Chairperson of Grain SA, Richard Krige,
Dr Tobias Doyer and the leadership of Grain SA,
Members of the board,
Producers from across the country,
Representatives of the grain value chain,
Distinguished guests,
Ladies and gentlemen,
It is always a privilege to spend time with the people who carry the responsibility of producing the staple crops that sustain this country.
Grain farming does not always occupy the centre of the national conversation. Yet very little in South Africa’s food system happens without the work done by producers in this room. The bread on supermarket shelves, the maize meal that feeds millions of households, the livestock industries that depend on feed grain, and the milling and processing industries that support thousands of jobs all begin with decisions made on grain farms across the country.
The importance of that role becomes even clearer when one looks at the scale of agriculture’s contribution to the national economy. Today the agricultural sector employs close to 950 000 South Africans, and when the broader value chain of agro-processing and input industries is taken into account, agriculture contributes roughly six to seven percent of South Africa’s economy. It is also one of the few sectors that consistently earns foreign revenue for the country. Last year alone, South Africa exported agricultural products worth more than US$15 billion, generating a trade surplus of over US$7 billion.
Within that broader agricultural system, grain production remains one of its most strategic pillars. Each year South African farmers produce between 10 and 16 million tonnes of maize, depending on rainfall conditions, supplying both domestic consumption and regional export markets. Yet when it comes to wheat, the picture looks very different. South Africa consumes more than 3,5 million tonnes of wheat annually, but domestic production typically reaches only around 2 million tonnes, meaning that the country remains structurally dependent on imported wheat for roughly 40 to 50% of its needs.
That structural reality is one of the reasons why discussions within the grain sector today are so focused on the theme of this Congress: “Opening the Gap – Sustainability key; profitability foremost.”
Across the sector there is a growing recognition that the gap between the cost of production and the returns farmers receive is widening. That gap is not the result of a single policy decision or a single market shock. It reflects a convergence of pressures that producers are being forced to manage simultaneously: ever increasing input costs, climate variability that is becoming increasingly structural, infrastructure inefficiencies that add cost to the system, and global market volatility that no farmer can control.
Wheat producers in the Swartland, Overberg and Southern Cape regions, for example, are clear: wheat farming under current market and policy conditions is no longer economically sustainable, and intervention from the broader value chain is critical. Economists have repeatedly shown that wheat contributes a relatively small proportion to the final bread price, yet producers carry the cost pressures which are not evenly spread throughout the value chain.
One of the most significant drivers of the widening gap between production costs and farm returns remains the cost of inputs. Almost all the active ingredients used in the production of agricultural inputs in South Africa are imported, meaning local producers are directly exposed to fluctuations in global commodity prices and movements in the rand-dollar exchange rate.
Fertiliser alone comprises around 35% to 50% of a farmer’s production costs depending on the production region. The past three years have seen global fertiliser markets come under severe pressure following supply chain disruptions linked to the Russia-Ukraine conflict. South Africa imports more than 80% of its fertiliser requirements, which means these global shocks translate directly into local production costs.
In the North West Province, fertiliser costs for maize range from approximately R3 300 per hectare for lower yield targets to nearly R6 900 per hectare for higher yields. In the Eastern Free State, this figure can reach up to R8 900 per hectare.
Global tensions are also affecting energy and shipping routes. The Strait of Hormuz remains a critical route for fertiliser exports from countries such as Oman, Qatar and Saudi Arabia. Over the last ten days, insurance risk premiums for vessels using this route have increased from around 0,25% to 1% of cargo value, significantly raising shipping costs that ultimately ripple down the value chain.
At the same time, diesel prices are projected to increase by around R4,40 per litre from 1 April 2026. Fuel already accounts for roughly 12% to 18% of production costs, meaning increases of this scale will directly affect producers preparing for winter planting and those harvesting summer crops.
Agriculture has always involved risk. But what many farmers are facing today is not simply risk – it is unpredictability.
Agriculture relies on long planning horizons. Decisions about planting, financing and investment often extend several seasons into the future. When infrastructure becomes unreliable or administrative decisions take too long, those planning horizons shrink.
What producers consistently tell me when I engage across the country is that they are not asking government for protection from markets. South African agriculture is one of the most market-oriented agricultural sectors in the world. What farmers are asking for is something far more fundamental: a policy environment in which markets function predictably, infrastructure works efficiently, and government decisions are implemented clearly and consistently.
In many cases, the most effective agricultural policy is the policy that removes obstacles rather than adding new layers of regulation.
One area where policy predictability is particularly important is the wheat import tariff mechanism. This system exists to stabilise the domestic market when international prices move sharply enough to undermine local production.
For the mechanism to function effectively, however, tariff adjustments must be implemented without administrative delays. Delays in gazetting tariff adjustments can expose importers and millers to unexpected costs which ripple through the value chain and ultimately affect farmers.
For this reason, government is exploring the possibility of moving toward a more automated tariff adjustment system, ensuring that tariff changes triggered by the reference price formula take effect automatically. Predictability is what allows markets to function properly.
Infrastructure is another structural pressure facing grain producers. Grain production depends heavily on logistics efficiency. In 2011, roughly 20% of South Africa’s grains and oilseeds were transported by rail. By 2025, that figure had declined to just 3%.
This shift has significantly increased reliance on road transport. When rural roads deteriorate, transport costs rise through higher fuel consumption, vehicle damage and slower transit times. These costs ultimately reduce farm-gate margins.
This is why the recent Memorandum of Cooperation signed by Minister Dean Macpherson with AgriSA, Agbiz and Infrastructure South Africa is important. Beginning with a pilot in the Free State, this partnership will identify key agricultural road corridors where targeted investment can unlock economic value and improve logistics efficiency.
Another issue raised by the wheat industry concerns the request for a Section 7 Committee under the Marketing of Agricultural Products Act to examine the structure of the wheat value chain. The establishment of this committee depends on the appointment of the National Agricultural Marketing Council.
The selection process for the new council has been completed and appointments will soon be finalised. Once the council is constituted, the Section 7 Committee will be established.
Looking ahead, innovation will also play a central role in sustaining the grain sector. Advances in plant breeding technologies, including new breeding techniques and gene editing, offer opportunities to improve crop resilience and yield stability under climate stress.
The regulatory framework governing genetically modified crops is currently being updated through a tiered risk-assessment system under the GMO Act. This approach aims to align regulatory oversight with the level of risk while supporting scientific innovation.
Another important discussion within the sector concerns the potential expansion of domestic demand through biofuels. South Africa has the technical potential to produce approximately 3,2 billion litres of Sustainable Aviation Fuel annually. If structured correctly, biofuels could support rural industrialisation, energy diversification and additional demand for maize.
Ultimately, however, food security rests on farm profitability.
If farmers cannot operate viable businesses, the entire food system becomes fragile.
Government’s responsibility is therefore to ensure predictable policy, efficient administration, functioning infrastructure and regulatory systems that support competitiveness.
When those fundamentals are in place, South African farmers continue doing what they have always done: adapt, innovate and feed this nation.
Thank you.
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