2013/09/19

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TLU SA Kongres18 September 2013

Posisionering van landbouer….om

volhoubaar te funksioneer Prof Johan Willemse

Landbou ekonomie

UV

2013/09/19

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Plaaslike Strategiese posisionering

Enkele vertrek punte:

•Die boerdery as besigheid wat aanvaarbare opbrengs op kapitaal belegging moet lewer (Grond is net een produksiefaktor-arbeid,kapitaal & ondernemerskap)

•Soos enige ander besigheid-is dit voortdurende proses van herposisionering in veranderende omgewing (Internasionaal en plaaslike politieke\ekonomiese omgewing-markfaktore en klimaat)

•Die ondernemer se taak is opbrengs op belegging en aanpasbaarheid met regte produk in mark, teen laagste koste moontlik , wat mededingend is en platteland ontwikkel .

•Staat se rol is-om welvaart te bevorder vir sy bevolking-deur opvoeding, gesondheidsdienste, en infrastrukiuur – dus beleidsraamwerk (en reëls) waarbinne ondernemers\privaatsektor welvaart kan skep en internasionaal kan meeding.

•Hulpbronne is skaars-optimale aanwending van hulpbronne …..Staatsbesit van landbou grond is internasionaal bewys as onwerkbare opsie om welvaart te skep.

•Landbou as sektor , se rol krimp soos ekonomiese welvaart toeneem en die ekonomie industrialiseer.=Wêreld wye ekonomiese feit.MAAR voldoende en goedkoop voedsel voorsiening bly belangrik.Besteding 20-30%.

•Dus = hoe kan landbou voldoende, internasionaal mededingende produkte lewer, sodat bevolking se welvaart kan toeneem en die produsent as ondernemer ‘n billike rendement op kapitaal kry –om aan te hou investeer en te produseer.

•Vakverbond se rol: Om beste bedinging vir sy lede te doen, binne politieke raamwerk.(Cosatu,Amcu,Numsa ens) TLU SA?

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Strategie:Hoe om ANC /SAKP/CosatuRegering te “oorleef”

•Verstaan risikos-herposisioneer•Opbrengs op kapitaal

/Kontantvloei/Belasting…•Goedkoop/doeltreffend moontlik

Produseer….Tegnologie…

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Strategie

Interne besigheids

prosesse

Boer & familie

& werknemers

Eksterneomgewingen drywers

Aksieplan

Taktiese besluite

operasionalebesluite

ImplementeerEvalueer/pas aan

VISIE

Kenmerke van Sosialistiese(Russiese) Staat in

CEE lande• Monopolie van staat- en semistaatsinstellings • Beheer ekonomie en alhoe meer oneffektiewe staatsinmenging• Voldoen nie werklik aan die vereistes van demokratiese bestel nie• Kritiek-is misdaad teen sosialisme/staat…..Ander realiteite• “Krony” kapitalisme- politieke koppeling noodsaaklik vir besigheid/kontrakte.• Inmenging in markte (Arbeid,kapitaal met wanaanwending hulpbronne)• Grondherverdeling-staatsplase en staatsgrond besit en klein stukkies grond• Word netto invoerder van voedsel• Lewenstandaard vorder baie min …raak agter…….• Voorbeelde hiervan met statistiek ens in Oos Europa en elders beweseBron:” The post socialist transition in a comparative perspective-the lessons”L Balcerowicz, Warsaw School of Economics.Poland.IFMA 19.Poland.July 2013(Hy was die argitek van Poland se suksesvolle mark hervormings na 1989 se40 jaar van kommunisme)

Poland se lewenstandaard het die vinnigste verbeter van 18 CEE lande na 1989.Landbou grond privatiseer,landbou industrialiseer/groter plase=China dieselfde!Voedsel uitvoerder geword….

WAAR LAAT DIT SUID AFRIKA-IN TRURAT!

