A Framework for the Development of New Crops Industries in South Africa

INTRODUCTION The grain industry (mainly maize and wheat) is the largest crop industry in South Africa under rain-fed conditions. Significant changes have taken place since deregulation in agriculture and the termination of subsidies from mid 1990s. The total area under grain has decreased by about 10% to 15% (C. Du Plessis, pers. commun. 2001) due to lower prices (based on import parity and free market forces) and the higher risk of production because of the absence of state subsidies. Consequently, grain planting has decreased significantly on low potential land as well as on high potential land in remote areas. In future, global market forces will test the viability of all agricultural commodities being produced in South Africa. Agriculture is still an important part of the national economy and greatly influences rural economy. Diversification or substitution by new crops could provide opportunities to improve the viability of the agricultural sector per se. This would be the case where the production of commodities or other established industries, have become non-competitive. However, the development of most new industries or businesses is usually complicated because of the high risks involved. It is therefore necessary to develop guidelines, frameworks, and processes to improve the success rate of new agricultural industries. There are examples of successful new crop industries established in South Africa. One is the canola industry in the Western Cape Province. It has grown from virtual no industry since early 1990s, to a production area of 30,000 ha currently, with two processing plants in place (B.F. Saaiman, pers. commun. 2001). This development is significant in a South African context. The roots of this industry started with a contract Canadian researcher. His instruction was research on alternative crops for the wheat industry in the Western Cape Province. Canola proved to be the best alternative of crops tested. It was first considered for a domestic niche market. Farmers started to produce in small quantities and the crop was pressed at an existing oilseed company. The production of canola increased to such an extent that this plant could not handle the supply. Consequently, two plants were erected by agricultural co-operatives. This was not done simultaneously, but only after the capital investment was justified by regional levels of canola production. At present research is being carried out on uneven germination that poses a barrier to the growth of the industry (A.J. van W. Conradie, pers. commun. 2001).