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Agri SA says energy plan reforms need to be immediate to help ailing industry recover

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Agri SA says an estimated 25% of the country’s food production is reliant on irrigation and energy-intensive industries.

File picture: Tracey Adams/African News Agency (ANA)

AGRI SA says it is seeking clarity as to how the energy plan reforms will apply to the agricultural sector.

The federation says an estimated 25% of the country’s food production is reliant on irrigation and energy-intensive industries and that alleviating load shedding is therefore a vital concern for the agricultural sector.

“The implementation of the president’s plan will thus be crucial to ensuring South Africa’s food security,” Agri SA said on Wednesday.

The federation went on to say that some of the measures should have been implemented much sooner.

“Of prime importance for relieving the burden of load shedding on the sector is the removal of the 1MW limit on embedded generation in the sector. This limit has made it uneconomical for the sector to invest in power generation and there is no reason why the 100MW generation cap should not have been previously extended to the agricultural sector.

“The sector has the ability to significantly ramp up generation, but government must remove all unnecessary restrictions in order to unlock private capital investment in energy generation for the sector,” the federation said.

Agri SA said that engagements on this matter to date had yielded no results, and this must now be addressed with urgency.

It went on to state that Agri SA would be writing to Minister Gwede Mantashe to urgently address this matter.

“The escalation of load shedding has come at a particularly difficult time for the sector. Over the past year, the sector has seen above-inflation increases in the cost of vital inputs like fuel and fertiliser. The recent interest rate hikes have only exacerbated these cost pressures as South Africa’s farmers currently carry more than R190 billion in debt.

“The resulting increase in debt servicing costs will leave the country’s farmers in an extremely precarious situation. It is therefore imperative that government takes immediate action to curtail the additional costs that load shedding has imposed on the nation’s food producers by ensuring they can rapidly begin investing in small-scale embedded generation where possible,” Agri SA said.

The federation went on to say that it would make every effort to ensure that the sector contributed to the alleviation of the energy crisis, but government must take the necessary steps without delay to enable the sector to play its part.

“Government must also announce the details of the plan to enable the sale of excess power into the grid. This would ensure that the benefits of increased sector-generated energy are shared with Eskom-reliant consumers around the country – including those small-scale farmers who may not be able to afford the investment in embedded generation currently.

“If these limits on agricultural sector power generation are lifted timeously, government will also need to invest in the safety and stability of the energy infrastructure to ensure that the grid is prepared to handle any excess power generated,” Agri SA said.

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