The Stage 6 rolling blackouts are detrimental to South Africa’s agribusinesses and the country’s economy. Ultimately, this meant that direct expenses increased and put pressure on profit margins of the entire value chain, Dawie Maree, head of Information and marketing at FNB agribusiness, said yesterday.
For primary producers, such as farmers, it was important to keep to irrigation schedules, especially during the warm/heat periods of the day.
“With load shedding, it might result in crops losing yield potential, and thus lower prices for farmers. For those who have generating capacity, this means higher costs because more diesel is being used,” Maree said.
Dr Marlene Louw, senior agricultural economist at Absa relationship banking, said with primary agriculture, the biggest concern around an increase in load-shedding intensity and frequency was having irrigation schedules disrupted.
“This has a severe impact when production areas experience extreme heat. Fortunately, for key export crops such as table grapes in Limpopo and the Northern Cape, the last few days have seen milder temperatures with some rain, Louw said
For secondary agriculture, she said packhouse and cooling operations were also disrupted by load shedding.
A notable number of these facilities had, however, invested in renewable energy sources such as solar, which alleviated some of the stress associated with increased load shedding.
For food manufacturers the same applied.
Louw said it spelt more costs in terms of diesel-backup generation.
“Again, we are working with a biological product and the upkeep of the cold chain is crucial for food safety. If something happens and the storeroom doesn’t function efficiently due to load-shedding intensity etc, it might result in big losses for manufacturers,” she warned.
BUSINESS REPORT