When the National Intelligence Agency paid Grain SA chairman Jannie de Villiers a visit at his office to question him about SA's grain production, he appreciated anew how seriously governments view food security.
"Not just our government, all governments, have looked at the overthrow of regimes in the Arab Spring uprisings of 2011 and are doing what they can to prevent the same thing happening to them," De Villiers says.
When food prices peaked in 2011, governments were overthrown and thousands died in unrest in countries such as Libya, Syria and Egypt. "National Intelligence visited me because it fears the possibility of a Rainbow Spring here," says De Villiers.
The agency is concerned, among other things, about the huge difference between what farmers can sell maize for (about R2200/t) and what it would cost to import it (R3600/t) - partly because of the weak rand. The 60% difference means that if production of SA's staple food falls for any reason, imports will be costly and felt throughout the food value chain.
The attention to food security is one of many positives for the local grain industry, especially maize, he believes. "The global demand pool for maize is huge," he says, noting that the biofuel industry uses a third of the crop harvested in the US, the world's biggest producer. "There is a middle-class explosion in countries such as China, India and Brazil, fuelling demand for protein and therefore a demand for maize as animal feed.
"Together it all means that maize production must be expanded, and sub-Saharan Africa is the biggest and most obvious region in which to do that." This middle-class explosion in SA has caused demand for white maize - traditionally preferred by humans - to flatten out. "It is no longer an aspirational product," says De Villiers. "The population is becoming richer and they are getting out of maize consumption and into bread, poultry and eggs." Growth in white maize sales is now less than 0,5%/year.
But the demand for yellow maize - used as animal feed - has been growing at a healthy 4%/year, though last year it was just 2% because of the woes of the local poultry industry. The rapid expansion of the world population and resultant huge pressure for food production holds immense benefits for Africa, he says. "Africa must be developed - or there is little hope of increasing world food production meaningfully, and this is recognised. Most of the available land is here," De Villiers says.
In the week that multinational DuPont bought SA seed producer Pannar, De Villiers predicted many similar deals involving SA agricultural companies. Chris Venter, CEO of listed agribusiness Afgri, was cagey when asked about this possibility, declining to discuss whether his company was considering similar deals. "Companies are always looking at expanding. Food companies and suppliers are always looking to roll out," Venter said. Afgri is a major storage provider for the local grain industry and Venter lists climate change, land lost to mining and the loss of commercial farmers in SA as the industry's biggest risks.
"When commercial farmers leave, it does not necessarily follow that their land is being used. Often it is lost." Chris Schutte, CEO of poultry producer Astral, says: "We constantly get people looking for an entry into Africa who want to come and see us. We've developed the skills to establish ourselves in Africa and multinationals burn their fingers when they try to go it alone. We've had informal discussions but no firm offers."
As a big maize user he believes that in the medium term at least farmers will plant as much as they can to cash in on good prices. This will benefit the food value chain. De Villiers confirms that about 1mha of "the best farmland in SA" has been lost to mining. "Let's hope you have learnt how to eat coal," he says.
Another problem tempering expectations for Africa's role in feeding the world is resistance to genetically modified maize on the continent. Only three countries, including SA, grow GM maize. "GM technology is an integral part of SA's food security policy. But the rest of Africa is not positive about growing it, though they don't mind eating it.
"The problem is that the calculated potential of the area available for maize growing in Africa is based on higher-yielding GM crops." Grain SA supports government's exclusion of maize from biofuel manufacturing, though it advocates the inclusion of soya and sorghum. The two crops, with sunflower, compete with their fellow summer crop, maize, for planting area and prices will dictate the futures of each. SA is producing about 800000t of soya a year, says De Villiers. A spate of recent investments in oil-processing capacity has taken it up by an additional 1Mt, encouraging entry into soya growing.
"We are importing 1Mt of soya oil cake for animal feed and the new capacity provides a big import-substitution opportunity. "In addition we will need another 3Mt of soya if biofuel legislation is passed," De Villiers says. Soya oil is made into diesel and sorghum into ethanol, competing with sugar. The Investment Development Corp has financed a sorghum-processing plant in Cradock. SA produces just 160000t/year of sorghum and the plant needs an additional 600000t/year.
"The demand pool to produce grain in SA, wherever you look, is positive, positive, positive," says De Villiers. Despite this, he says, SA has accumulated a huge skill capacity in maize production and is "still learning about soya". "I can't see maize production disappearing. There is a cultural thing about maize among farmers, especially black farmers, and it won't be replaced easily as a feedstock in SA. "Technology, climate and prices will determine how much, but there will always be maize in SA."