THE BUSINESS
11
CHAIRMAN’S REPORT
On the back of the worst drought in history, the maize crop record which stood for 37 years,
since 1981, was broken unexpectedly. The record was exceeded by 13,9%.
Commercial Maize Area Planted (Hectare)
Hectares
Data at 20-year periods with
respective trend line
Dear Stakeholder
REVIEW
The year under review was one of extremes. It commenced
with an exchange rate of R13,31 against US$1 and ended with
R12,37 against US$1, a strengthening of 6,9%. We were con-
cerned initially about the effect of the downgrading of the sove
reign credit rating of South Africa on the agricultural sector, but
the markets reacted positively when the ANC-leadership made
certain changes which brought about more certainty in respect
of geo-political economic policy.
On the back of the worst drought in history, the 37-year
long maize crop record, which has been standing since
1981, was broken unexpectedly. The record was ex-
ceeded by 13,9%. It was even more phenomenal that the
number of hectares on which the harvest was produced,
was 60,6% lower than in 1981. The yield per hectare for
maize increased by 89,1% on average, to 6,39 tons per
hectare since 1981.
Source: SAGIS Historic Information
Commercial Maize Yield (tons/hectare)
t/ha
Data at 20-year periods with
respective trend line
Soft commodity prices declined significantly and repriced
the record harvest to a level close to export parity, after
its record run the previous year. Lower than expected
farming income resulted in customers spending their
available capital on the repayment of debt rather than on
the replacement of capital goods, which caused stress in
the agricultural equipment sector.
RELEVANT AND SIGNIFICANT FOCUS AREAS OF
THE BOARD OF DIRECTORS
Source: SAGIS Historic Information
The board has been looking forward to a better agricultural cycle
and made sure that the group maintained its focus in order to
ensure optimal utilisation of opportunities.
The board and its committees spent more time on and afforded
OVERVIEW | THE BUSINESS | STRATEGIC AND OPERATING CONTEXT | CORPORATE GOVERNANCE | FINANCIAL REVIEW
Radical remarks about land reform create uncertainty for inves-
tors. The highly complex and competitive food value chain, which
is characterised by low subsidy levels, is further pressurised by
the volatility of rainfall patterns, inefficient logistical supply chains
and high levels of debt. Property rights are the foundation of our
economy and create the basis for all citizens to create and build
wealth through generations. In agri-related industries, it creates
the basis for security, collateral and directly affects the basis for
the more than R180 billion debt in this sector. It is of the utmost
importance to not endanger the role played by millions of people
deployed in the agri-food value chain, and therefore the whole
consumer base of South Africa, with rash and irresponsible
statements about expropriation of land without compensation.
The right thing to do would be to redress the land reform issue in
a responsible way, without destabilising our economy and food
security, while we address the needs of all our citizens to build
and sustain the livelihood and that of their children.
AGRICULTURE: A YEAR OF EXTREMES