Water research commission

Maize

The importance of maize as a crop in South Africa can be summarised by quoting from the DAFF report, Maize Market Value Chain Profile (2012):

Maize is the most important grain crop in South Africa, being both the major feed grain and the staple food for the majority of the South African population. About 60% of maize produced in South Africa is white and the other 40% is yellow maize. Yellow maize is mostly used for animal feed production while the white maize is primarily for human consumption. Maize is the second large crop produced in South Africa after sugar cane. The maize industry is important to the economy both as an employer and earner of foreign currency because of its multiplier effects. This is because maize also serves as a raw material for manufactured products such as paper, paint, textiles, medicine and food. (p3)
Some yellow maize is also used for the production of snack and cereal products as well as animal feeds.

Maize kernels are usually milled after harvest into products such as samp, maize grits and maize rice, unsifted, sifted, coarse, super and special maize meal. Wet milling is a process carried out in water after which the kernel can be separated into its components, the husk, starch, gluten and the germ. These are used in animal feed production. The starch pastes from maize are also used to manufacture starch-based puddings and salad creams. The starch paste is also used industrially for paper coating and sizing, textile sizing, the manufacture of corrugated boards and adhesives (DAFF, 2012c).

The germ and the gluten are used in the manufacture of maize oil and animal feed supplements. The maize oil can be used in cooking, where its high smoke point makes it valuable for frying food. Maize oil is also used as one source of bio-diesel. Other industrial uses for maize oil include soap, salve, paint, rust proofing for metal surfaces, inks, textiles, insecticides, and even as a carrier for drug molecules in pharmaceutical preparations. (DAFF 2012)

Figure 48: The Maize Product Chain. (Source DAFF 2012)

Though the area planted to maize has been decreasing slightly, the yield has generally increased to maintain, and even increase the total production (see figure 48). The industry is divided into commercial and developing agriculture. Commercial maize farmers are estimated at 9,000 providing direct employment for an estimated workforce of 128,000, but the number of developing small scale maize farmers is unknown. Commercial agriculture produces about 98% of maize in South Africa, while the remaining 2% is produced by small scale farmers. The value of maize production in South Africa varies according to production (between 8-12 million tons per annum) and is averaged at R1.5 billion (DAFF 2012c). Maize is the staple diet of a large proportion of people of South Africa and is therefore produced by emerging farmers to provide basic household requirements. Excess production is sold as green mealies or grain to supplement the household income.

Figure 49: Maize production and area planted 2001-2011. (Source: DAFF 2012)

The amount of maize produced is directly proportional to the weather conditions experienced before, during and (to a smaller degree) after harvest. The study on maize was conducted in Carolina situated in Mpumalanga province which is the second largest maize-producing province in South Africa. In Oosthuizen’s report that the modelling results show intermediate climate scenarios from five different Global Circulation Models (GCM’s) pose little or no threat to maize production in the Carolina area. The modelling results project an increase in yield for maize production. However, the report further states that maize production in the area could not be assessed in isolation due to the fact that there are other factors that must be taken into consideration.

This report extends the Oosthuizen report beyond the farm level, as it seeks to clarify the impact of other factors that could affect the maize value chain in the study area with a view to understanding the linkages with other forms of vulnerability such as; social, economic and environmental vulnerabilities. It seeks to investigate whether the impacts of climate change, including the effect of an increase in the yield of maize production in Carolina farms, may have other impacts and/or could actually be sustained beyond the farm gate as production enters the value chain.

Figure 50: The maize market value chain (Source: Maize Tariff working Group, 2005)

As illustrated by Figure 50, a sustainable food value chain framework is employed to clarify the actors within the South African maize value chain, since Carolina farms could not be taken in isolation. Table 55 describes the South African maize market value chain and profiles its actors.

