AgriSA: Power tariff hike could cripple farming sector, threatening food security
SA is facing a major drought and the proposed tariff hike will have a major impact on food production.
JOHANNESBURG - AgriSA says the country is facing the worst drought in two decades and if Eskom's tariff increase is approved it is unlikely the farming sector will recover.
Organisations and businesses are making their presentations to the National Energy Regulator of South Africa (Nersa) about Eskom's proposed 25,3 percent tariff hike.
Nersa is holding another day of public hearings at Nasrec on Tuesday before making its decision.
The utility says it needs more funds to buy diesel in order to minimise load shedding and prevent further damage to the economy.
AgriSA's Thabi Nkosi says food security is already a major issue, with 25 percent of households unable to pay for the food that they need.
Nkosi says coupled with an electricity price increase, the impact will echo through the agriculture chain and affect the poor.
"Given the dire position of agriculture we are in, we are afraid that should these tariffs be approved, the sector is unlikely to recover."
Yesterday, the Chamber of Mines indicated that mine closures will increase from 30 percent to 60 percent and result in major job losses.
Businesses, the mining sector and municipalities have been adamant South Africans cannot afford another electricity price hike and warn that if it goes ahead, industries will collapse and jobs will be lost.
Meanwhile, mining and energy analyst Ted Blom says he predicts a 50 percent chance that the national power grid will collapse unless a short term solution is implemented.
Blom says he has been consulting and working alongside Eskom for about 30 years and says the utility is facing a coal shortage and cannot keep up with maintenance work.
The analyst adds that household solar is an immediate solution to add eight to 10 gigawatts to the grid.
"Unless we do this there is more than 50 percent chance of a grid meltdown, and I stand by my numbers."
Eskom will be able to respond at the end of the public hearings today.