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April 2016
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New realities...
the climate is indeed changing
R
etired CEO of Tiger Brands, Mr Hamish McBain, is not a
producer but an astute businessman who has gathered
a lifetime of experience in the trading, shipping and pro-
cessing of agricultural products in the local and interna-
tional arena.
In considering the road ahead McBain observed that the climate is
indeed changing – and by that he was not only meaning the weather.
Talking to delegates at the 2016 Grain SA Congress, McBain looked
at a number of scenarios on the global and South African stage.
His acute observations provoked one into thinking more strategi-
cally about the road ahead. This is particularly important in the light
of the window of opportunity the agricultural sector has to make a
positive contribution – ‘the door is standing slightly ajar’ for sector
leaders to give input.
Because of the drought, government is concerned about food secu-
rity, among other issues. Time is ripe for organised agriculture to put
facts on the table together with offers to help resolve burning issues
burdening the sector.
The reality: The so-called free market is
not really free at all
McBain maintains South Africa has been a naive player as far as
agricultural marketing is concerned. Both the United States (US)
and European Union (EU) have deliberately implemented complex
agricultural subsidies and non-tariff barriers and strive to defend
their markets.
The sugar trading environment is highly regulated; Brazil impos-
es export levies on soybeans and Canada and Australia influence
wheat exports. The free market is not really free, but rather a func-
tion of political aims and economics. We all need to be more aware
of the global political and economic environment.
Strategies
Six thought leaders on turnaround management, competitive
advantage and scenario planning, Stuart Slatter, Akia Morita,
Michael Porter, Clem Sunter, Ronald Coase and Niall Ferguson,
were ‘consulted’.
Common themes towards achieving organisational success emerged:
Focus on productivity: Drive down costs, do things better, con-
sider international benchmarks.
Innovate to reduce costs using proven technology and other
peoples’ ideas and research.
Tackle transaction costs by looking beyond the business’
boundaries at raw materials, transport, storage and marketing.
Pay attention to the downside: Problems, discontinuities, new
entrants, government action, chance events, substitute products
and infrastructure changes.
Recognise that strategy is important and that institutions and
networks really matter.
Scenarios
Why do we need to become more aware of the global environment
and the probability of developments when ‘forecasting the future is
an exercise in futility?’
McBain says that by looking at scenarios, you consider alternatives
and prioritise things needing your attention.
Global scenarios – ‘They will affect you
whether you like it or not’
When one looks carefully at events, protests and uprisings around
the world, the picture presented is one of hard times. The bottom
line: Hard times are here to stay.
South African scenarios
In 2013 Clem Sunter listed a number of red flags for South Africa:
A South African ‘Arab spring’, nationalisation, bungled national
health insurance scheme implementation, land grabs and gagging
the media. It is interesting to note that all of these flags are flying
strongly in 2016. South Africa is in trouble.
What do long-time supporters of the ANC say? Anti-apartheid
activist, RW Johnson in
How long will South Africa survive?
, looks
at the massive corruption in the country and journalist and ANC
FEEDBACK
Congress
Special
JENNY MATHEWS,
SA Graan/Grain
contributor
Delegates’ responses
in the Q&A session
Threats
We need to work towards a common goal.
Mistrust between role-players.
Uncertainty.
Unemployment.
Identify what will aid growth in
the sector
Secure insurance could assist positive growth.
We need to be more competitive on the global stage.
We need more enabling policy to empower producers
to grow more profitably.
We producers must unite and work as a family
– the government must see us as one body.
– Hamish McBain
Hamish McBain