Roundup: S. Africa's drought-hit agricultural sector appeals for gov't aid

South African agricultural stakeholders on Wednesday urged the government to declare the current drought a national disaster and provide 12.5 billion rand (about 800 million U.S. dollars) in disaster relief for the next three years.

South Africa is experiencing a severe drought that hasn't been seen in 100 years due to the El Nino effect, said Johannes Moller, president of AgriSA, the country's biggest farmers' organization.

The government has repeatedly rejected calls to declare the drought a national disaster although five of the country's nine provinces have been declared disaster areas.

The most hard hit by the drought are small-scale farmers who are at high risk of bankruptcy if they do not have access to government assistance as they do not own land they can use as collateral, Moller told Xinhua.

"The on-going drought is set to wipe out most of the small scale farmers. The government need to chip in to assist these emerging farmers. What we've done in the past 15 years with land reform could come to very little if we don't support them," Moller added.

Five percent of South Africa's livestock breeding herds have died due to the drought, and a hike in red meat prices is expected by the end of this year, said Moller.

The import of certain foods could also see prices increase by up to 20 percent due to inflation rates, Agri SA CEO Omri van Zyl predicted.

"Red meat prices is expected to rise in the latter half of the year, if you look at the physical availability of the meat," he noted.

Not only are farmers feeling the heat of drought, consumers are also likely to be hit hard.

The white maize spot price for last week rose by 80 percent year-on-year, and that of yellow maize by 45 percent, according to Wandile Sihlobo, an economist with GrainSA.

"For now, people have been living in a good way compared to the situation on the raw commodity side. In a month or so, people will start to react," he said in a telephone interview with Xinhua.

The country is expected to import about 7.3 million tons of grain from now until April 2017, Sihlobo disclosed to Xinhua.

The worst drought is envisaged to eat into the country's economic growth, which is predicted at 0.9 percent this year, compared with 1.3 percent last year.

The sluggish economic growth is likely to heighten fears that South Africa's credit rating will be cut to junk status and further unsettle investors concerns over President Jacob Zuma's handling of the economy.

The South African Reserve Bank (SARB) has hiked interest rates to tame the ever rising inflation. On March 17, the bank is expected to announce its second interest rate decision. Enditem