Johannesburg - South African agribusinesses raised profitability by 44 percent in 2009, compared with the previous year, ending the year on a high note.
But a benchmark survey by PricewaterhouseCoopers (PwC) found the issue over land reform continued to plague the sector.
Farmers in the PwC survey said failed projects - as a result of a lack in funds, poor farming practices and the instability in weather patterns - were the key reasons for the unsuccessful land reform policy.
Business Report quoted Johan Rossouw, an economist at Vunani Securities, as saying many farmers had made land available to emerging farmers in an effort to hasten land reform, but a lack of skills continued to puncture these efforts.
The PwC survey found that failed projects led to a great percentage of formerly productive land now contributing little or nothing to agricultural production.
According to Kobie Bekker, PwC's national leader for agribusiness, the 44 percent growth in profitability for the 18 months to September last year was attributable to the fact that agriculture met a basic human need, which meant the impact of the international financial crisis was not as negative as on other businesses, such as luxury goods and the financial services sector.
He said: "But the variability in the prices of grain and other agricultural products, combined with the abnormal increases in input costs has resulted in many producers finding themselves in a difficult situation."
Bekker said that the 16 survey participants, who are geographically spread out across the country, had indicated their concern about the producer's income not keeping up with the rising production costs.
According to the survey, the agricultural sector faces several risks, including crime and a lack of financial support.
