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February 28, 2011

Flooding costs South African farming $392 million: industry

Floods in South Africa have cost the farming sector about 2.8 billion rand in damages, and farmers are hoping for a government bailout, an industry official said on Monday.

Heavy rains, mainly in January, killed more than 100 people and saturated farms in one of Africa's major food producers, leading the government to declare 33 municipalities disaster areas.

"The flood damages around the country run to about 2.8 billion rand, according to our assessments," Johannes Moller, president of Agri SA, told delegates at an agriculture conference.

He said crop losses accounted for 1 billion rand, while infrastructure losses on farms, mostly along the Vaal and Orange rivers, cost farmers about 1.8 billion rand in the Northern Cape, with the remaining 200 million in damages elsewhere in the country.

Moller later said  they were hopeful government would provide financial assistance to get more than 1,000 commercial and emerging farmers back on their feet within 12 months.

"I'm quite hopeful that in the end that government will decide to give financial aid, because that's the only way that we can start rebuilding and do it within one season," he said.

Agriculture Minister Tina Joemat-Pettersson said last month that there would not be a financial package, but rather an "assistance package", including talking to banks to negotiate terms of debt payments for those who incurred losses due to the floods.

"I think in this case we would prefer if government paid some damages upfront and get a commitment from farmers that they will create jobs (in return)," Moller said.

Flood-affected farmers would be satisfied if 25-50 percent of the 1.8 billion infrastructure losses could be borne by government, Moller said.

He said in the absence of the financial assistance, some farmers may become bankrupt, but the majority should recover, although it may take between five and eight years.

If government left commercial farmers to fend for themselves, and the agriculture sector was hit by another natural disaster next year, it would have a "serious impact" on food security, Moller said.

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