6 December 2004

During a meeting with all the major banks, organized agriculture co-ops,and officials from the Department of Agriculture, at my request, it wasre-emphasized that a joint effort by all role players will be neededto make a meaningful impact on the effect of the drought in the WesternCape.

Poor yields, ranging from less than one ton per hectare, to 25000hectares that produced no yield at all, are putting the future existenceof wheat farmers under threat. Poor yields in crops canonly be atttributed to the extreme weather conditions. In my deliberations with banks and co-ops it is evident that the farmerscannot be blamed for the poor and well below average yields.

The total effect of this means that farmers will not be in a positionto obtain any future finance towards production cost for the 2005 seasonresulting in many farmers not being able to put one grain of wheat intothe ground at the start of the next season.

The impact of this on thetotal rural community, from producers, to farm labourers, to entiretowns, means that we will have ghost towns with many thousands of farmlabourers and other employers in businesses that will be laid off. Theestimated direct impact on farm workers will be the loss of more thanone third of the estimated 3000 jobs with wheat farmers in this area. For this reason I have called on banks andco-ops to reschedule and consolidate the debt of farmers.

My advisory committee on the assessment and prioritization of drought-stricken areas in the Province has completed a tour of the Province andwe will be in a position to disburse funds from the R9 million that wasallocated to us by the National Department of Agriculture, as soon asthe allocation and formula for disbursement has been gazetted.

In the meantime, the banks and co-ops have indicated their willingnessto form a joint task team with the Western Cape Department ofAgriculture to look at various models through which farmers could findsome form of relief in the present situation. Both groupings stressedtheir commitment to work with us to find a way forward to assist ourfarmers during these hard times and welcomed the initiative that we aretaking to create this channel of communication in the interest of thefarmers and agriculture as a whole.