The cost of load shedding on food production

The agricultural sector in South Africa is facing a challenging period due to the ongoing issue of load shedding, which has the potential to impact food production and prices. In a recent interview on CNBC Africa, Dawie Maree, Head of Information and Marketing at FNB Agriculture, discussed the implications of load shedding on the industry. Maree highlighted the critical connection between electricity supply and the cold chain, emphasizing the importance of uninterrupted power for industries like dairy, poultry, and pork production to maintain food safety. He explained that any disruptions in the cold chain can have significant repercussions on food production processes and costs. While farmers in grain production may have some flexibility to adapt to power outages, sectors reliant on the cold chain infrastructure face greater challenges. Maree pointed out that despite investments in generating capacity by many primary producers and processing facilities after previous blackouts, the reliance on diesel-run generators incurs substantial costs, ultimately leading to an increase in the cost of food production. Although Eskom recently announced a temporary reprieve from load shedding, the impact of the recent power rationing on farmers is expected to have far-reaching consequences. While the immediate direct impact may be minimal, the long-term effects on food costs and inflation are significant. Maree highlighted the proactive approach taken by farmers and agri-processors to explore alternative energy sources such as solar power, wind power, and biogas. He noted that some industries, like pork production, have the capacity to generate electricity from bio gas, creating an opportunity to sell excess energy back to the grid. However, the lack of support from Eskom in enabling farmers to contribute surplus electricity to the grid remains a hurdle to fully realize these potential benefits. In light of these challenges, Maree emphasized the importance of diversifying revenue streams for farmers, especially those in regions like the Western Cape, which have been grappling with severe drought conditions. He pointed out that integrating generating capacity on farms, as commonly practiced in Europe, could provide additional income opportunities for agricultural producers. The impact of load shedding on agriculture extends beyond immediate disruptions to day-to-day operations. The looming threat of higher food production costs and inflation poses a significant concern for both farmers and consumers. As the industry grapples with the dual challenges of power supply instability and climate-related risks, finding sustainable solutions to ensure the resilience of the agricultural sector remains a top priority.