Declining agri debt could show lack of investment

15 November 2021 | Agriculture

ELLANIE SMIT

WINDHOEK

With agricultural debt dwindling over the past few years, this could suggest a decline in investment in the agricultural sector due the harsh challenges the industry has been faced with.

According to Agribank’s Monthly Market Watch for October, agricultural debt by commercial banks and Agribank stood at N$7.345 million, which is a 134% increase since 2010.

However, on an annual comparison, agriculture debt decreased by 6.7% from N$7.871 million in 2019.

“Although the deceleration in debt is welcomed, this could also suggest reduced investment and lower agricultural expansion as a result of existing and recurring challenges such as drought, pests and Covid-19.”

Agribank further said that while the livestock market continues to decline, the goat and weaner market seems to be faring well and could present an income opportunity for farmers who have adopted resilient and sustainable farming business models.

It said the livestock subsector has remained stagnant, mainly on the back of the dwindling offtake rates.

Concern

“This remains a concern for the overall agriculture performance for the current year.”

The bank added that comparing year-on-year, the number of cattle marketed increased by 6.1% to 21 317 in September 2021, compared to 20 089 the prior year.

According to Agribank, the improved performance can be ascribed to the number of slaughtered cattle by export abattoirs, doubling to 4 771 in September this year.

“Although a gradual increase in the number of cattle marketed was observed, this remains significantly below the historic averages.”

Meanwhile, the total number of small stock, sheep and goats marketed stood at 24 609 in September this year, which is a 6.2% decrease compared to 26 240 in the prior year.

The decline can be attributed to a 11% reduction in the number of sheep marketed due to reduced slaughter activity at the Aranos abattoir, Agribank said.

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