South Africa’s potato farmers are ending the year off under immense pressure. And although industry players are optimistic about the industry’s future, it will be years before the industry recovers and farms return to previous levels of profitability.
As it stands, potato farmers in the country are not turning in profits. This is mainly due to too many potatoes in the market, and the price farmers are getting for their potatoes is much less than what it should be.
On top of this, the industry has to come up against persistent episodes of load shedding, higher input costs and overpricing on potatoes.
No let up in pressure
“The pressure does not seem to have a possible break shortly,” said Willie Jacobs, CEO of Potatoes South Africa.
“The Russian-Ukranian war still has a major impact on the availability of key inputs, and the current political turmoil acting in on the exchange rate, is not assisting things either.”
In a previous article, Jaco Koekemoer, marketing manager for Potatoes SA, told Food For Mzansi that with farmers already under such severe pressure, these challenges were making matters worse for farmers.
Things are likely to change when overproduction is no longer an issue.
“Reduced planting should see an increase in profitability of the farmers that remain in the market,” Jacobs said.
“But in the current circumstances, it will take the industry more than two years to recover. The impact of the current input cost is escalated by the lack of funding available to producers. It can only be turned around by an increase in product price and lower input cost.”
What’s the solution?
However, the dust has not yet settled. The opportunity that this situation presents does, however, create new positive challenges for the industry, Jacobs believes.
“The fact that there is a bigger demand for processed potatoes will open the doors to projects that the industry can take forward.”
The solution he reckons is “parking” a couple tons of potatoes in times of overproduction and making it available again later. The alternative is placing excess potatoes on alternative markets.
“[That way], we can create an opportunity for potato production to expand and add value,” Jacobs said.
Furthermore, Jacobs cautioned that the future of Mzansi’s potato industry should be watched closely.
Keeping an eye on technology
“Regardless of whether we want to believe it, deal with it or ignore it – technology is bringing the future closer at an extremely fast pace… We will soon experience times where not all new concepts will even be brought to fruition before more modern initiatives are already introduced.”
The pipeline of technology products that are already in the making is exciting, Jacobs said.
He added that the best part is that a lot of these products and services will almost be for free, given the numbers of consumers who will benefit from it.
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