As the grandchild of peasants, growing up in the dry northern parts of the Eastern Cape, sheep have been part of my life for as long as I can remember.
There isn’t much water in those parts, so the rearing of Merino and other sheep remains a critical element of not just social prestige but protection against household economic insecurity.
It is not unheard of for professionals to say that when time came for them to go to school, sheep were sold to get cash to pay the fees; or that when one graduated, a sheep was slaughtered in recognition of the achievement. For many of the people in this area, including migrant workers, teachers and other civil servants, investments in sheep rearing has also provided periodic, though at times unpredictable, incomes when wool is sheared and sold in markets near and further afield.
Wool was a dominant feature of the 19th-century economy of the Cape Colony, accounting for more than three-quarters of total exports by the 1860s. After the discovery of diamonds and gold further north, the industry receded in public focus but remained the main “transmission belt” into the hinterland, a defence against the vagaries of international product markets.
The late Prof Francis Wilson observed that from 1910-1936 wool export prices saw annual variations of no less than 28%. It remains primarily an export sector, challenged not just by price variations but also by synthetic substitutes, stock theft and — in the case of many stock farmers in communal areas — questions of herd sizes and wool volumes. Farmers are often at the mercy of informal “agents”, who put them under pressure to accept prices that are lower than the prevailing prices in formal markets.
More than three-quarters of wool produced locally is exported in raw “greasy” form. While England and the US accounted for about a third of SA’s wool exports at the start of World War 2, China is now the main receiving market.
There have been interesting developments that may serve to broaden the markets available to the nearly 40,000 communal farmers in this sector. One has been the entry of Chinese investment that has increased the number of buyers during the shearing season. Tianyu and Lazy8 wool buyers and exporters in the Komani Industrial Park have brought the Chinese value chains closer to source and introduced a competitor to the established buyer co-operatives. Whether this has improved prices for small farmers is unclear.
Opportunities
More niche and high-value opportunities have arisen from animal fibre and other processing opportunities locally. The partnership announced a few weeks ago by women-owned textile group IVILI and a private equity player, Alitheia IDF, seeks to increase local wool and cashmere processing at the old Ibika industrial area in Gcuwa (Butterworth) and in Epping, the former Western Cape textile heartland.
This is the kind of investment that could provide new market opportunities for communal farmers. Benefiting from technology imported from Spain, IVILI hopes it will manufacture garments at the quality and scale economies that might attract the attention of local retail buyers and design houses.
Further opportunities exist for the creation of new sheep-related products such as in-vogue traditional wear like izikhaka, which are made from artisanally processed sheep skins. In some parts of the Eastern Cape this often goes to waste after household slaughter for food and social ritual purposes.
One hopes that these market opportunities and the backward linkages they create to black farmers in the communal areas will lead to producer and government-enabled investments in sorting and packaging (alongside veterinary and other endeavours), to access greater value for the wool produced in these areas.
This, alongside the seasonal demand for sheep for social ritual purposes, may provide opportunities to also access distribution and marketing opportunities domestically and abroad, and improve enterprise and household-level economic security for these producers.
• Cawe is chief commissioner at the International Trade Administration Commission. He writes in his personal capacity.
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