Dairy farms are under constant pressure to expand, or go under.

This is the finding of studies presented this week to Towards Carnegie III at UCT.

According to Pauline Stanford, from UWC’s Institute for Poverty, Land and Agrarian Studies (PLAAS), it costs an estimated R15 – 20 million to start up a commercial dairy farm of 400 cows today. It’s a tough business, she says, and farmers in the Underberg region have to constantly expand their farms to keep their business alive.

“It’s a treadmill effect,” explained Raymond Auerbach, Professor of Soil Science and Plant Production at the Nelson Mandela Metropolitan University. Farms have to get bigger to keep running on the same spot. In other words, farm expansion maintains steady income.

“It is increasingly difficult for small to medium-scale farming to remain economically and environmentally sustainable, and there’s trend towards an agriculture sector dominated by large-scale farms serving the elite of the agro-industry,” said Stanford .

The qualitative study by Stanford, presented in a session on the dynamics of change in commercial agriculture, surveyed 16 commercial dairy farmers of the Underberg region in KwaZulu Natal.

One farmer explained in the survey: “It is much harder for dairy farms to start up now…In 2012, farmers have no co-ops, no free technical support and a minimum start-up herd is 400 cows.”

It is difficult for farmers to start up without large amounts of capital, especially as existing farmers invest heavily in expanding their farms, said Stanford.

New farmers face two options: “Co-operate or compete”.

“Co-ops” such as Midlands Milk form farmer alliances to contest big milk processors who “screw them over,” said Stanford. She suggested that co-ops could provide a support structure for emerging farmers, but admitting to being “sceptical” that structural relations could really change.

To enter the dairy market as a new farmer and compete from the outset means they must adopt the “Ek staan alleen” mentality that some farmers have, said Stanford. This requires capital investment and expansion.

“There are very few single-farm farms in the [Underberg] district now, in fact I haven’t found one yet,” said Stanford.

“You have to get big or get out,” said Auerbach in agreement.

by Jacques de Satgé