LARGE-SCALE GROWER SURVEYS  


Richard Nicholson





The SA Canegrowers’ Economic Research department undertakes the annual Large-scale Grower Labour Productivity and Cost surveys to continue the collection of grower cost information which enables the association to represent growers in policy decisions at local grower, industry and government levels. Without this information, the association would not be able to represent growers accurately.




Large-scale Grower Labour Productivity survey


The 2016-2017 season showed a decline of 9% in the estimated total number of workers from the 2015-2016 season. This continues the decline in labour utilisation on farms due to the increasing costs of labour. As an industry average, the total number of labour units per 1 000 tons of cane was 3.21. This is a decrease of 15% of labour units per thousand tons of cane due to improving production in the dryland growing areas recovering after the drought. 




Staff wage costs per ton of cane decreased by 5% – from the 2015-2016 to the 2016-2017 season. The primary contributing factor was the increased production, mainly in the dryland regions due to the improvement in production. 



Wage costs per area under cane (AUC) decreased by 7%, which is due to the improvement in production as well as lower staff units as growers are improving labour use efficiency. This could be achieved after the drought where less labour was required as well as the increasing costs of labour. There is also less labour available for certain on-farm tasks, like cutting cane. These trends need to be identified to ensure that solutions can be found in the future. 


TOTAL FARM STAFF WAGES ALLOCATION TO VARIOUS CATEGORIES


The total farm staff wages allocation figure above provides insight into the various staff categories and their portion of the farm wage bill. The permanent field workers, cutters and stackers and general staff and drivers are the significant contributors to total farm wages.




Large-scale Grower Cost Survey


The 2016-2017 season saw a significant improvement in yields especially for the Dryland growers. Irrigated growers were still under pressure from the drought conditions. Water restrictions caused significant lower yields and overall tonnages achieved by these growers in the 2016-2017 season. However, a 23% increase in the RV final price compared to the 2015-2016 final price gave growers some welcome income relief as the drought was ending. 


The 2016/17 Large-scale cost survey was completed in April 2018. The survey sample comprised of 130 suitable grower returns. This represents 10% of the LSGs and 20% of the Area Under Cane for the 2016-2017 season. The decreasing response rate is a concern to the organisation and therefore additional farm level analysis is being introduced using the typical farm methodology.     


The grower data gathered and analysed showed the following results: 

  • Real (inflation adjusted) Revenue increased by 15% compared to the previous year.
  • Real operating expenditure increased by 14% compared to the previous season. 
  • Leading to a significant improvement of Real Net Operating Income of 24%.
  • Increases to the major cost items were 6%, 9% and 22% for Farm Staff, Chemicals and Mechanical Maintenance respectively. 
  • Decreases to major cost items include, Fertiliser 3% and Fuels and Lubricants 9%.






Small-scale Grower Cost Survey 


The 2015/16 season under review was incredibly tough for all growers but especially the SSGs as they felt the effects of one of the worst droughts in 100 years. In some areas yield dropped to less than half the normal tonnage per hectare. The SSG cost survey was changed for the 2015/16 season to focus on the Irrigated and Dryland Areas separately which would provide more insight into the differences between the two areas. The results showed that the Irrigated growers were able to make a small profit from their farming operations as the drought had not taken full effect in these regions. However, the Dryland growers made losses during this season. This loss is completely understandable due to the severe drought and subsequent low yields experienced during the 2015/16 season. The drought conditions are reflected in the financial outcome for small-scale growers making a loss on average of R18/ton. This is significant for the SSGs, due to their size of farming operation do not have the capacity to absorb losses of this nature.


Small-scale Irrigated Growers


The figure below presents the distribution of costs for small-scale irrigated growers. Most of the costs are attributed to Planting (27%). Transport and haulage contributes 26%, followed by Fertiliser (16%), Sundry (13%) and Chemicals (11%) and Harvesting (6%). When one adds Harvesting to the Transport and Haulage costs the total for that process makes up 32% of the total costs. For a small-scale grower, this is largely done by contractors. Contractor rates at harvesting, infield loading and transport remain a concern for the sustainability of small-scale growing. Other costs consisting of firebreaks, road maintenance, crop insurance, bookkeeping, electricity, water and sundry items make up 13% of the total expenses of small-scale growing.




Small-scale Dryland Growers


The figure below presents the distribution of costs for small-scale dryland growers. Most of the costs are attributed to Sundry (24%), followed by Haulage and transport (22%) Planting (18%) and Fertiliser (18%), and Harvesting (9%) and Chemicals (8%). When one adds Harvesting to the Transport and Haulage costs the total for that process makes up 31% of the total costs. For a small-scale grower, this is largely done by contractors. Contractor rates at harvesting, infield loading and transport remain a concern for the sustainability of small-scale growing. Other costs consisting of firebreaks, road maintenance, crop insurance, bookkeeping, electricity, water and sundry items make up 24% of the total expenses of small-scale growing.



Richard Nicholson
is South African Canegrowers Manager: Economic Research




arrow_upward