Potatoes SA 25 April 2018

Transcription

1 Potatoes SA 25 April 2018 Farm-level Analysis Prepared by

2 Farm-level Scenarios: Limpopo & Sandveld regions Implication of electricity tariff increase, national minimum wage, plant protection cost inflation + reduced area in the Sandveld region because of the drought

3 RAND PER WORKER PER MONTH RAND PER WORKER PER HOUR Impact of the NMW Nominal farm wages R4 500 Rand / worker / hour Rand / worker / month R 25,00 R4 000 R3 500 R3 000 R2 500 R2 000 R1 500 R1 000 R 500 R- R 4,10 R 4,47 R 4,87 R 5,10 R 5,34 R 5,59 R 6,31 R 6,74 R 7,04 R 7,71 R 11,66 R 12,41 R 13,37 R 14,25 R 15,39 R 18,00 R 20, R 20,00 R 15,00 R 10,00 R 5,00 R- Bureau of Food and Agricultural Policy 3

4 Electricity tariff trend Annual percentage change in electricity tariff 40,0% Annual percentage increase in electricity tariff Average per annum increase 35,0% 30,0% 29,0% 30,2% 31,6% 34,0% 25,0% 20,0% 15,0% 13,8% 19,5% 16,7% 11,7% 10,0% 5,0% 0,0% 0,9% 5,2% 3,9% 8,2% 6,9% 7,1% 8,2% 2,2% 5,2% Bureau of Food and Agricultural Policy 4

5 Model Assumptions: Typical potato farms in the Limpopo & Sandveld regions Scenario compared to Baseline Scenarios Limpopo Sandveld 1) Implementation & phasing in of the national minimum wage for agriculture which assumes an increase of 16.9% in 2018 and 11.1% in ) Electricity tariff increases by 34% (2019). X X X X 3) Increase in the cost of plant protection chemicals as a result of recent developments regarding regulations in China. Assumption = Plant protection increases by 30%. 4) As a result of the persistent drought in the Western Cape, water restrictions may lead to less area under production for the Sandveld region. The scenario assumes that area is reduced by 60%. X X X Jack: ons toets 3 scenarios op ons tipiese plaas in Limpopo en 4 scenarios vir ons tipiese plaas in die Sandveld (Wes-Kaap). Bureau of Food and Agricultural Policy 5

6 Implication of scenarios on a Limpopo farm Absolute difference from Baseline for 2018 & 2019: Net farm income Minimum wage Electricity tariff scenario Increase in plant protection Combined: Wage, electricity & chemicals R- -R R R R R R R R R : Die NFI daal soos wat die verwagte NMW inskop. Die ander scenarios is nie van toepassing vir R Effect of 3 scenarios for 2018, 2019 & combined effect Net farm income can be defined as all cash -R receipts minus all cash expenses, excluding family living costs, principal debt payments and income and land taxes Bureau of Food and Agricultural Policy 2019: Die NFI daal vir al 3 die scenarios apart, soos aangedui. Vir die 3 scenarios saam, daal die NFI van die tipiese plaas met R1,451 miljoen in R Combined difference: 2018 &

7 Implication of scenarios on a Limpopo farm Implication on return on investment (ROI) Return on investment (ROI) = Net Farm Income (NFI) divided by investment in land and machinery. Effect of 3 scenarios for 2019 & combined effect Die ROI vir die 3 scenarios + combined effect, word in geel aangedui vir Indien geen van die scenarios van toepassing is nie, met ander woorde alles is normaal, is die ROI = 9,96% vir Dit word 6,67% vir 2019 = combined effect van al 3 scenarios. Bureau of Food and Agricultural Policy 7

8 Implication of scenarios on a Limpopo farm Implication on net farm income presented in an index where 2016 = 100% Die figuur dui op die verandering in die NFI sedert 2016 vir die tipiese plaas in Limpopo. Let op die skerp daling in 2019 wanneer veral die chemiese koste en Eskom koste scenarios inskop. Effect of 3 scenarios for 2019 & combined effect Bureau of Food and Agricultural Policy 8

9 Implication of scenarios on a Sandveld farm Absolute difference from Baseline for 2018 & 2019: Net farm income R- -R R R R R R R Combined difference: 2018 & R Hierdie is die syfers vir die Sandveld plaas.: Die NFI daal vir al 4 die scenarios apart, soos aangedui. Vir 2018 is dit net die minimum wage en 60% daling in hektare (weens droogte in Wes-Kaap) scenarios wat inskop. Vir die 4 scenarios saam, daal die NFI van die tipiese plaas met R5,309 miljoen in Die NFI daal skerp wat beteken die eienaar en sy grond kan waarskynlik Minimum nie wage vergoed Electricity word tariff nie. scenario -R Increase in plant protection Reduced area : Boere moet 60% sny op hul waterverbruik. -R Reduced area -R Combined: Wage, electricity & chemicals -R Combined effect: All scenarios Effect of 3 scenarios for 2018 & Reduced area because of drought Bureau & combined of Food and effect Agricultural Policy 9

10 ROI in Percentage Implication of scenarios on a Sandveld farm Implication on return on investment (ROI) 14% Return on Investment for % 12% 11% 12% 10% 8% 8% 6% 4% 2% Die ROI vir die 3 scenarios + combined effect, word aangedui vir Indien geen van die scenarios van toepassing is nie, 5% met ander woorde alles is normaal, is die ROI = 12% vir Dit word 0% vir 2019 = combined effect van alle scenarios. 0% Net farm income: Baseline Net farm income: Minimum wage Net farm income: Electricity Net farm income: Plant protection Net farm income: Reduced area Effect of 3 scenarios for Reduced area because of drought & combined Bureau of effect Food and Agricultural Policy 0% 0% Combined effect: Wage, electricity & plant protection Combined effect: All scenarios 10