Few SA farmers plan to leave the sector

LAMEEZ OMARJEE

One in five farmers in South Africa plans to leave the sector in the next decade, research shows.

Stellenbosch University PhD graduate Kandas Cloete’s research, investigating farm-level exit decisions and exit rates in commercial agriculture in South Africa, an agent-based approach, looks into the various reasons farmers plan to leave the sector. The National Research Foundation funded the research.

While this area of research has been covered extensively in the past, Cloete was interested in future trends for the sector. She also considered the driving factors for a producer staying or leaving the sector. Cloete surveyed 450 participants - some of whom had plans to expand, others wanted to maintain operations, and others planned to exit the sector. Ultimately, Cloete shows there is a projected exit rate of 20%, one in five farmers over 10 years. This excludes producers who expect the next generation to take over their farms. “If a constant exit rate per year is assumed, using simple arithmetic shows that this potentially could result in an average annual exit rate of 2%,” the paper read.

The decision to exit is personal and linked to a combination of factors such as investment costs, financial constraints, and a producer’s age.

Other factors flagged in the research include access to dependable labour, uncertainty about land reform, rural safety concerns and retirement without succession plans, having children or family members take over the farm.

“It is typically a combination of different factors that determines the decision to quit farming and sell the property,” said Cloete.

Cloete’s research groups producers into four clusters - based on their perceptions of the challenges and threats to their operations and how that affects their decisions to exit farming or continue.

The clusters are: ambitious producers, remainer producers, retriever producers and persistent producers. -Fin24