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Oil incentives:

Thinking differently about sunflowers

By Andries Wessels, portfolio manager: field crop seeds, Syngenta

he late Steve Jobs once stated that the crop has value in marginal sunflower that is fed into a crushing facility,
that “Simplicity is the ultimate areas and is especially well-suited to no additional expenses have to be incurred
sophistication”. In an oil areas where late plantings are the norm. to extract the oil, which benefits output.
industry that does not reward Many farmers can testify to the value of
T oil content, the simplistic value harvesting sunflower early, as it relieves Local drive to boost oil content
of sunflowers’ oil content is overlooked. pressure on cash flow and workloads can Local efforts to drive the value capture of
The value chain does not incentivise be spread during the harvesting period. oil incentives have been actioned by the
farmers for oil yield, which is perhaps the Oilseeds Advisory Committee (OAC). The
biggest disadvantage to the development The value of incentives project entails the OAC’s commissioning
of a crop in an industry that seems to be When comparing the local oil industry of the Bureau for Food and Agricultural
more focused on yield development. to that of our international peers, our Policy to study the viability of oil incentives
value chain lacks a reward system for oil in the industry, as well as the factors
Factors limiting yield content. In the United States, European that influence oil yield at farm level.
Research by stalwarts such as Dr André Union and Argentinean markets, farmers The Agricultural Research Council’s
Nel suggests unequivocally that gains are rewarded for oil content on top of annual sunflower trial report also
in sunflower yield lags far behind their commodity prices. This begs the gives some interesting insights into
that of maize when measured over question: As oil is such a valuable plant- the difference between hybrids when
the same period. A few limitations based commodity, why is the same comparing oil. From these reports it
relating to sunflower contribute to route not followed in South Africa? is evident that significant value can
this harsh reality. Maize has a less Several arguments could be tabled, easily be unlocked by simply selecting
complex genome when compared to ranging from a price sensitive consumer hybrids based on their oil yields,
sunflower and could be classified as a base, crushing capacity that is fairly and not getting stuck in the groove
much more simplistic crop to breed. concentrated in ownership, and genetics of grain yield as primary selection
Add to this the fact that genetically that do not lend themselves to oil criteria for hybrid selection.
modified breeding technology is not content as they were the casualties The 2019 report shows that
available for sunflowers, and it becomes of a system that does not reward oil SY 3970 CL has a whopping 51% oil
obvious that yield will be limited. content. Whatever the argument, the concentration average across sites.
Sunflowers are also not grown under essence is that everyone involved in the This underlines the value of hybrid
irrigation and are often relegated to value chain – from farmers to crushers selection for oil concentration in a bid to
marginal soils for commercial production. to consumers – is at a disadvantage easily unlock the largest gains in value
Combining these factors really does when there are no incentives for oil. capturing in the oil industry, as opposed
not bode well for sunflower farmers Perhaps the Argentinean model gives to improvements in grain yields.
either, as the cost squeeze of rising input some much needed clarity. It allows The reset button on the value of
costs require them to have access to for farmers to be rewarded a 2% price oil concentration needs to be pressed
improved hybrids with superior yields premium for every one percentage for the whole industry to benefit. If
that puts them ahead of the squeeze. point above 40% oil content on an ‘as is’ farmers benefit from improved oil
The reality is that the gain in yield for basis. For example, a farmer delivering yield hybrids that are already available,
sunflower is only 1% per annum; a dismal sunflower with a 44% oil content will the industry can be transformed,
number compared to maize that has receive a price premium of 8%. and the simplicity of an oil trait will
over 4% gain in yield year-on-year. This oil content increase also has initiate true market sophistication.
Sunflower does, however, have some significant downstream advantages for
industry advantages when compared to crushers who simply procure based on For enquiries, contact
maize. When looking at Crop Estimates volume needs and who do not benefit Andries Wessels on 011 541 4079
Committee numbers, there is some from higher grain yields directly. By simply or andries.wessels@syngenta.com,
stability in sunflower plantings, indicating increasing the oil content in a ton of or visit www.syngenta.co.za.

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