The rural development agency has planted close to 30,000 hectares since 2008. 

AsgiSA Eastern Cape (EC) says cost reduction, refurbishing silos and temporary grain storage methods are measures planned to counter negative impact of maize price dips, funding and logistical challenges.

The rural development agency says it will reduce cropping by less than 10% from this year due to financial and logistical constraints.

Agency planted close to 30,000 hectares since 2008

AsgiSA EC will have planted close to 30,000 hectares since it first began the programme in 2008 says the agency's agronomist Luvo Qongqo.

Since the initial planting, a feasibility study and funding proposal for the establishment of three regional silo complexes at Butterworth, Tsolo Junction and Matatiele has been completed.

With no storage facilities, AsgiSA EC says it had to transport its crops to the market immediately in the last harvest. This meant it could not reap the rewards of the improved prices.

However, plans are afoot to establish temporary structures "to ensure that the grain is released at right intervals to the market in order to benefit from price fluctuations".

Butterworth silo renovation on the cards

"The idea is to start with the renovation of the Butterworth silo complex so it is ready for the next harvest in June 2011."

AsgiSA EC's dry land cropping programme is part of the agency's high impact priority projects (HIPPs); agriculture and agro-processing.

The rural development agency's third cropping season of maize, soya and dry beans started in November 2010 and is expected to continue until mid-January.

Qongqo says the last harvesting season was hampered by lower than projected maize prices in the futures market, which resulted from an oversupply in the market.

"In the last season, South Africa had a bumper crop that resulted in a surplus of four million tons of maize.

"This resulted in the maize price tumbling to R1,100 in on South African Futures Exchange (Safex) during harvesting," says Qongqo.

Lower yields diminished revenues and profits, leading to a funding shortfall, he adds.

"This stems from delays in the harvesting process, maize theft by neighboring communities and cattle damage.

High transport costs face project

"We are also faced with high transport costs of up to R400 per ton, which reduces the the amount that can be reinvested into the projects," he adds.

AsgiSA EC has also partnered with farming business Farm Secure, in order to finance some of its Ongeluksnek projects in the far north of the province.

"This partnership has opened opportunities for markets access, new farming technologies and funding for our projects," he says.

The medium term interventions will include exploring developing the development of milling plants for value-adding opportunities by rural communities and creating more job opportunities in the former Transkei.