7.3.1 Actors in the South African maize value chain and their exposure to CC impacts

According to DAFF’s 2010-2011 profile of the South African maize market value chain (DAFF 2012c), the maize market value chain can be classified into different levels: producers of maize (farmers), silo owners (those who store maize on their own account and on behalf of others); traders in maize (buy and sell maize); millers of maize (those who convert it to usable form); and end users. These actors can be broadly classified into primary sector, secondary sector and tertiary sector. Table 55 summarises the actors, their functions and vulnerabilities.
Table 55. South African maize value chain actors, their functions and vulnerabilities

		Vulnerabilities
		Social	Economic	Environmental
Actors	Functions
Primary	Input suppliers, producers and silo owners/storage facilities owners	Membership of association, access to information, etc.	Access to subsidy, credit facilities, government policies, etc.	Exposure to extreme events i.e. flooding, drought. Heat waves affecting stored grains.
Secondary	Millers, animal feed manufacturers, and processors	Norms, values and belief system	Licensing/labelling, disease outbreak in livestock, etc	Impacts on the immediate environment.
Tertiary	Traders (export and import markets), retailers and transporters	Barriers to entry, road/rail network, telecommunication, other social amenities, etc.	Export/import parity.	Global environmental change from trading countries

While modelling results indicate that climate change poses no threat to maize production in Carolina farms, storage and handling may be hampered by extreme events both in the short and long run. It is therefore important to consider the possible effect of extreme events on the storage of maize in Carolina. The following are the possible linkages between vulnerability and adaptation of maize yield to climate change/variability in Carolina farms:

1. 
   Maize farmers
   

• 
  While yields are projected to increase, there are still climate risks associated with increasing temperatures and erratic rains especially in marginal areas. The decrease in area planted to improve economies of scale will impact on the labour force, with or without increased yields.
  
• 
  The costs of conservation agriculture approaches may require more capital outlays, but are expected to be more than compensated by increased returns through increased soil moisture and fertility, and reduction in pests.
  

2. 
   Silo Owners (often include millers)
   

• 
  Storage and handling: Beyond the farm gate, extreme events associated with climate change and variability may affect maize in the form of increased temperatures and heat waves, resulting in a higher post-harvest risk of disease and losses.
  
• 
  Increased input costs borne by farmers and by silo-owners will drive prices higher and possibly increase the risk of competition from imports.
  

3. 
   Traders
   

• 
  Traders are actors that can influence prices by hedging and adopting longer term positions in the financial markets. The perception of changing climate risk can be enough to influence prices and have forward and backward knock-on effects.
  

4. 
   Millers and processors
   

• 
  Maize products are used in a multitude of different products outside of the food chain, and thus offer some resilience to consumer demands for food. Thus price increases are not always directly borne by consumers of maize products as such but by those who purchase goods using relatively small amounts of maize products in their manufacture.
  

5. 
   Wholesalers/Retailers
   
   • 
     Distribution risks due to transport cost and threats, and increased risk of spoilage due to increased temperatures and variable, possibly more intense, rainfall
     
   • 
     Increased costs of raw materials leads to higher selling prices, opening up competition to imports from other countries.
     
6. 
   Socio-economic issues
   
   • 
     Any risks carried through to retailers will be reflected in the price and supply of maize meal. Since this is a staple food for many, any increases in price pose a serious threat to food security.
     

In general, once again the most significant linkage between the impacts of climate change at the farm level to the rest of the value chain is reflected in the variable price of the raw material, i.e. milled maize flour. When climate change causes changes in yield and/or quality in the production of maize, this will affect the price of the maize (admittedly subject to world prices and risks), which in turn will impact on the activities of all the other actors in the value chain. While inputs costs promise to increase making it more difficult to farm maize, and leading to smaller areas being planted (though increasing yields are evident) the number of individual farms may decreasing, leading to a reduction in employment numbers. This will have a knock-on effect for food security.

Quality is an aspect which can be carried through many of the components of the value chain as increased temperature leads to a higher risk of spoilage, which can be mitigated against by increased air-conditioning and shorter transport periods.

The indirect linkages of climate risk, which can be ascribed to the impacts of increased temperature and more variable rainfall, are reflected in increased costs of non-maize inputs such as electricity and transport.

4.