Amid warnings of increasing strain on the grid and as South Africans brace themselves for their worst winter yet, it's worth contemplating the implications of this worsening scenario for the country's food producers given their role in providing for our most basic need of all – food, writes Christo van der Rheede.
South Africa is more than two months into the interventions announced by President Cyril Ramaphosa to address the load shedding crisis during his State of the Nation address. In this short time, the Minister of Electricity has been highly visible, but the much-touted state of disaster has already been terminated even as load shedding escalates, causing growing unease and economic costs across all sectors of the economy.
As banks now warn of the possibility of grid collapse and South Africans brace themselves for the worst winter yet, it's worth contemplating the implications of this worsening scenario for South Africa's food producers given their centrality to the most basic of needs for us all – food.
When the state of disaster was first mooted, Agri SA – amongst others – was openly skeptical about the likely effectiveness of this intervention. Indeed, it was our view that government could do much of what needed to be done without such a declaration. Having taken a different view, government enacted the disaster regulations (which it was then forced to withdraw), but it remains unclear as to what was accomplished.
Government has argued that it was able to put measures in place to "enhance interventions by the National Energy Crisis Committee in terms of the Energy Action Plan". While it's difficult to point to these 'enhancements', what is glaring is the missed opportunity to implement the concrete measures necessary to protect food security for the current and upcoming seasons.
Notably, after implementing regulations that recognised food production and food storage facilities as essential infrastructure, government failed to issue the directives authorised by the regulations to, for example, grant exemptions from load shedding or reduced load shedding schedules for essential infrastructure. That this power, perhaps the most consequential for essential infrastructure and food production, wasn't utilised before the termination of the state of disaster must be the greatest failing of this short-lived intervention.
The consequences of this oversight are far-reaching. South Africa has already seen food prices soar due to rising input costs caused by a weaker rand and after the invasion of Ukraine by Russia. With food inflation now at a reported 14%, the addition of the cost of load shedding can only put more pressure on consumers and producers alike. And yet high prices are only one part of the equation; food shortages are the flip side. The stories of retailers like KFC running out of chicken have already filtered into our discourse, but the longer-term consequences may be worse as our grocery store shelves offer less and less of the products we need. As supply constraints raise prices further, the real effects of the shortages will be most acutely felt by the poor.
At the same time, the declining capacity of South Africa's farmers to produce food will also eventually lead to job losses. After all, it's unrealistic to expect farmers to continue to shoulder the growing cost of labour even as the sustainability – never mind the profitability – of farming operations declines. This loss of jobs will in turn plunge more people into poverty, increasing the gap between those who can and cannot afford food, and dramatically reducing food certainty for many households.
South Africa consumer inflation food prices closer to the peak
Notwithstanding what was promised under the state of disaster, we are back to where Agri SA believed we should have been from the start – looking at what can be done outside the parameters of a state of disaster. And the interventions required remain unchanged.
As the country continues to languish in this crisis, pragmatism becomes more critical to keep key sectors of the economy afloat. There is no way to ensure the ongoing viability of farming and food production operations in South Africa without an adjustment to the load shedding schedule that takes into account the particular needs of food production. An exemption from load shedding is ideal, but the reality of South Africa's worsening crisis with winter on the horizon requires more flexibility and creativity.
But we don't need to go back to the drawing board. There have already been interventions like load curtailment – where load shedding is avoided but energy users work with Eskom to reduce or increase energy usage in line with the demands on the grid – have already been piloted and shown to work effectively. We can also construct load shedding schedules to give food producers longer periods of continuous power (with the unfortunate side effect of longer continuous load shedding).
These measures aren't nice-to-have concessions for farmers – they are vital interventions to stabilise and protect the country's food security. The fact is, South Africa is sitting on a knife's edge and the consequences of growing hunger across the nation will be a catastrophe we simply are not prepared for; that much was proven in July 2021.
We also need to look at solutions beyond the grid. Government must revisit the fiscal interventions aimed at relieving the pressure on food producers. The exclusion of critical parts of the food production value chain, for example, from the expanded diesel rebate was an oversight that needs to be corrected. If the goal of the rebate scheme is to protect businesses and livelihoods, then the exclusion of high-value export goods like wine has no rational basis and this is an error that can easily be corrected.
We've wasted enough time on complex and novel interventions that have borne little fruit. And we have no more time to waste on band-aids that simply mask the problem without addressing its root. What we need now is to implement the common sense, tested, and practical solutions that will work to minimise the damage that load shedding is doing to the economy, our fiscus, and our daily lives. At the top of the list must be the interventions that will safeguard access to our most primal need – food. The state of disaster may have been terminated, but a food crisis still looms if we don't act quickly.