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China Industrialization

10

74%

57%

42% 37%30%

21%

36%

48%51%

55%

5% 7% 10% 12% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2005 2007 2009 2013F

Herd Size of Hog Farms in China

Specialized farm

(+3000 heads/farm)

Commercial farm

(50~3000 heads/farm)

Backyard farm

(1~49 heads/farm)

70%

64%

14%

7%

15%18%

23%

18%

8% 11%

39%

38%

7% 6%

15%25%

9% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2005 2010(E) 2015(F)

Large commercial farm(>500K)

Commercial farm (50K-500K

birds)

Large size farm (10-50K birds)

Mid size farm (2-10K birds)

Backyard farm (<2K birds)

Structural trend towards scaled

farming will accelerate in

coming years

Herd Size of Poultry Farms in China

Source: MOA, Rabobank estimates

“BEIJING  (Dow Jones)--China's grain demand will likely increase by 4 million metric tons a year over the next five years, while the local supply of agricultural products will face huge pressure, Vice Agricultural Minister Chen Xiaohua said Thursday.” January 28, 2011

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Agricultural production structure changing….

The 80-20% principle-also in SA

Contracts in the supply chain

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Hoe gaan jy meeding? Ekonomie van skaal of nismark?= Investering in Tegnologie noodsaaklik

Economies of scale….milk industry example

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Neu Zealand dominate world dairy markets-without Government subsidies1 share milker do 1200 cows per milk session…..

Strategie : Keuses moet uitgeoefen word oor die toekomspad

Hoe gaan ek mededingend en winsgewend bly in vyandige beleidsomgewing ?

• Ekonomie van skaal• Nismark produk• Waarin moet ek investeer?• Wat moet ek ophou doen?• Wat moet ek begin doen?

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But corn is now $6.50, not $2.50

The basics have remained the same

• Agricultural land (1,000 ha) • Global population (in millions)

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Total population Rural population

Urban population

0.50

0.75

1.00

1.25

1.50

4,200

4,300

4,400

4,500

4,600

4,700

4,800

4,900

5,000

1960 1970 1980 1990 2000 2007

Agricultural land area Agricultural land area per capita

Source: FAO Stat Source: FAO Stat, Rabobank

For many decades productivity gains outpaced demand growth. But things have changed.

Now due to GDP growth in the developing world, demand is accelerating.

Unfortunately, productivity from yield improvement is decelerating.

The world has changed from one of structural surplus to structural deficits.

The Hunger Map …….

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Land Matrix

I

TZA

BRA

MAR

PHL

IDN

RUS

GHA

NGABEN

ML

SDN

MOZ

ETH

ZMBPAK

MDG

ARGARG

Transnational Land Deals for

Agriculture in the Global SouthAnalytical Report based on the Land Matrix Database

Ward Anseeuw, Mathieu Boche, Thomas Breu, Markus Giger, Jann Lay, Peter Messerli and Kerstin Nolte

landportal.info/landmatrix

1April 2012

Africa 2012 34 Mill Ha.DRCEthiopiaTanzaniaZambiaMozambiqueMadagascar

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Buying CountriesChina Saudi ArabiaUAESouth Korea

Create source ofCommodities for Urbanization Businesses forInvestment to serve Markets in RegionAnd transport protection

Agricultural land – a new investment class worldwide……….

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Johan Willemse 1919

Meantime in South Africa……..•We want to turn the clock back….to subsistence farming and government owned land/feudal system…•We want to force people back to rural areas (Agri students)•We are wasting money on unsuccessful land reform•And we have become a net importer of food•But we do not have the money to pay for imports•Policy is in shambles…crony capitalism?•The Rand collapsing---food prices increasing•We want to take more land out of production, while

urbanization increases…….(40 Million people urbanized)and we can’t get the economy growing to create jobs

Where should we focus:•How to grow the economy and create jobs in an industrializing

and urbanizing environment ?.

