The plummeting prices of agricultural products have left South African growers facing losses of more than 1,460 Rand (2) per hectare if they plough on with next year's crop, the country's leading farmers' organisation has said.

Neels Ferreira, chairman of Grain South Africa, said that turning a profit on a next summer's crops "seems to be an impossible task" given the impact on farmers of soft markets and high costs of machinery and fertilizer.

The squeeze could prompt many farmers to cut back on crop planting, leaving the country vulnerable to shortages of home-grown crops next year.

"In a normal year, climate wise, this [reduction in plantings] should not result in a food security crisis," Mr Ferreira said.

"However, should weather conditions fall below normal, it could have a negative impact on the availability of grain in the coming season."

Costs soar

Grain SA estimated an 80% rise in production costs of next summer's crops - twice the rise it forecast six months ago - inflated by a doubling in fertilizer prices, 65% rise in chemicals bills and 50% increase in the cost of diesel.

Meanwhile the price of corn on Johannesburg's Safex exchange had dropped below R1,925 (3.5) a tonne for July 2009 delivery.

Soy for delivery in May had lost R700 a tonne since July 2008, with sunflower dropping by R1,200, or 17%.

Food protests

At these prices, corn farmers were set to lose R110 a tonne on corn, assuming a yield of 4 tonnes per hectare.

On soy, farmers would lose R369 a tonne and on sunflower seed R975 a tonne, both assuming harvests of 1.5 tonnes per hectare.

"Price expectations are such that it will be extremely difficult to recoup production costs, even if above average yields are achieved," Mr Ferreira said.

South Africa has, like many developing countries, witnessed protests this year over the high price of food led bodies including the Congress of South African Trade Unions, which has held talks with Grain SA.

Grain SA has urged the South African government to relieve farmers from some fuels duties and to fund more agricultural research. A drought in 2007 cut South Africa's corn exports to their lowest in a decade.