the main maize belt.

Joemat-Pettersson said if the surplus was allowed to affect the country's maize prices it would discourage farmers.

"We have an obligation and responsibility as government to assist our farmers to export the 4million tons of maize," she said.

"If we do not it will destroy our maize industry since farmers will not plant maize during this planting season."

Joemat-Pettersson also announced the creation of a R6billion agricultural development fund with Nedbank, half of which would be invested in the country and the rest in farms across Africa.

She said farming opportunities for South African farmers to grow crops in Zambia, Congo Republic, Egypt, Sudan and Uganda had already been identified.

She said South Africa was in advanced negotiations with Egypt on a joint venture fertiliser project.

"We would like to announce the creation of a R6billion development agricultural fund that has been initiated by Nedbank," she said.

"It will be far-reaching and extensive."- Reuters

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