Farming in the Karoo as an investment
Some of the categories in the South African agricultural sector that are proving to be sound investments are natural fibres, particularly wool and mohair, as well as red meat such as lamb, beef, venison and the boer goats that are farmed extensively in the Karoo, says Wayne Rubidge, Pam Golding Properties area manager in the Karoo.
“If you had bought a Karoo farm in the last 15 years and had a good land management policy, you have probably had a rewarding investment as the capital appreciation of a sustainable Karoo farm has generally been excellent,” he says.
And over the same period, if you had bought quality sheep or cattle, certain species of game, or goats for the farm, the current income from produce from these animals could not have been better, he adds. “For example, the wool price is up to 60 percent higher than it was 18 months ago and wool and mohair grown in the Karoo is among the most sought after in the world, with many European buyers competing for the type of wool produced in the Karoo.”
Rubidge says similarly, the demand for the high quality meat that comes from the Karoo will only increase with consumer awareness of the important role Karoo farms play for the consumer. ”Whether it is lamb or venison there are few areas in the world which can produce better quality produce. With increasing pressure on the exploration of the natural resources of the Karoo, it is important that the consumers of Karoo produce support initiatives to preserve the Karoo’s unspoilt wide open spaces, clean air and water for the future well-being of the platteland. Initiatives such as the Great Karoo Conservancy are being supported by many landowners to guarantee the future. In addition, branding initiatives by farmers now include Karoo Lamb as a location specific product - such as champagne is to parts of France and agave is to Mexico,” he says.
He says while owning a home or a getaway investment in the Karoo remains a popular choice for an ever increasing number of investors, owning a farm in the Karoo generally requires a much larger investment, yet remains a good value proposition when compared to many other parts of South Africa.
“The traditional method of valuing Karoo farms being Rands per hectare based on the carrying capacity of the property, still remains an important indicator of the price you are going to pay for a Karoo livestock farm. Increasingly the lifestyle premium attached to many Karoo farms is also important as often buyers are drawn to investing in the Karoo’s agricultural sector due to the extensive nature of farming in this region. The Karoo farming sector remains one of the most important economies of almost all Karoo towns and has proven to be the largest contributor to the sustainability of these economies and the Karoo in general,” says Rubidge.
He says the game farming industry in the Karoo is also going from strength to strength. With its healthy climate and few infectious diseases it is increasingly the preference of many game farmers relocating from other areas for various reasons. Besides the breeding of rare game species the Karoo offers an exceptional hunting experience for both South African and visiting trophy hunters. Trophy and venison hunting are also important sectors in the South African and Karoo economy, with venison hunting being a R5-R6 billion rand industry in South Africa. Rubidge says the icon of the Karoo is the Springbok and today more and more landowners are seeing the benefits of mixed farming by combining livestock, agriculture and game in their business plans.
He says while not all Karoo farming is extensive the Karoo as a region spans four provinces (Western Cape, Eastern Cape, Northern Province and Free State) and incorporates many rivers with large irrigation schemes. “The biggest is the Orange River Irrigation Scheme mostly situated in the Northern Cape, making it one of the country’s top food baskets. Like other irrigation schemes such as the Fish and Sundays River, prices for scheduled irrigation have jumped substantially in the last three years and even doubled in many areas. Ground sells for anything between R70 000 to R120 000 per hectare on the Orange River, with its fertile soil and many sunny days,” says Rubidge.
Currently Pam Golding Karoo is marketing a range of irrigation properties from the Gamka scheme in the Western Cape Karoo - mostly supplying alfalfa (lucerne) to Western Cape horse breeders, to speciality irrigation farms supplying produce like pomegranates, citrus and other edibles to the markets.
Adds Rubidge: “With growing interest in niche farms - which used to be represented by horse breeders - due to the mineral-rich water and soils many new farming activities are taking place in the Karoo from breeding indigenous livestock such as Afrikander sheep to growing berries, olives and nuts. Also of increasing importance and attracting new visitors is the special brand of Karoo safari tourism which is emerging. This is seeing some farmstays enjoying higher occupancies than many well established accommodation businesses in the towns,” he says.