The drastic increase in electricity tariffs is disastrous for farmers. It was not budgeted for, farmers cannot afford it, and they also cannot pass the cost directly onto consumers. This eats into the profits of farming enterprises and undermines their sustainability.
Farmers spend approximately R10 billion per year on electricity, and this increase will cost the industry a further R1.27 billion. That is R1.27 billion less returning to farms to keep agricultural operations running. This is in addition to other government-imposed costs, such as increases in minimum wages, toll fees, diesel, and taxes.
Small and medium-sized family farms are particularly vulnerable to poor policy decisions and government tariff increases, which can mean the difference between survival and collapse.
Farmers have already planted, fruit has set or is being harvested, and input budgets have already been spent. They have no choice at this stage but to absorb the financial blow. Reducing electricity usage is not an option—water still needs to be pumped, cooling and heating systems must operate, and essential processes cannot be cut.
Irrigation farmers, dairy, poultry, pig, and fresh produce farmers will be hit particularly hard by this increase. Farmers feel that they are now paying the price for years of mismanagement, looting, and cadre deployment.
Against the backdrop of a draconian new Expropriation Act, the BELA Bill, which threatens Afrikaans schools in rural areas, and a new law that seeks to regulate farming activities on private land, the excessive increases in government-controlled costs, such as electricity, are just another obstacle placed in farmers’ way by an anti-agriculture government to undermine South Africa’s competitiveness.
This is why Saai, as a network for family farmers, invests so much time, energy, and resources in developing alternatives and strengthening farmers’ resilience against state interference.
Saai has partnered with Land Bank to introduce a special financing instrument that makes solar power more affordable and accessible to farmers, regardless of their size or scale. This solution also includes a sliding scale of subsidies, which are not dictated by race or political sentiment.
In the long term, Saai’s agreement with C5 Capital in Washington to develop a series of small modular pebble-bed nuclear reactors will contribute to making rural industries more independent from ideologically driven state institutions.