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• “90% of farms redistributed to black farmers are no longer productive 6,3 mill ha”

• SA scarce on high potential agri areas-taking 30% out of production plus mines

= Land prices…• Commercial quantities

food needed into supply chain for retailers in cities/urban areas

= (+/- 40 million people)

Supply and demand : The facts of Agri

• SA “agric policy” was formulated in early 1990’s, when there was sufficient supplies and prices were flat

• Stock ratios declined and prices became more volatile/upwards….

• The argument of “Food Security” via imports –invalid in 2010’s

• Rethink of “food security”needed, with imports expensive/volatile and lack of foreign currency……

• Food price volatility increase

SA agric policy formulatedWorld changed

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“SA Labour unrest”

Scientific proof that “high “food prices lead to social instability…….

Food security is estimated to improve slightly in 2012 as the number of food-insecure people in the 76 countries covered in this report

declines from 814 million in 2011 to 802 million in 2012. The share of the population that is food insecure remains at 24 percent.

Regionally, food insecurity is projected to remain most severe in Sub-Saharan Africa.

It is the only region projected to have a sizeable increase 15,1%, in the number of food insecure people

Food-insecure people are defined as those consuming less than the nutritional target of roughly 2,100 calories per day per person.

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South Africa became net food importer in 2012-products we should be producing locally!

We depend on foreigners to fund ……. Government Budget and record trade deficit ( to import food)

-8%

-6%

-4%

-2%

0%

2011 2012 2013

Staat (begrotingstekort) Handelstekort

GRAFIEK 3 : Begrotingstekort en buitelandse

handelstekort (% van BBP)

R 250 Bn

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Oilprice….Syria…..R/$.....Agri inputs: Fuel, Fertilzer,Machinery….Import prices food products….export prices ….Food Inflation ….

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R/$-implications for Agri….will it come back?Agri Inflation, Imports …..Interest rates?

Economics and Agricultural Economics Johan Willemse 2013

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40 miljoen in stede

16 miljoen op toelaesR100 Bn

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Die mega tendense is in kommersiele boere se guns

Nie doodgaande mark nie

Hulpbronne word skaarser en duurder

Maar …Markte beweeg in siklusse

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•Economic cycle

•International Market

•Industry cycle

•Weather cycle

•Cash flows

•Profits

Markte beweeg in siklusse………..

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Markte (weer) beweeg in siklusse………..

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Beesvleis….

500

1000

1500

2000

2500

3000

Apr 02 Apr 04 Apr 06 Apr 08 Apr 10 Apr 12 Apr 14

Break-even Weaner YM2

WEANER CALF PRICE TRENDS

Calf = c/kg

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Chantel Ilbury

Chantel Ilbury

Landbou Scenarios: Hoe gaan die besigheids omgewing lyk vorentoe?

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Landboumarkwerkswinkel 5 Februarie 2013-Chantell Illbury/Johan Willemse

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• Waarom tegnologie?“Our producers continuously adopt cutting-edge technologies

and implement superior farm practices. This leads to higher production using fewer resources and farm inputs. These productivity gains create an important competitive advantage in the marketplace” FCC Canada.

SA boere basies minimum invoerbeskerming-ding mee plaaslik & internasionaal…….en teen onnosel regeringsbesluite/beleid.

• Opsies:1. Kommoditeit-mededinging vind plaas op laagste koste.2. Nismark-mededinging vind plaas op eienskappe van produk.3. Posisioneer binne marksiklusse

1. InvesteringsprogramReserwefonds-belastingprogram

5. Doen niks en kla oor landbouwinsgewindheid……

Tegnologie is meer as “masjiene”

• “Technology is properly defined as any application of science to accomplish a function. The science can be leading edge or well established and the function can have high visibility or be significantly more mundane but it is all technology, and its exploitation is the foundation of all competitive advantage.”

Wikipedia

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Gebruik prys risiko instrumente:SAFEX

1300.00

1350.00

1400.00

1450.00

1500.00

1550.00

1600.00

Put 3x 12x Put FEB Feb Spot

R/t

on

Gem Prys

Koop put Des” at money” verval Jul: R700/ha beter as oestyd= 500ha @ R700=R350 000 wins!

