Summer 2012 El Niño may provide opportunities for additional cash crops in SA

With a prediction of below average rainfall this summer due to the possible effects of an El Niño, crop production in certain agricultural areas of South Africa may be under severe pressure this season.

Summer crop production in the central to western parts of the country relies on stored water in the rooting zone of the soil which is accumulated from rainfall in the pre-production season. The current status of soil water is relative low and production must now rely of rainfall during the production season. With low levels of accumulated rainfall in the Free State and Northwest, crop production in these regions may be under strain.

However, eastern production areas, especially Mpumalanga, received more than 20mm and in some areas more than 100mm in the first week of September and this can ensure a good start to the planting season that is in full swing early October.

This is according to Johan van den Berg, manager of specialised crop insurance at Santam, South Africa’s leading short-term insurer.

“The presence of an El Niño phenomenon does increase the risk for drought and other extreme climate events like frost and hail however it is by no means a guarantee,” says van den Berg. “However, other contributing factors such as the general condition of agriculture, the financial status of farmers, soil moisture conditions, and commodity prices play an important role in decision making and risk appetite of farmers and other key players in industry.”

It must also be taken into account that an El Niño event usually stimulates early summer rainfall over Southern Africa but decreases the probability for rain in the mid to late summer, especially over the central to western parts. With the absence of tropical cycles, El Niño events in the past were also responsible for some rain in the critical February period when the summer grain crop is at its most vulnerable for drought.

A weak El Niño effect has been observed since June 2012 before a return to normal sea surface temperatures occurred in September 2012. However, a redevelopment of a weak El Niño is still expected later in the season until March/April 2013.

The effect is part of the El Niño Southern Oscillation (ENSO) phenomenon and the events occur on average in about 25% of years. This happens when abnormal warming of sea surface water occurs in the equatorial Pacific due to the weakening of the south east trade winds or even a reversal of the normal wind pattern. A pool of warmer than normal water gathers along the equator between South America and Australia. In about 25% of years the opposite or La Niña may occur when sea surface temperatures are cooler than normal due to a strengthening of the south easterly trade winds and in about 50% is the trend more towards normal or average sea surface temperatures.

Kobie de Beer, manager of crop insurance services at Santam recommends several ways farmers in potential drought prone areas can mitigate their risks in the upcoming summer months:

1.To increase infiltration of rain water and to conserve water in the soil, eradicate runoff and soil loss due to erosion. The cultivation techniques should allow that most of the stubble be left evenly spread over the field after harvesting. Tine implements must be used to make sure the stubble stays on top, and do not get mixed with the soil, as would happen with conventional ploughing. If possible, revert to minimum- or even no-till practices.
2.Control weeds to ensure that available water is used by crops. Minimise the number of cultivation actions to control weeds, rather use chemicals. Control weeds soon after emergence so they use very little moisture and can be controlled by lower dosages of herbicide.
3.Mother Nature is unpredictable and even the most well-informed farmers may face an unexpected weather pattern that threatens their livelihood. Mitigate risks ahead of time by investing in one of two insurance plans for grain crops. The first plan would be insurance against hail damage, where a farmer insures his crops for his chosen yield and value per tonne (within limits). Here they can chose the level of cover according to their needs.
The second one is a multi peril crop insurance (MPCI) where, based on the long term yield for the specific farming enterprise, a percentage (typically 60%) of this is guaranteed. Here all uncontrollable risks are covered, and in effect claims are paid once the yield drops to below the guarantee. This is a very important form of insurance that gives surety to the banks or other input financiers, that obligations will be met at the end of the season.

The dry weather in other parts of the world may provide agricultural opportunities in South Africa, similar to that in the United States. The severe drought currently being experienced in parts have resulted in a maize crop of approximately 100million tonnes less than expected, thus resulting in a low global supply of maize and other summer grains and relatively high commodity prices. Due to the high domestic price of summer crops, there are intentions to establish a relatively large area of maize and soya beans, provided soil water conditions and rain are favourable.