Mpumalanga: mining vs farming

Agriculture and mining have been the key driving force behind the South African economy for a number of centuries.

Although their contribution to GDP has shrunk significantly as the economy has developed over time, these two industries remain at the heart of economic growth and the creation of unskilled job opportunities.

With the sharp rise in the world’s demand for minerals, driven mainly by India and China, the rate of expansion in mining activities over the past 10 to 15 years has been phenomenal.

The areas where the expansion in mining activities has and is taking place, ranges from desolate areas with limited agricultural potential, to areas where high potential agricultural land, for example in the Mpumalanga Province, is taken over by mining activities.

At the current rate of coal mining in Mpumalanga, it was calculated that approximately 12 % of South Africa’s total high potential arable land will be transformed, while a further 13.6 % are under prospecting by the mines in Mpumalanga. For the purpose of this study, a selected pilot area was identify to illustrate the potential impact of mining on agriculture. 

The pilot area under consideration

Based on Map 1 below, the pilot area has an approximated total area of 170 763 ha, of which 99 518 ha is made up of high potential arable land and 38 020 ha is classified as moderate potential arable land. Of the 170 763 hectares of land, 84 428 hectares are considered to have high to low cultivation taking place on them and a further 5 956 hectares can be regarded as pivot irrigated land.

 

Map 1: Pilot study area containing the field crop boundaries, with current & prospected mining areas. Delmas, Ogies and Leandra, 2012.

Source: Compiled by TIMS, 2012

 

The total high, medium and low cultivation hectares influenced by current mining are 27 431, 17 178 and 2 495 ha respectively, as well as 3 180 ha for pivot irrigation. Then from the proposed prospecting areas another 13 485, 12 448 and 638 ha, within the same field crop boundaries as mentioned, and 2 488 for irrigation. This was calculated by TIMS Consulting, using ARC GIS mapping, with the field crop boundaries data provided by AGIS, 2011. For the purpose of this study, it was calculated that an approximated total of 79 967 ha (Map 1) of the current cultivated land in the Delmas, Ogies and Leandra district will potentially be taken over by the mines. The time frame for this is uncertain, but the most likely scenario is that this area will be taken up by mining activities over the next ten to twenty years.

3. Economic impact of mining on agriculture in the pilot study area.

Based on the findings from the above maps, further calculations can be made. It is important to note that the data from the maps provide an indication of potential hectares to be lost since the actual hectares cannot yet be verified by any of the governmental departments. Evaluating the true economic impact of mining will have to go further than the pilot area, as externalities such as the pollution of the countries scarce water sources and air pollution cannot be left out of consideration.

In order to calculate the loss in maize production, two scenarios have to be taken into consideration. The Table 1 illustrates the loss in production, only due to the current mining activities and Table 2 shows the effect if the area under prospecting is also taken into consideration. The tables were compiled based on the average of 75 % (Figure 1) maize cropping for the Mpumalanga, and further 25 % soybeans.

 

 

Figure 1: Average share in production for Mpumalanga from the four summer crops 

Source: Adopted from SAGIS 2012, compiled by 2012

 

Table 2: Maize tonnage losses due to current mining activities, 2012.

Loss in maize production due to current mining takes place

 

Hectares

Potential t/ha

Ha if 75 % is maize (fig 1)

Tonnage

High cultivation

27 431.0

8.5

20 573.3

174 872.6

Medium cultivation

17 178.0

6.5

12 883.5

83 742.8

Low cultivation

2 495.0

4.5

1 871.3

8 420.6

Pivot irrigation (assuming 40 % maize)

3 180.0

14.0

1 272.0

17 808.0

Total

 50 284.0

 

 36 600.0

284 844.0

 

Table 3: Maize tonnage losses if prospecting area is also transferred out of agriculture.

Loss in maize production due to prospecting areas become operational

 

Hectares

Potential t/ha

Ha if 75 % is applied for maize (Fig 1)

Tonnage

High cultivation

13 485

8.5

10 113

85 966

Medium cultivation

12 448

6.5

9 336

60 684

Low cultivation

638

4.5

478

2 153

Pivot irrigation( assuming 40 % maize)

2 488

14.0

995

13 932

Total

29 059

 

20 923

162 736

 

Without taking expected yield improvements into consideration, it is estimated that approximately 447 581 tonnes of maize could be taken out of production from this area over the next 20 years, if all the current and proposed future mining (on prospected areas) takes place.

 

4. Consequences due to change in maize area. 

The partial equilibrium model was used to provide an indication of the projected long-run impacts on maize markets if 447 581 tonnes of maize are taken out of the market. It is important to note that this shock was analysed under the assumption that the full potential loss in maize production would occur by 2020, which is not necessarily the case. The shock was simulated in the model by gradually introducing a decline in the area under maize production. The total decline in the area under production towards 2020 amounted to 79 343 ha as calculated in Table 5.