7000

7200

7400

7600

7800

8000

8200

8400

Put 3x 12x Put FEB Feb Spot

R/h

a

Gem Bruto produksie waarde

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Markte beweeg in siklusse……….gebruik die tegnologie “tools”.

1150.00

1200.00

1250.00

1300.00

1350.00

Put 3x 12x putsep

sep spot

R/t

on

Gem Prys

2900.00

3000.00

3100.00

3200.00

3300.00

3400.00

Put 3x 12x put sep sep spot

R/h

a

Gem Produksie waardeEvalueer 6 strategieeOor 10 jaarSept kontrak=beste200ha@R25o/ha=R500 000 ekstra winsOor 10 jaar

Moderne groenteplaas in Poland-400ha +Voer uit-minimum arbeidMinimum loon/uur soos in SA

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400ha groente Poland

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Blomplaas-32 ha onder dak in kweekhuise=10 000 orgideë plante /dag.250 arbeiders5e geslag-”oorleef” duisters en toe Russe…1989 berlynse muur!

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Australie-400 ha olywe &400 ha wyndruiwe

5 Permanente arbeidersOes meganies

Australie-2000 ooie1 man & 3 skaaphonde

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• SA “agric policy” was formulated in early 1990’s, when there was sufficient supplies and prices were flat

• Stock ratios declined and prices became more volatile/upwards….

• The argument of “Food Security” via imports –invalid in 2010’s

• Rethink of “food security”needed, with imports expensive/volatile and lack of foreign currency……

• Food price volatility increase

SA agric policy formulatedWorld changed

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Reserwefonds opbou: ART

• Alternatiewe risiko oordrag

• Skep eie reserwes teen risiko

• Binne versekeringswet en belastingwet

• Toegang tot Reserwes:

• Kapitaal vervanging en investering….

Marlene: 083 3818011

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OUR PROCESS

Risk Analysis

IdentificationAssessmentRate of occurrenceLikelihood / ProbabilityPotential risk treatmentsAvoid (eliminate)Reduction (mitigate)Transfer (Insure)Retention (Accept & budget)Residual Risk

Corporate Guarantee Integrated Risk Management Programme

Financial Risk Analysis

Capacity to absorb lossesFinancial status of the company/entityEffect of losses on liquidityCash flow implicationsRe-occurrence lossesTiming riskCredit risk

Claims/losses analysis

High Frequency/low valueLow frequency/high valueRisk transferRisk management processesRefused claimsRefused insurance“Acts of God”

CORPORATE GUARANTEE ART / CONTINGENCY POLICY

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WHAT ARE THE BENEFITS?ART- CONTINGENCY POLICY: BENEFITS

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Drywers Rigting verandering

Verwagte scenario

Impak op besigheid

Strategie Implementeer

Ekonomie

R/$/rente/insette

Rentekoers…

R/$....

Styg

Swakker…

Kontantvloei 2jaar kontantvloei plan

Politiek en infrastruktuur

Onstabiel

Swak bly…

Woeilig…

Self doen

Verloor fokus Visie Aksieplan….

Grond duur

Voedsel skaarser/duurder

Regte besigheid? Volatiel maar

Geld te maak?

Aanpasbaar…Investeer

Tegnologie

Ekonomie van skaal

Investeer in tegnologie!

Lt plan….

Mielies Wm vs Geel

Siklus af?

Nuwe oes… Verskans teen daal

Verskans

Sonneblom Siklus… Groter produksie

“surplus”verskans teen daal

Bees Siklus….

Vroulike diere ?

Teeldiere?

Speenkalwers?

Kudde bou? Inkoop?

Diversifiseer Onstabiliteit neem toe/risiko

Onstabiel Diversifiseer

beleggings

Reserwefonds

Arbeid Duurder… moeiliker Koste en bestuur

Minimum arbeid…

Investeer in nuwe tegnologie

Behou fokus Besigheidsplan Doelwitte &

aanpasbaar

Nuwe benadering

Hersien plan & fokus

TLU ondersteuning?

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