Load shedding and erratic electricity supply to farmers could threaten the availability of seeds for the next planting season as much of the seed production is done in the irrigation production areas, warns the South African National Seed Organisation (Sansor).
“The prevailing power cuts have a major impact on the seed sector. It impacts not only on commercial production of crops, but the supply side, especially seed production, ” Sansor’s policy and research manager, Dr Magdeleen Cilliers, said in an interview last week.
Sansor is a member of the International Seed Federation and African Seed Trade Association and represents members on various platforms in the international seed industry.
Despite the local agricultural season starting well during last year’s planting period, for many crops, the current heat as well the unprecedented load shedding and erratic electricity supply to farmers has affected irrigation, which could knock the yield at the end of the season.
"If one moves down the value chain, seed processing is also impacted. Companies have had no other option than to invest, at a significant cost, in solar and other alternative energy supply sources to keep the business running and to ensure the supply of seed. In the end, the cost of these actions not only reflect in seed prices, but will, ultimately, have an impact on consumer food prices, as we are already experiencing,” Cilliers said.
Sansor said South Africa urgently needed a solution to the energy crisis, not only for businesses to keep afloat, but also for employment and food security.
In this, Sansor is not alone. Several other industry players in the agricultural space are calling for government and Eskom’s intervention in load shedding, including the Agricultural Business Chamber and SA Canegrowers.
”Unless these challenges are addressed, the country’s agricultural sector won’t achieve the growth and job creation prospects it’s capable of. These are: the impact of energy shortages and load shedding, the expansion of export opportunities, land reform, collapsing local administrations, lack of progress on key regulations and the financing of the sector,” Sansor said.
The deterioration of municipal service delivery, prolonged approval processes of new products and the failures in the country’s network systems such as roads, rail, water, electricity and ports also presented major challenges to the grain and seed industry.
The high and often elevated input costs over the past months have knocked farmers’ financials with prices for fertiliser, herbicides and insecticides increasing by more than 50% during the past two planting seasons.
“There were a couple of reasons for the increases, such as supply constraints in China, India, the US, Russia and Canada; rising shipping costs and energy costs; and global demand. The ongoing war between Russia and Ukraine has added to the pressure on global input costs,” she said.
Cilliers said following the global challenges of Covid-19, last year was challenging for its members. This was due to the ongoing conflict between Russia and Ukraine, which continued to affect food and commodity prices. This added to existing supply chain disruptions and increased food insecurity.
“According to the baseline of the Bureau for Food and Agricultural Policy Agricultural Outlook for 2022 – 2031, the risk of a generally weak economic growth globally in the medium term, with a high probability of unpalatable levels of inflation, could have serious implications for South Africa’s food industry as well as imports and exports,” Cilliers said.
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