Government failure to deal with load shedding could lead to higher food prices and shortages: Agri SA

Should the South Africa government continue to fail to solve the problem of the rolling blackouts implemented by the Eskom, South Africans can expect crop failure, higher food prices and shortages of certain food products in the near future, says Agri SA

The agricultural organisation’s executive director, Christo van der Rheede, said on Tuesday that a declaration of a state of disaster alone would not avert this threat; what was required was a targeted relief.

He said load shedding had more than doubled between January and September last year compared to the same period in 2021. “As a result of this catastrophe, the agricultural sector lost more than R23 billion during the nine-month period under review. This loss could be exceeded in 2023, threatening the sustainability of the sector and the 800 000 jobs it provides.”

Given the magnitude of the threat, Agri SA said it had submitted a letter to the National Disaster Management Centre which details the far-reaching implications of load shedding for grains, livestock, poultry, fruit, vegetables, sugar, edible oils and others. The organisation said these industries were central to the ability of South Africa to feed its people.

Van der Rheede said that as President Cyril Ramaphosa delivered his State of the Nation Address (Sona) this week, the only way to guarantee food security in South Africa would be an announcement of immediate action by the government and Eskom to relieve the crippling burden of load shedding on farmers.

“While load shedding cannot be fixed overnight, there are critical short-term measures that can be put in place to mitigate its impact on food security. Agri SA therefore calls on President Ramaphosa to ensure the following measures are put in place immediately: declare the agricultural sector and associated value chain an essential service, partially exempt the agricultural sector from load shedding, allow for higher rebates on diesel and petrol used for electricity generation, amend the current tariff structure to reduce the cost of electricity during peak times, trade load-shedding schedules using a local feasibility study (a tiered approach can be taken using red, orange, and green to identify critical areas) and rapidly expand load curtailment to all agricultural areas which qualify in terms of the user mix.”

Agri SA said that unless these measures were implemented, a catastrophe loomed for the country because of load shedding. It said farming operations would be disrupted as equipment was damaged because of power failures, the cost of food production would increase as farmers were forced to irrigate at peak prices, and labour costs would soar due to irregular work hours based on load-shedding schedules. “At the same time, meat producers will be unable to pump water for their cattle or to slaughter and process their livestock and poultry. Agro-processing and retail will also suffer as packing and cooling operations fail. The result of all this for food affordability and availability will be devastating.”

Agri SA said that it and its members, as well as value chain role players, were already working with stakeholders to ensure the agriculture industry’s sustainability so it could continue to feed South Africa. “But the government must play its part, recognising the magnitude of the threat to the nation if food security fails. President Ramaphosa has the opportunity to lead the effort to find solutions; he must take it,” Van der Rheede said.

Last month, Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said that as the country started the new year, there was probably no issue more urgent than the worsening energy crisis for local agriculture and agribusinesses. He said that farmers who relied on irrigation had all expressed concerns that persistent load shedding negatively affected production. “In crucial field crops, roughly 20% of maize, 15% of soybean, 34% of sugar cane and nearly half of the wheat production are produced under irrigation. Fruits and vegetables also heavily rely on irrigation and thus face similar challenges. In red meat, poultry, piggery, wool, and dairy production, there are also concerns that load shedding beyond stage 2 makes operations and planning challenging, as these industries all require continuous power for their usual activities. Similarly, agribusinesses face similar challenges in various downstream processing activities, such as milling, bakeries, abattoirs, wine processing, packaging, and animal vaccine production. Exporting agribusinesses, especially those with products susceptible to delays, such as fruits, red meat, and wine, are also worried about the port activities, which fortunately haven't been primarily affected.”

There were also food security concerns as the effect of load shedding would probably show in the volumes of products to be harvested or produced later in the coming months because of the time lag in agricultural production stages. The other emerging concern was the impact on jobs if businesses were severely affected. There was also a real danger that some farmers could lose their crops, which would impact the farms' financial future and probably negatively impact agricultural financiers.

At the time, Agbiz acknowledged that total exemption of the sector from load shedding would be almost impossible as many food processing companies and farms were technically linked to other localities. “With Eskom's challenges likely to be with us for some time, reducing reliance on Eskom will probably be a strategic business survival consideration for many businesses, although costly. Investing in alternative power sources will need to be prioritised where financial resources permit. This alternative generation may not necessarily take a business ”off the grid“ but ensure the continuity of crucial business activities during the cycle of load shedding,” it said.

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