SA Canegrowers on Thursday added its voice to the growing call for the government to put short-term measures in place to mitigate the impact of load shedding, in this case on sugar cane producers, saying data it had compiled showed the sector was set to lose a massive R723 million in 2023 due to the rolling black outs.
Last week the Agricultural Business Chamber of South Africa also said it was holding continued engagements with Eskom and the government as severe load shedding had increased food security risks in South Africa.
Earlier this week the Franchise Association of South Africa (FASA) also added its voice to other representative business associations calling on the government to take urgent action to resolve the energy crisis and bring national security under control to prevent an explosion of unrest and civil disobedience.
SA Canegrowers said load shedding affected 1135 irrigated growers who employ more than 10 000 workers.
“Growers need a minimum of 6 hours of continuous energy for proper irrigation. As a result of the intermittency of the power supply, disrupting irrigation, irrigated growers will lose up to 40% water capacity. The resulting loss of yield could amount to more than R723 million,” it said.
The organisation said its scenario modelling showed that continuous load shedding at stages 4-6 would cost growers more than R723 million in 2023. An escalation to stages 6-8 could cost the industry more than R1.8 billion. Anything beyond stage 8 could cost the industry more than R2.4 billion.
An estimated 34% of South Africa’s sugar cane is produced in irrigated areas including Komatipoort and Malelane in Mpumalanga, and Pongola in KwaZulu-Natal.
Growers are expected to incur more than R189 million in additional energy costs in 2023 on account of the disruption to irrigation schedules. Most irrigated growers in KwaZulu-Natal and Mpumalanga operate on a Ruraflex system, which allows them to pay a lower tariff for operating during low demand times. But the converse also applies – growers pay a significantly higher rate for pumping during peak demand times.
But a result of loadshedding, growers had been forced to irrigate whenever electricity is available, regardless of demand, SA Canegrowers said.
Meanwhile, growers also faced yield losses as they had fewer hours of continuous energy supply.
“The continuation of load shedding without any arrangement to enable irrigation will also have long-term implications. Sugar cane stalks left in the ground can produce cane for up to 10 years. Insufficient irrigation not only reduces cane quality and causes yield losses, but it will also lead to increased stool mortality, significantly shortening the lifespan of the cane,” SA Canegrowers said.
This was as growers already faced significant headwinds, it added.
Milling giant Tongaat Hulett was placed under business rescue in October 2022 and remained in that process. Meanwhile, the industry faced an increase to the destructive health promotion levy (sugar tax) when Finance Minister Enoch Godongwana delivers his Budget Speech next month, SA Canegrowers said.
“With milling giant Tongaat Hulett in business rescue, and the destructive Health Promotion Levy already hampering the industry, these losses are potentially catastrophic for growers and the industry’s workers,” it said.
SA Canegrowers said it was, therefore, appealing to Eskom and the government to help the industry in particular, as well as the broader agricultural sector, to find urgent solutions to mitigate the impact of load shedding.
Some of the short-term measures SA Canegrowers had asked government to consider include restricting loads shedding to stage 4 in irrigated cane growing areas during peak watering season, diesel rebates for growers utilising generators and tax rebates for those investing in alternative energy sources.
“We will continue to engage with all industry stakeholders as we work to save the one million livelihoods that the sugar industry supports,” it said.
BUSINESS REPORT