Siseko Njobeni
29 June 2005
Johannesburg — STUNG by persistently low maize prices, agricultural services company Senwes has started in earnest to discourage some farmers from planting the crop in the coming season, finance director Steven Alberts said yesterday.
Senwes is prone to fluctuations in the maize price. White maize closed at R566 a ton on the South African Futures Exchange yesterday. Yellow maize was at R599 a ton.
Alberts said the company was recently in talks with about 600 farmers "to explain our strategy for the coming (2005-06) season."
He said, like other financiers of troubled commercial farmers, Senwes would advise some of its clients to plant less.
"There is no doubt that, in order to reduce the current stocks, farmers have to start producing less," he said.
But there would not be a "blanket approach". Senwes would consider individual farmers' circumstances. "Some will be able to get money to produce while others will only get money for fixed costs such as labour," he said.
With some farmers unlikely to recover their production costs because of the low maize price, farmers' body Grain SA has warned of possible defaults on loans.
Alberts said that in the past two years, Senwes had managed to keep its debtors book "at more manageable levels".
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