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Grain SA again pleads with govt to help wheat farmers

Grain SA met with MPs to discuss the impact of the drought on farmers, especially wheat producers.

FILE: A dead plant in the drought-stricken Free State. Picture: Christa Eybers/EWN.

CAPE TOWN - Grain SA has reiterated the call for government intervention to save wheat farmers who are suffering because of the drought.

Yesterday the organisation met with Members of Parliament to discuss the impact of the drought on farmers, especially wheat producers.

Last year was South Africa's driest year in over a century.

Grain SA CEO Jannie de Villiers says it has raised several proposals with government - to step in and help - including a plan to give R1 billion to new farmers struggling to get loans because they don't own land.

"We've asked for a subsidy for the wages of the workers so we can keep them in our service and don't send them back to the towns where they will be unemployed. Also a guarantee for our commercial farmers who won't get a loan next season so they can get postponement of their debt to enable South Africa to plant again and to maintain food security."

De Villiers says consumers can expect food prices to increase from April as a result of the drought.

DROUGHT PUSHING SA TO THE BRINK OF RECESSION - MOODY'S

South Africa's worst drought on record risks tipping an already weak economy into recession as rising agricultural imports feed into rising inflation, ratings firm Moody's said on Tuesday.

"The worst drought on record in South Africa is aggravating the ongoing economic slowdown, threatening near-zero growth if not a recession in 2016," said Moody's Senior Vice President and lead analyst for South Africa Kristin Lindow.

A severe drought caused by an El Nino weather system has swept across southern Africa since mid-2015, threatening the maize crop, which serves as a staple in the region, forcing countries like South Africa to up imports to plug the shortfall.

"Normally a net exporter of grains, South Africa will now need to import substantial amounts of grain to compensate for domestic production shortfalls," Lindow said.

Inflation figures due on Wednesday are expected to show consumer prices rising just short of 6 percent, the South African Reserve Bank's upper target.

South Africa's central bank raised its benchmark interest rate by half a percentage point in January, after raising it by a total of 50 basis points in 2015, citing the deteriorating inflation outlook.

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