The purpose of the levy is to encourage seed companies to introduce new cultivars with advanced technology in the local market. South African soybean producers mainly plant farm saved seed from the previous season. The South African National Seed Organisation (SANSOR) estimates that up to 80% of soybean plantings in the country are done with farm saved seed.
It is common practice worldwide to retain a portion of the harvest of open pollinated crops to plant again in the next season. One of the disadvantages of this practice is that new seed sales are relatively low and thus not profitable for seed companies to invest in developing new and improved cultivars.
The high level of seed retention in South Africa contributes to the stagnation of the soybean industry and makes it increasingly difficult to compete in the world market. It takes up to a decade of research and development and costs several millions of rand to develop one improved cultivar. If seed breeders cannot expect good sales, they will be reluctant to incur these costs.
According to the Bureau for Food and Agricultural Policy (BFAP) South African soybean producers compete with the USA, Brazil and Argentina, whose yields have increased by up to 1,5% per year over the last decade. South African soybean yield over the same period improved by around 0,4% per year. One of the most important reasons for the slower improvement is a shortage of new cultivars and bio-technology.
The average yield in the USA for example is around 3,5t/ha, while in SA it is less than 2t/ha (Figure 1). The local average soybean yield over the last 20 years is 40% lower than the average yield of the three main producers worldwide.
The demand for protein is increasing worldwide and soya is a massive component of animal feed, but also for human consumption.
Soybean plantings in SA have increased sharply over the last 50 years, from less than 10 000 ha to 787 000 ha in 2017/2018 (Figure 2). Recent investments in crushing capacity and the promotion of soybeans’ contribution in crop rotation systems have convinced many producers to include it in their summer grain production plans.
In 2017 soybeans overtook sunflower as the second largest summer grain in terms of area planted. BFAP estimates that SA will plant up to one million hectares of soybeans per season in the next five to ten years.
The technology levy that kicks in on 1 March is collected and administered by the SA Cultivar and Technology Agency (SACTA). It is payable on the first sale of soybeans produced in South Africa, regardless of the grade.
SACTA is a non-profit company that collects the levy and distributes it among seed companies, based on their market share. This is to guarantee compensation for their investment in developing advanced seed technology.
The levy is effective from 1 March 2019 to 29 February 2020. Thereafter the levy will increase to R80 per tonne until 28 February 2021.
For more information contact Gert Heyns, SACTA CEO, on 082 388 0211 or visit
www.sactalevy.co.za