Several banana farmers in the country are switching to macadamia farming, an industry which some believe offers slightly higher profit margins and is less wobbly.
For KwaZulu-Natal in particular, the demand for bananas has been impacted by competing countries such as Mozambique and Swaziland, which is both banana-growing regions.
According to James Miller, chairman of the KwaZulu-Natal Banana Company, there is worldwide a growing demand for macadamia nuts. This demand has seen a number of South African farmers shift to macadamia nut farming, including him.
Conversions happening thick and fast
The demand patterns have seen him convert 50% of his farm to macadamias, keeping the remainder as a banana plantation. Miller said if farmers are not exclusively changing to macadamia production, then they are combing with other agricultural produce.
“Around 80% of banana farmers by volume on the KZN South Coast are members of the KwaZulu-Natal Banana Company. Most of these farmers have planted sections of their farm to macadamia nuts,” explained Miller.
Macadamias have a very high international demand which makes them more profitable. Although banana farming is more labour-intensive, the skill set required for macadamias is much higher, he added.
The demand for KZN bananas has been impacted by competing countries such as neighbouring Mozambique and Swaziland which both grow bananas. The ongoing Russian-Ukraine war has also led to increased input costs with fertiliser prices doubling.
A growing industry
Macadamia research undertaken by the International Nut and Dried Fruit Council (INC) shows that between 2012 and 2022, global tree nut production grew at an average annual rate of about 229 221 tons year-on-year.
According to the South African Macadamia Association (SAMAC), the 2023 crop of 81 556 tonnes is 18.5% higher than the 2022 crop of 68 840 tonnes. Also, compared to the 2022 crop, the industry’s production increased by 12 716 tonnes in 2023.
“Despite the difficult market conditions being experienced, the silver lining remains that South Africa is still the largest macadamia-producing country in the world,” SAMAC said.
Macadamia producers put the 2023 crop estimate at 94 272 tonnes, signalling great investment opportunities.
South Coast boom
According to South Coast Tourism and Investment Enterprise (SCTIE), the macadamia industry has had a marked effect on agriculture along the South Coast. This has prompted investment in companies that provide fertiliser, pesticides, equipment, security, and processing plants.
And although the national markets are over-supplied, the demand for locally produced goods means that local retailers and restaurants on the KZN South Coast are considering local farmers.
The South Coast is renowned for its banana production, and SCTIE believes that the growth of the macadamia nut sector is bringing with it job creation and investment opportunities, with the domestic and international export markets primed for these quality-grown products.
‘Macadamias are more forgiving’
Macadamia farmer Gene Likhanya reckons more banana farmers could transition to macadamia for several reasons. “Either because the banana farms have exhausted their own lifespan and they’re looking to plant something new.
“Macadamias probably offer farmers a longer, more sustainable and balanced risk solution, compared to bananas. Bananas are extremely labour-intensive and costly to farm. Macadamia’s profit margins are slightly greater than bananas,” he said.
Making matters worse is the pressure coming from Mozambique. The country has increased their banana plantings by thousands of hectares over the past few years and they are busy suppressing the South African market because of that, Likhanya said.
Patience required for new farmers
He, however, warns that it takes new macadamia farmers a while before they start seeing profits. Only after year four or five, will new macadamia farms start seeing a return on investment.
“As the tree grows, you will start seeing more money. Breaking even on a macadamia farm will be in either year 10 or year 11, that’s if you’re a good farmer that practices good farming, supporting your orchids and doing everything right from the start until the end,” Likhanya added.
Likhanya said he enjoyed macadamia farming because it is profitable and creates jobs. There are also opportunities for agro-processing, which also leads to job creation.
“It’s a very forgiving business because if you mess up one year, you can come back the next year and have a chance to carry on,” said Likhanya.
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