AgriSA: Power price hike poses food security threat
AgriSA executive director Christo van der Rheede says food is produced on the back of R200 billion debt owed by the country’s farmers.
Van der Rheede was reacting to the decision by the national energy regulator Nersa on Thursday to grant a 19% tariff hike to Eskom for the 2023/2024 financial year.
The new tariff is set to kick in from April.
Van der Rheede says input costs, from packaging to fertilizers, have hit the agricultural sector hard.
"The agricultural sector has done quite well in the past couple of years due to the good climate and rains, also export markets opening up but of late the agricultural sector has to contempt with raising input costs.
"We have seen a massive hike in diesel from R10 to in 2015 to almost R26 last year, packaging costs have gone up by more than a 100% same with the ship[ping costs, a container that costs you R17 000 in 2017 will set you back to R130 000 to R150 000 in addition to your fertilizer prices have gone up and we have seen and expect an increase in the repo rate.”
Van der Rheede says the 19% hike will only drive farmers’ finances deeper into the red.
"The total debt for farmers is R200 billion, we produce food on the back of debt so if you add this additional 18.65% and other input cost increases. Then my fear is farmers will later on decide that this is no longer a profitable business and if the farmers climb out then the country will face a serious challenge in terms of food security. It is not land that produces food but it is expertise's and we need to protect nature and grow those expertise.
"It is important that the government declares the agriculture sector as an essential service.”
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