The continued rolling blackouts would have an impact on yield and quality, and for this reason the impact was not necessarily immediate but would only be realised at the time of harvesting, John Hudson, Nedbank’s head of agriculture, said yesterday.
This was only one example of the impact of the blackouts, which wreaked havoc in the sector and posed a risk to all enterprises be it crop, horticulture or animal production.
“Some farmers have moved to renewable energy as part of their energy mix, but this does not solve the problem for all farmers and all circumstances not to mention the capital cost of installing such a system. I have no doubt though that many farmers and agribusinesses are concerned about the security of supply and the cost of electricity, and alternative energy sources are being considered,” Hudson said.
Cobus de Bruyn, the head of agriculture client value proposition at Nedbank commercial banking, said during this time of the year, agriculture was extremely dependant on reliable electricity supply for the sake of irrigating, harvesting, packing, and processing.
“Horticulture, field crops and livestock sectors as well as secondary agriculture are all negatively impacted by the continuous blackouts. We are in a perfect storm considering the world economy, high input prices, our infrastructure falling apart, and challenges with water and electricity supply. The challenges experienced now are not sustainable and action is required immediately to resolve the devastating impact of blackouts,” De Bruyn said.
De Bruyn said the impact of blackouts would spill over to insufficient supply of water, resulting in agribusinesses not able to irrigate or use water in all the different processes.
“We must be grateful for the good rainy season that we are experiencing. If we were in a drought, the situation would have been much worse. Our water resources need urgent attention to ensure that we do not experience water outages.”
Meanwhile, other cost inputs of farmers are rising.
The National Agricultural Marketing Council (Namc), looking at trends in selected agricultural input prices this month, said the increase of international fertiliser prices was driven by a confluence of factors, including surging input costs and the supply of those inputs.
Disruptions caused by sanctions imposed by Russia to restrict the flow of supply and restrictions on exports had exacerbated price volatility of fertiliser prices. Global developments affect the South African fertiliser market as the net importer of fertiliser.
Similarly, South Africa’s fuel prices are influenced by international and local factors.
Local factors that influence fuel prices are the exchange rate, inland transport costs, fuel tax, and retail profit margin, among others.
“The continued increases in input costs might affect the ability of farmers in South Africa to continue farming sustainably and profitably,” Namc warned.
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