Business Maverick

FEAST OR FAMINE

Farming association warns of looming SA catastrophe as energy crisis threatens food security

Farming association warns of looming SA catastrophe as energy crisis threatens food security
(Photo: Guillem Sartorio / Bloomberg via Getty Images)

Fed up with empty promises, South Africa’s farmers are warning that food security will be jeopardised if Eskom’s crisis is not resolved immediately and effectively.

The energy crisis is bringing farming in South Africa to its knees.

In a press release issued on Tuesday ahead of the State of the Nation Address, the federation of agricultural associations, Agri SA described the situation as “crippling” and a “catastrophe”, warning that without urgent action, South Africans can expect crop failure, higher food prices and shortages of some food products in the near future.

Last week, during a meeting on 2 February 2023 with the National Disaster Management Advisory Forum — presented by Eskom, the Department of Public Works and the National Energy Crisis Committee on whether the electricity crisis should be declared a national state of disaster — Agri SA said extended periods of rolling blackouts are spilling over into food production, processing and other elements that contribute to the availability of affordable and healthy food.

Stressing the critical importance of food security and why it should be protected, Agri SA warned that hunger, malnutrition and famine pose significant political, economic, social, environmental, safety and biosecurity risks for the country.

Eskom though proposed medium- to long-term interventions, but was short on providing any immediate solutions or suggestions to support a national state of disaster.

On 3 February, Agri SA followed up with an e-mail to the Disaster Management Forum, saying the agriculture sector lost an estimated R23-billion in just nine months last year.

“To prevent further damage to the agriculture sector, immediate access to electricity is needed over the next few weeks. Irrigation is a crucial process in agriculture as it enables farmers to grow crops, especially in inadequate rainfall areas.

Without irrigation, farmers would be dependent on rainfall to water their crops, making them vulnerable to load shedding and causing damage to irrigation systems when the electricity supply is unreliable. This already has a loss of income for farmers due to crop failure and a reduction in agricultural productivity.”

Research conducted by Nova Economics on behalf of Eskom shows that an estimated 1% reduction in electricity sales due to rolling blackouts corresponds to a 0.4% decrease in SA’s GDP growth.

The cost of rolling blackouts per day to the SA economy: 

  • Stage 1: R235.5-million
  • Stage 2: R471.3-million
  • Stage 3: R706.7-million
  • Stage 4: R942.4-million

The proposed state of disaster, mooted by the ANC’s national executive committee to address the energy crisis, will not avert this threat — what is required is targeted relief, said the organisation.

Agri SA has now said the only way to guarantee food security in South Africa would be for President Cyril Ramaphosa to announce immediate action by the government and Eskom to relieve the crippling burden of rolling blackouts on farmers.

Rolling blackouts have more than doubled between January and September 2022, compared with the same period the previous year.

“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.”

Implications 

Agri SA’s letter to the National Disaster Management Forum outlines extensive implications of the blackouts for grains, livestock, poultry, fruit, vegetables, sugar, edible oils and other foods, which are central to the country’s ability to feed its people.

Acknowledging that the power crisis cannot be fixed overnight, the organisation proposes critical short-term measures to lessen the impact on food security, including:

  1. Declaring the agricultural sector and associated value chain an essential service;
  2. Partially exempting the sector from blackouts beyond Stage 4;
  3. Allowing for higher rebates on diesel and petrol used for electricity generation;
  4. Amending the current tariff structure to reduce the cost of electricity during peak times;
  5. Trading blackout schedules using a local feasibility study; and
  6. Rapidly expanding load curtailment to all agricultural areas that qualify in terms of the user mix.

Load curtailment has been successfully piloted in the Berg River (north of Cape Town), where farmers have agreed to lower their consumption in exchange for exemption from rolling blackouts. Load curtailment is only possible on electrical lines with a user mix of 80% agricultural and 20% residential.

If these short-term measures are not implemented, the organisation says catastrophe looms for the country as the blackouts were already disrupting farming operations by damaging equipment, increasing the cost of food production as farmers are forced to irrigate at peak prices, and raising labour costs due to irregular working hours based on blackout schedules.

Meat producers are also unable to pump water for their livestock or to slaughter and process meat.

Agro-processing and retail are  under pressure as packing and cooling operations fail, which is already having a devastating effect on affordability and availability.

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The government had to play its part, given the magnitude of the threat to the nation if food security failed, Agri SA said.

Christo van der Rheede, Agri SA’s CEO, told Business Maverick: “There is a problem of alignment between all the roleplayers in terms of how to solve the problems at Eskom.

“My argument in the document, and also in the letter that I’ve sent to the National Disaster Management Forum, is that you can wish for a state of disaster, but first and foremost, you need to strengthen that alignment.

“The sooner we get rid of this bureaucratic quagmire and deal with the issues in a way that we put all these criminals in jail, ensure that there’s no sabotage at Eskom’s plants any more, and force the municipalities — including Soweto — to pay for the R60-billion outstanding electricity, [the better].”

Van der Rheede called for a “draconian approach” by Eskom, under good leadership, because “it’s a business that should be based on good business and economic principles”.

“Do you need a state of disaster for the police to do their work? For the municipality to maintain their infrastructure and to make sure that people pay for the services that are delivered?” BM/DM

Gallery

Comments - Please in order to comment.

  • Ian Callender-Easby says:

    Fix Eskom? Really? While it’s still a public utility? Get real.

  • Colleen Dardagan says:

    Anyone listening?

  • sarahanne.kope says:

    What is it, do you suppose, in the mental makeup of South Africa’s Municipal Managers that allows them to imagine that they are exempt from paying for services rendered? This busines in Port Alfred of signing a contract with a company to supply potable desalinated water, after having installed the equipment and carrying out the terms of the contract, leaves me baffled. I’m sure that if the Municipal Manager’s salary wasn’t paid he would be most aggrieved.

  • Steve Rogers says:

    What the ANC has to eventually realise is that it’s not their job to run businesses (into the ground). It’s their job to run an efficient state (which they’re also not able to do).
    But this runs against the raison d’être of the organisation because it confirms the obvious: Communism is not effective. The quicker they realise this and privatise most, if not all, of the SOEs, the better.
    I understand it’s naive to expect this, but there is no other solution, no matter how unpalatable this one may be.

  • Neil Parker says:

    I completely fail to see how declaring a “state of disaster” will solve anything. According to the ANC it would allow them to implement “extraordinary interventions beyond the regulatory environment”. This is complete verbiage with not even the faintest indication of any ideas on real solutions to the energy crisis. The ANC first needs to admit it is primarily responsible for the “national disaster” and then eat some humble pie by re-instating De Ruyter and sacking Gwede Mantashe for his ridiculous allegations against the former.

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