Fruit farm liquidations reveal need for multi-disciplined approach

Farmers must be 'super' managers, says auctioneer Ray Smuts AS MORE farms in the Western Cape come under the auctioneer's 'liquidation hammer' the signs are increasingly evident there is a lot more to the business of growing produce than consistently benevolent weather patterns and mere agricultural know-how. Who could have thought a decade or so ago that sound skills would be required in finance - was that not after all the bank's function? - or in human resources? Yet that is what farming seems to be all about these days - becoming more 'rounded'. Leon Deacon, spokesman for the Michael James Organisation, one of the country's top auction houses, goes so far as to say the fruit farmer of today has to be a 'super' manager. "Fruit farming is not only capital-intensive but labour-intensive; that means farmers have had to become masters of a number of disciplines including finance and human resources." Estimating that the Cape's few leading auction houses are handling up to a dozen or so mostly fruit farm liquidations collectively a month, Deacon points to several factors that have given rise to the liquidation dilemma: several years of poor production due to insufficient rain and cool climes, high interest rates, the strong competitive emergence of the likes of South America and China from an export perspective, and the international consumer demand for new fruit varieties such as Royal Gala and Pink Lady apples. He hastens to add on the positive side there are areas, Grabouw and Elgin included, which continue to produce good quality export fruit, a trend set to continue if the weather continues to play along. The July downpour, highest in 44 years, has certainly raised hopes. Recently the prize Kromvlei Farm at Elgin which, proclaim the experts, would have fetched R20 million in better times, received a top bid of just over R11 million at a Michael James liquidation auction. The offer for the 560ha property specialising in export pears and apples has yet to be confirmed as there are hopes of a higher price from potential international buyers. Recently, the 46ha Watervliet farm at Simondium near Paarl, said by farm manager Jasper Immelman to have been worth more than R12 million two years ago, was auctioned at a liquidation sale to two Johannesburg businessmen intent on taking up farming for a tad more than R3 million. "We would have liked a higher price but there are nevertheless signs in this upward and downward business of farming that prices are slowly but surely improving," says a Boland auctioneer who prefers to remain anonymous. At least six farms are due to be auctioned in the next few weeks.