Grain SA is calling for urgent government action to make crop insurance more affordable as severe rainfall shortages threaten wheat production in South Africa’s Swartland region.

Some producers estimate that 25% to 30% of their crop potential may already have been lost, in addition to a decline in planted area. Grain SA said follow-up rainfall is urgently needed, while warning that increasingly severe climate and production risks are becoming difficult for producers to absorb.

The Swartland entered the 2026 production season with favorable rainfall. Regional data supplied by Overberg Agri showed approximately 176 mm of rain in April and May, compared with a 10-year average of about 66 mm.

Farmers responded by planting crops, applying fertilizer and committing significant production expenditures despite ongoing economic pressures. Conditions then deteriorated sharply. Only about 43 mm of rain was recorded from June through August, compared with a 10-year average of about 202 mm, nearly 79% below average.

For dryland producers, the timing and distribution of rainfall can be as important as total rainfall. By the time poor conditions develop, much of the cost of producing a crop has already been incurred, including seed, fertilizer, fuel, labor, financing and crop protection.

Producers also have less financial room to absorb losses. Farm-level figures supplied by a Swartland producer indicate that direct input costs increased approximately 65% between 2016 and 2026, while the estimated farm-gate wheat price increased about 36%. The figures do not fully account for increases in machinery replacement and maintenance, labor, financing and the cost of capital.

Farmers have sought to offset higher costs and production risks through greater efficiency, conservation agriculture, improved soil health and water-use efficiency, improved genetics and higher yields.

Through SACTA, producers contributed approximately R986 million toward breeding and technology, resulting in the release of 231 new varieties, including 66 wheat varieties. Grain SA said those improvements have limits, particularly when rainfall is insufficient.

Grain SA said affordable and meaningful crop insurance should become a national agricultural priority. While agricultural insurance products are available in South Africa, multi-peril and yield-based coverage remains unaffordable or inaccessible for many dryland producers operating on tight margins.

Weather-related index insurance has been enabled in South Africa, and improvements in weather stations, satellite information and soil-moisture monitoring have created opportunities for more sophisticated risk-management products. Grain SA said greater public-private support is needed to make those mechanisms affordable and available at scale.

The organization said a coordinated approach should include affordable index-based and multi-peril crop insurance for dryland producers, a public-private mechanism to support insurance premiums, greater use of rainfall, satellite, soil-moisture and weather-station data, a responsive wheat tariff and regulatory environment, continued investment in breeding and agronomic research, and market mechanisms that provide effective price discovery while recognizing locality and quality.

Grain SA also warned that the issue extends beyond the 2026 Swartland crop. South Africa's wheat planted area is already at its lowest level in 97 years, increasing concerns about the country's long-term production capacity.

Repeated losses can cause producers to shift land and capital away from wheat and toward livestock or other enterprises with a more sustainable balance of risk and return. Once producers, machinery, infrastructure and expertise leave wheat production, restoring that capacity can be difficult and costly.

The wheat sector's economic importance also extends beyond farms. Research by BFAP estimates that South Africa's wheat value chain contributes approximately R70 billion to R75 billion to the economy and supports about 90,000 jobs. Wheat-based products are consumed by approximately 96% of South African households.

Grain SA said government, producers, insurers and the agricultural value chain need to develop a risk-sharing partnership that protects viable producers from exceptional climate risks without shielding farmers from normal business risks or guaranteeing profits.

Source: Grain SA, "Swartland Wheat Producers in Trouble: Farmers Cannot Carry Climate Risk Alone"