CHRISTO VAN DER RHEEDE: Food security is inextricable from SA’s energy crisis

In his state of the nation address earlier this month President Cyril Ramaphosa recognised that the country is in severe crisis. There is no ignoring the impact of load-shedding, rising crime and declining infrastructure are having on the economy and society. The agricultural sector has been particularly hard hit, which if undealt with will have serious implications in the short, medium, and long term.

While it was encouraging to hear the president announce some steps to address the energy situation, the true value of the planned interventions will only be seen in the budget. Urgent and direct relief to the agricultural sector needs to be addressed in the budget if our government is to protect the country’s food security.

Load-shedding is disrupting not only irrigation, but also slaughter operations, processing, packing and cold storage of food products. In their efforts to mitigate the impact farmers are expending significant resources on additional fuel as well as rising labour costs due to wasted production time and irregular working hours planned around blackouts.

This is an unbearable burden on a sector with high levels of debt, worsened  by rising interest rates and inflationary pressure on input costs such as fertiliser and agro-chemicals. The effects are visible on the shelves of our local stores, but an even bigger impact looms: the imminent risk to the certainty of food supply. Shelves will be bare unless struggling farmers are afforded relief.

Essential service

Before Ramaphosa’s address, Agri SA called for the president to declare the agricultural sector an essential service and partially exempt it from load-shedding, specifically above stage 4. That would allow for sufficient continuous hours of electricity to power irrigation and other systems. While the president noted that the state of disaster would enable the government to exempt critical infrastructure from power cuts, he said nothing about extending that exemption to the sector, even after acknowledging its particular vulnerability to the energy crisis. That was a wasted opportunity to give concrete relief to a vital sector.

Nor was there any clarity on the role of the yet-to-be-appointed electricity minister. With the departments of mineral resources & energy and public enterprises remaining involved in the crisis, this new ministry risks miring the urgency envisioned by the state of disaster in a web of bureaucracy.

And it will be just as important to watch which policy levers finance minister Enoch Godongwana pulls along with the fiscal ones. Given the cost burden placed on farmers by the energy crisis, it would be unconscionable to see increases in excises taxes and the Health Promotion Levy, for example. Any such moves risk decimating the sugar, tobacco, beer and wine industries long before the energy interventions can provide relief to our wine-grape farmers, canegrowers, tobacco farmers and other affected producers.

Instead of excise taxes the minister must urgently announce measures to ease the financial burden of load-shedding on the agricultural sector. These could and should include special incentives for embedded generation in the sector, and further rebates for fuel costs and other energy alternatives. Any measures that would encourage municipalities to implement energy buyback schemes should also be explored urgently.

Cliff’s edge

We need to get to grips with SA being on the edge of a precipice. If, over and above load-shedding and declining service delivery, we start to see steeply increasing food prices, food shortages and the labour-intensive agricultural sector shedding jobs, civil unrest is likely to follow. The National Treasury has warned of that, too. The national economy and balance of trade would also be significantly undermined if SA shed its food self-sufficiency and relied increasingly on imports.

We have the diagnosis from the president. It is now up to Godongwana to administer the right medicine. It is essential that we get back to basics, and there is little more basic than the need for food. No doubt the budget will also prioritise the load-shedding crisis — SA jobs and industries depend on its resolution.

Policy interventions for the agricultural sector will have to come a close second in the matrix — for the sake of its workers, and also for every resident of this country who relies on our food value chain for daily sustenance.

• Van der Rheede is CEO at Agri SA.