Perishable sector power struggle

AgriSA is set to oppose power

supplier Eskom’s application

for a 19.9% tariff for next

year, highlighting that the

perishables sector will be

hardest hit – and it could be

the last straw for marginal

farmers, on the back of the

debilitating drought in some

parts of the country.

Dr Requier Wait, head

of trade and commerce at

the industry lobby group,

highlighted that the rate

of cost increases in the

agricultural sector outpaced

the growth in revenue.

Electricity represented a

growing share of these costs,

he said.

“Farmers who irrigate

their crops – including grain,

fruit and vegetable growers

– are especially exposed to

increases in electricity cost.

The fruit and vegetable sector

further has to maintain the

cold chain in their packing

and storage processes, which

again relies on electricity,”

Wait pointed out.

He believes agricultural

producers have limited room

to mitigate big tariff increases,

as the Eskom tariff structure

provides for a large fixed

cost for the availability of

transmission and distribution

lines.

Government support for

farmers was extremely low

compared with international

norms, Wait added.