Grain SA used the second day of the NAMPO Harvest Day 2026 to intensify discussions with government and financial institutions around the urgent financial pressures facing grain producers, while also advancing practical long-term solutions aimed at strengthening the competitiveness and resilience of the sector.
A high-level breakfast engagement between Grain SA leadership, AFASA, major agricultural banks and Minister John Steenhuisen focused on the growing gap between production costs and producer profitability, and the need for coordinated interventions to support the sustainability of South African grain farming.
The engagement, convened by Grain SA and chaired by its Chairperson, Richard Krige, brought together senior representatives from ABSA, FNB, Nedbank, Standard Bank and Land Bank, reflecting growing alignment across organised agriculture, government and the financial sector on the need to support producer sustainability and longterm sector growth.
Discussions centred on the severe pressure currently facing grain producers due to rising input costs, low commodity prices and increasing financing requirements.
Grain SA highlighted that fertiliser and fuel together now account for approximately 45% of total production costs in many grain farming operations, with fertiliser prices in some cases having increased by as much as 80%.
“Producer profitability remains under severe pressure,” said Krige. “Input costs, financing costs and logistics pressures continue to squeeze margins at a time when grain prices remain under pressure. These realities require urgent collaboration across the value chain if we are to protect long-term food security, investment and rural economic activity.”
Strong concern was also raised around the impact of the D11 directive and the implications of debt restructuring requirements on agricultural financing.
Grain SA emphasised that current security cover requirements linked to restructured debt are placing additional strain on producers already operating in a difficult low-margin environment, while banks acknowledged the need for practical, sector-sensitive approaches that recognise the cyclical nature of agriculture.
The engagement resulted in agreement on further collaborative discussions with National Treasury around the practical implications of the D11 regulatory framework on agricultural financing and debt restructuring.
Grain SA, AFASA and participating banks agreed that agricultural financing models require greater recognition of the seasonal and cyclical realities of farming production systems.
Steenhuisen noted that agriculture continues to be one of the strongest contributors to South Africa’s economy and said government increasingly recognises the strategic importance of the sector for economic growth, exports and job creation.
“Agriculture remains one of the most bankable opportunities in South Africa,” Steenhuisen said during the engagement.
Steenhuisen also emphasised that maintaining a resilient grain sector remains critical from both a food security and economic perspective, noting that government would continue working with industry stakeholders and financial institutions to support the sector through current market pressures. He said agriculture is increasingly receiving the strategic attention it deserves as a driver of economic growth, exports and job creation in South Africa.
He further indicated that government is actively working to expand international market access for South African agricultural products and strengthen export opportunities for the sector.
“There is growing international demand for our agricultural products, and we are working very hard as a department to open up those markets because that is where the premium lies for South African producers,” Steenhuisen said.
Grain SA stressed that improving market access and expanding exports remain critical short-term priorities amid current grain surpluses.
The organisation continues to advocate for stronger export competitiveness, improved logistics efficiency, reliable rail and port performance, and the removal of regulatory and phytosanitary barriers limiting access to international markets.
While acknowledging the severity of current conditions, Grain SA emphasised that the sector is not standing still.
A major focus of Grain SA’s engagements during NAMPO has been the need to unlock additional demand channels and value streams for grain production.
Central to this is the organisation’s “grain on legs” strategy – expanding domestic livestock, feed and protein value chains as a mechanism to convert grain into higher-value products before export.
“When logistics systems are constrained, we must not only ask how to move more grain — we must ask how to move more value,” Krige explained. “The protein economy creates opportunities for additional demand, more jobs, stronger rural industries and improved resilience across the agricultural value chain.”
The discussions also reinforced the strategic importance of biofuels as part of South Africa’s future agricultural growth trajectory.
Grain SA believes biofuels can play an important role in supporting additional domestic grain utilisation, strengthening market diversification and improving long-term producer viability, while contributing to broader industrial development and energy objectives.
“Biofuels should be viewed as part of a broader market-development strategy that includes food, feed, fuel and industrial uses,” said Krige. “South Africa must continue exploring practical opportunities that create sustainable new demand for grain production.”
Discussions also explored longer-term risk mitigation mechanisms for the agricultural sector, including blended finance and index-based insurance models aimed at improving resilience against droughts, floods and other catastrophic production risks.
Steenhuisen confirmed that government has already initiated discussions with National Treasury and industry stakeholders around shared-risk insurance approaches that could accelerate disaster support while reducing financial pressure on producers and the fiscus.
Grain SA said the engagement reflected the importance of stronger alignment between organised agriculture, financial institutions and government in addressing both immediate financial pressures and longer-term competitiveness challenges facing the grain sector.
“The sector can only navigate these cycles through partnership, transparency and practical collaboration,” Krige concluded. “NAMPO provides an important platform to engage openly on the challenges facing the sector, while also driving practical solutions that improve competitiveness, expand markets and secure the future sustainability of grain production in South Africa.”