 

 

Figure : Impact of mining in the pilot area on national yellow maize market 

Source: Partial Equilibrium model, model, June 2012

 

It is important to note that this is only the impact of the pilot area on the national market price, in other words, the loss of 79 343 ha of crop (maize) land. In a proposed second phase of the research the magnitude of the impact on national maize markets will be significantly larger as preliminary indications are that approximately 400 000 ha of high potential land can be lost in total in Mpumalanga. If the anticipated rotational cropping practices brings soybean up to 40 % of the total maize area over the long run, it implies that approximately 240 000 ha of high potential land will be lost to maize alone. At a conservative average yield estimate of 5t/ha, this implies that 1.2 million tons of maize will be taken out of the market.

Naturally, other areas in the country that are currently underutilised will potentially be brought back into production as market prices rise significantly to absorb some of the crop losses, however since the potential of the land is lower than the potential that is lost, the average costs of producing 1 ton of maize in SA will increase, which will in the end affect food prices.     

 

5. Summary

This study has only provided a high-level view of selected economic effects of mining on agriculture in a pilot study area. Although the short-run economic impacts on farming level as well as medium impacts on maize markets were illustrated, a significant amount of research still has to be undertaken on the long-run macro-economic, environmental and social impacts. Both mining and agriculture play a critical role with respect to job creation and contribution to the gross value of the country. Over the short-run mining’s contribution to the country’s gross domestic product (GDP) exceeds the contribution of agriculture by a significant margin, yet over the long run, agricultural practises are more sustainable. Therefore, the long-run impacts on food security and employment become even more important to understand. This paper only illustrates the impact of one small pilot area. In reality, the total Province has to be taken into consideration.  

 

 

References.

Dillon Emma J, Hennessy Thia C, Hynes Stephen, Garnache Cloe, and Commins Verena: 2007. Measuring the sustainability of agriculture. The Rural Economy Research Centre. Athenry, Galway. Working Paper Series. Working Paper 07-WP-RE-01.

 

CSIR: State of Environment Report 2001. 2002. Mpumalanga Province. Prepared for Department of Agriculture, Conservation and Environment, Mpumalanga Province. CSIR, PO Box 17001, Congella, KZN. August.

 

CSIR: State of Environment Report 2003. 2005. Mpumalanga Province. Prepared for Department of Agriculture, Conservation and Environment, Mpumalanga Province. CSIR, PO Box 17001, Congella, KZN. 

 

Hoffman, T. and Ashwell, A. (2001) Nature Divided: Land Degradation in South Africa.

University of Cape Town Press, pp168. (Cited by CSIR, 2005).

 

Hoffman, T., Todd, S., Ntshona, Z. and Turner, S. (1999) Land Degradation in South Africa.

Prepared for the Department of Environmental Affairs and Tourism, pp245. Available at

http://www.nbi.ac.za. (Cited by CSIR, 2005).

 

Kellar G and Warrack B. (1997). Statistics for management and economics. Fourth Edition.Duxbury Press, London.

 

Mpumalanga State of the Environment Report. 2003. Prepared for:Department of Agriculture, Conservation and Environment Mpumalanga Province. Prepared by: CSIR, PO Box 17001, Congella, KZN, 4013. Final Version August 2002.

 

Schoeman J.L, van der Walt M, Monnik K. A, Thackrah A, Malherbe J. Le Roux & R.E. 2002. Development and application of a land capability classification system for South Africa. ARC-Institute for Soil, Climate and Water, Private Bag X79, Pretoria, 0001. South Africa. April.

 

STATE of THE ENVIRONMENT. 2003. Department of Environmental Affairs. Directorate Information Management, Private Bag X447, Pretoria, South Africa.

 

Venter, A., Herselman, J.E., van der Merwe, G.M.E., Steyn, C. & Beukes, D.J., 2001.

Developing soil acidity maps for South Africa. In: Abstracts volume, 5th Intl. Symp. on

Plant-Soil Interactions at Low pH, Bergville, South Africa, 12-16 March 2001, (Cited by CSIR, 2005).

comments powered by Disqus

RW1
R1
R1
R1

This edition

Issue 30
Current


Archive


Harvest_SA The Glass Remains Half-Full For Tourism Despite Dip In Business Performance https://t.co/8YPeMWcA43 https://t.co/dSrQoHWp11 3 days - reply - retweet - favorite

Harvest_SA Challenge set for macadamia nut industry to maintain profitability for farmers https://t.co/gCHNgLWKx4 https://t.co/1jayPyqXXd 10 days - reply - retweet - favorite

Harvest_SA A snapshot of the agricultural sector and its recovery from the drought https://t.co/B8KywQL7gf 10 days - reply - retweet - favorite

  • Sabelo Mabhuti Zitha
  • Carl Dillon
  • Wilna Ehlers
  • Thabang Makokoe