GM-Maize-Report

Source: Grain SArising steadily, and at a higher rate thanthe producer price for maize, for over 20years. The three largest production costs formaize farmers are fertiliser, fuel, and seed(for farmers planting GM herbicide tolerantmaize, herbicides are also a significant cost). 67This has coincided with ever increasingconcentration of the market for agriculturalinputs. With the takeover of Pannar Seedby Pioneer Hi-Bred, there are now two seedcompanies that dominate the maize seedmarket in South Africa: Pioneer Hi-Bred andMonsanto. A 2008 report stated that 86% ofthe domestic fertiliser market, for which maizecultivation accounts for 40% of consumption,was controlled by Sasol, Yara and Omnia. Inthe interim, Yara’s South African operationwas sold to Kynoch, who were later takenover by Farmsecure. Current market sharesare not available, though after a CompetitionCommission investigation in 2010, Sasol agreedto sell five of its regional blending plants andconcentrate on the wholesale level. 68Production data from Grain SA reveals howthin margins in maize production can be,and how sensitive production is to factorscompletely beyond the control of the farmers.The following example is based on productioncosts for GM insect resistant maize, in thecentral and northern Free State, and cannot beapplied nationally. It is also dependent upon anumber of assumptions and generalisationsbased upon yield, the SAFEX price for maize, etc.Nonetheless, it is useful as a guide in assessinghow much of the price of maize meal a farmeractually gets.Yield (ton / ha)3.5 4.0 4.5Seed (R/ha) 566.81 596.64 626.47Fertiliser (R/ha) 1 453.7 1 749.7 1 985.4Fuel (R/ha) 803.8 817.9 832.1Total directlyattributablecostsTotal costincludingphysicalmarketing (perton)Current Safexprice (per ton)5,255 5,727 6,1312,405 2,252 2,1182,400 2,400 2,400Profit (per ton) -5 148 281Source: Grain SAHandling and storageThough grain handling has been fullyderegulated and privatised in South Africa,the bulk of grain storage infrastructure wasbuilt prior to this period. Under the old Co-18 AFRICAN CENTRE FOR BIOSAFETY