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SURGE IN INTEREST IN COMMERCIAL LIVESTOCK AND IRRIGATION FARMS IN KAROO AND KALAHARI

Interest in commercial livestock and irrigation farms in the central Cape provinces – predominantly the Karoo and Kalahari regions – is now coming to the fore, says Wayne Rubidge, manager for Pam Golding Properties in these regions. Irrigation farms are those which source water from official irrigation schemes and which have registered water rights attached to their property.
 
"In winter sheep and cattle farms make way for the surge in interest in game farms in the Cape provinces' vast interior. Now with the popular game and hunting season coming to an end the focus now shifts to the other category of commercial farms, namely livestock and irrigation," he says.
 
The extensive nature of Karoo and Kalahari farms, low population density of these areas, coupled with limited crime and political involvement in farms, low capital inputs and a highly desirable lifestyle, places them high on buyers' priority lists. Karoo commercial farms – including irrigation farms - are also proving to be sound investments, particularly given a growing awareness of the pressing issue of food security and utilisation of water.
 
With its huge spaces and numerous and diverse locations, this region offers a wide variety of commercial sheep and cattle farms, which generally range in size from 3000-20 000 hectares and are mainly merino or dorper sheep farms. Merino sheep are bred for their wool and for meat, while dorper sheep – a South African breed developed by crossing Dorset Horn and the Blackhead Persian – is bred for meat.
 
Says Rubidge: "With the weaker rand last season, irrigation farms which farm produce for export have performed well. This has been particularly true of the export table grape farms on the Orange River as well as citrus farms in areas such as Patensie and Kirkwood in the Eastern Cape.  While buyers are both local and international – from as far afield as India - few of these export farms are on the market due to the high returns they are currently yielding.
 
"It's interesting to note that the high level of skills of South African farmers allows them to interchange what they produce, for example a PGP client who recently sold a large sugar cane farm in KwaZulu-Natal is now looking to run a large sheep farm. Beef, dairy or cattle farmers are easily adaptable to run sheep farms and vice versa. Many livestock farms include an irrigation component such as pastures, or Lucerne (alfalfa) as a fodder supplement during the dry or winter months."
 
He says those seeking to acquire livestock farms tend to be farmers relocating from the Northern provinces and KwaZulu-Natal as well as business executives entering the market from an investment perspective – who may either recruit managers to run their operations or offer the seller a retainer to stay on for a couple of years. "The main reason for farmers relocating is that having experienced a land claim or having sold to the state they do not wish to go through this process again, preferring to put down roots where they will not be under further pressure. Many of these purchasers have sold for up to R10 000 per hectare in the higher rainfall Limpopo province, so a Karoo farm at R3000 per hectare is an appealing alternative.
 
"Such farmers have agriculture or animal husbandry skills which are sought after in many of South Africa's neighbouring countries to the north.  As a result many are being invited to set up shop in other African countries which are providing great incentives to attract these commercial farmers, who are being lost to our country together with their food producing skills."
 
For those interested in acquiring a sheep farm, the western interior of the Karoo with its lower rainfall generally has the larger sheep farms that can carry on average around one sheep per five hectares, with prices around R650-R1200 per hectare. On offer in this region near Carnarvon in the Northern Cape is a 4821ha sheep farm with 500 dorper sheep, 17 camps, 12 windmills, a neat and sturdy farmhouse with outbuildings and an incredible 350 rock art engravings of fine quality and a camp site to host visitors. Ideal for a conservation-minded investor, this is priced at R5 million.
 
As one moves eastwards the rainfall increases and farms can carry more sheep per hectare. In the central area one needs three hectares per sheep and prices range from R1500 to R2500 per hectare. On the market in the Aberdeen district is a 6800ha farm for R18.2 million which has been in the family for four generations, while in Richmond a 9000ha sheep farm capable of carrying 2000 dorpers and with excellent infrastructure is marketed at R21.8 million. This central area around Graaff-Reinet, Middelburg and Colesburg is fast becoming a prime game area due to its healthy climate and quality grazing, with some properties having the option to be sold as a livestock or game farm. The eastern region has the highest rainfall and as one enters the grassy Karoo and leaves the bush vegetation behind cattle farms are in evidence, generally smaller than sheep farms and able to carry up to four hectares per Large Stock Unit (LSU).
 
Adds Rubidge: "Irrigation farms, either from the Orange or Fish River irrigation schemes, are very popular with irrigation ground selling up to R60 000 per hectare depending on what crop is available and the irrigation infrastructure. For example, export fruit grapes of a popular cultivar and situated near the Upington or Port Elizabeth export markets can command a premium. Citrus is currently doing very well and these farms are hard to come by, while maize and Lucerne farms are also in demand. On offer near Cookhouse, which is near Somerset East, is a 22ha irrigation farm with game priced at R5.25 million. Near Prieska in the Northern Cape a prestigious property comprising a massive 270 hectares of scheduled irrigation land is on the market priced at R36 million. Producing 15 tons of maize and eight tons of grain per hectare, this property is sold as a going concern with implements and equipment included. A large commercial establishment such as this provides a great return on investment, particularly in view of the growing trend towards commercial farmers moving into this area – with its significant yet untapped potential for food production."
 
Issued by Gaye de Villiers


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