SA’s rolling blackouts driving up farmers’ production costs

Source: Glenneis Kriel, Farmer’s Weekly, 3 November 2021, photo credit: malawi24.com

PwC, a multinational accounting and auditing firm, expects the rolling blackouts experienced across South Africa to reduce the country’s GDP growth by three percentage points, and potentially cost the country 350 000 jobs this year.

Christie Viljoen, senior manager at PwC, told Farmer’s Weekly the agriculture sector was included in this scenario, because it was forcing primary and secondary producers to invest in expensive alternative energy solutions to alleviate the impact of so-called load-shedding.

Failure to adapt, however, would drive up costs, by resulting in product and productivity losses.

Jan Rabie, a crop producer in the Robertson Valley region, said he did not believe that load-shedding would have as big an impact on agricultural production as it did in the past, if Eskom managed to keep it to Stage 2.

The reason for this, he said, was the fact that most farmers and agricultural businesses, especially higher up the value chain, had already invested in technologies to alleviate the impact of load-shedding and years of unreliable energy supply.

“Most farmers and packhouse owners were forced to invest in generators or renewable energy sources to maintain the cold chain, or larger pumps and main lines to enable the irrigation of bigger areas over shorter times when electricity is available,” Rabie said.

These investments were, nevertheless, driving up production costs, which in turn were adding pressure on farm margins.

Source