Grain SA hopes to isolate 3 million ton surplus as prices plummet
Maize reserves to fuel ethanol project
January 31, 2005
By Peter Apps
Centurion - South Africa's leading grain producers' association hopes to mop up the country's huge maize surplus by using it to feed a new fuel ethanol programme financed by farmers.
"In the short term, we need to isolate this surplus," Grain SA general manager Steve Shone said on Saturday on the sidelines of a crisis meeting at Pretoria's Supersport Centurion stadium attended by about 4 000 farmers.
Prices have dived below R600 a ton from over R1 000 as recently as November on good rains, weak export demand and a surplus that is estimated at more than 3 million tons.
Farmers say the current price is so low some will go out of business and others will lack the money to plant the 2006 crop.
"We are looking at finding a way of holding that [surplus] in trust by Grain SA and it will not be sold for less than, say, R1 000 a ton," Shone said.
Some of the surplus was still in the hands of the farmers, he added, and they were confident that it could be kept off the market, although isolating stocks held by traders and millers might be more difficult.
The maize would probably be held until Grain SA could build ethanol plants to convert the surplus into fuel. Farmers would pay a levy, perhaps of R5 on every ton they produced, and that would fund the project, he said, without giving any further details.
Building plants in rural areas would also boost employment, farmers say. A third of South Africans lack jobs, but the problem is most acute in the countryside.
Some of the biggest cheers at the meeting came when speakers suggested the maize price should not be set by the Safex futures market but by a board of officials who would fix the price based on the cost of production.
But some observers questioned whether the government would go along with such a plan.
"It's political," said Jan van Zyl, the head of agricultural delivery at First National Bank. "They aren't going to do anything that increases food prices for the general population."
Maize meal remains the staple diet of South Africa's black majority. But some farmers say cheap wheat imports are reducing demand for maize, and want to see tariffs raised.
"They're 2 percent now, but they could be as high as 7 to 8 percent," said Free State farmer Manie Pieters.
"Other countries subsidise their crops. We cannot compete."
Another Free State farmer, Johan Claare, said the crisis would become increasingly dire as the next planting season approached in late 2005.
"People will plant less because they don't have the money," he said. "The crisis will begin in September when the financial institutions want security. How can you do planning on something that varies in price between R1 200 and R400 a ton?"
Portfolio committee on energy fails to unilaterally back development of nuclear power policy
Cape Town - Members of the portfolio committee on minerals and energy on Friday turned down a plea by the department of minerals and energy to unilaterally back the development of a nuclear energy policy to meet growing electricity needs and reduce the dependence on highly polluting coal-fired power stations.
They pointed out that they were "not scientists" and could not make a value-judgement about the pros and cons of nuclear energy without input from committees dealing with the environment, science and technology or groups such as Earthlife Africa, which had steadfastly opposed new nuclear energy plants in the country.
Their meeting came just days after a Cape high court ruling that the department of environmental affairs and tourism put its approval of the construction of a demonstration model of the controversial pebble bed modular reactor at Koeberg on hold until the department had heard further views from environmental interest groups.
Schalk de Waal, the department of minerals and energy's director of nuclear energy, told the committee that the ruling was not expected to delay the construction of the plant unduly but had once again highlighted the misconceptions about nuclear energy.
Groups such as Earthlife Africa had received considerable publicity for their opposition to nuclear power but consultations with the general public had not indicated the existence of a massive anti-nuclear energy lobby in South Africa.
But it was clear the committee members felt uneasy about being asked to back the nuclear energy route when they were not qualified to assess it on their own, still had many concerns about its safety and the disposal of nuclear waste and were not sure if this would be the most cost-effective energy alternative.
Many also still suffered from an inherent prejudice against nuclear energy because the Atomic Energy Corporation, the apartheid-era predecessor to the Nuclear Energy Corporation of SA, had sucked up huge amounts of taxpayers' money for covert operations, including the manufacture of nuclear bombs.
These were dismantled after the 1994 elections.
-Lynda Loxton
|
|
