The impact of load shedding on food security

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DUDU RAMELA: We continue with the energy theme and take a look at the impact of ramping up load shedding. We’re currently sitting at Stage 6 load shedding, which will go down to Stage 4 tomorrow at 5am. We speak to Christo van der Rheede, executive director at Agri SA, on the food security situation in the country – what that looks like, or what that would possibly look like for the year 2023.

Thank you very much, Mr van der Rheede, for availing yourself this evening. That’s just it, right? If you could just summarise for us what the impact of these rollouts has been on the agricultural sector, which trickles down to you and me, and what lands up on our plates.

CHRISTO vd RHEEDE: Good afternoon to you and to all your listeners. I really want to wish you all of the best for the year that lies ahead.

I think what is critical is to remember that the agriculture sector – and I’m not discounting any of the other economic sectors, but everything starts and falls with the agriculture sector, because it starts with a plate of food – needs to keep that food as affordable and as available as possible. We have seen how load shedding and especially Stage 6 load shedding has had a very negative impact on various sectors.

The fruit sector, for example, needs to keep the fruit in coal storage, to not have the quality of it compromised; and without electricity that can happen.

It is the same for vegetables. Your slaughtering houses for poultry, for other livestock – they’ve got a massive challenge in that they cannot deliver slaughtered livestock to the market.

In many instances, irrigation farmers have had to contend with a heatwave in the Northern Cape, and they stand to lose many of their seedlings.

And then in addition to that, your other sectors, for example your dairy sector, cannot milk the cows and cannot, for example, keep the milk in cold-storage facilities because there’s no electricity, or the electricity is off for longer periods than they’ve anticipated.

DUDU RAMELA: Of course, we do know that the president is meeting with various stakeholders today. If you, again, were in that meeting, [what would be] your submission, essentially?

CHRISTO vd RHEEDE: We’ve met with the department of agriculture – that’s our Minister Thoko Didiza. She invited the entire sector and we said to her: “Minister, we run the risk of farms being rendered unprofitable, farmers facing huge losses as a result of this. Secondly, if that is the case, it’ll have an impact on food security at the end of the day – the availability of food. This is the last thing that you [would] wish for South Africa, given the economic context that we find ourselves in. We cannot afford for our people to go hungry.”

And then we said there are solutions. Let us discuss that. We will have a meeting again tomorrow with Eskom and hopefully in that meeting we will be able to convince Eskom of different strategies, perhaps have a more adaptable load-shedding schedule as opposed to this rigid schedule that they are applying at this point in time, and have a look at how one can advantage certain areas by giving them lower load-shedding levels so that they can do things to process food and make sure that food gets fresh to the various destinations.

DUDU RAMELA: Christo, the ideal here is not to have load shedding, but I guess going in to negotiate for a more flexible schedule is a starting point. We understand that the agriculture minister actually set up a load-shedding task team. Will that go some way in providing relief – or a solution, at least?

CHRISTO vd RHEEDE: Indeed. The idea of the task team is to do two things. One is to bring across the challenges that the industry faces, and to highlight the risk.

Remember, there’s political risk. Imagine if there’s no food on the shelves – the country can go up in flames.

Secondly, there’s also economic risk if many of our farmers close shop. Who will produce our food? It’s not that every Dick, Tom and Harry can be a farmer. It’s not land that produces food, it’s expertise, and we need to protect that expertise, harness it and grow it.

And there’s also biosecurity risk, because you have to keep your vaccines at a certain temperature, and we cannot afford a breakout of foot and mouth or any other diseases in the country.

Then also there’s the security risk. Many of our farms [have] very vulnerable farm workers and farmers, and we need to keep them safe. And then there’s a socioeconomic risk, because many workers can lose their jobs in the process and that will exacerbate poverty and unemployment.

So those are the things that will be highlighted by the task team.

And then, what are the solutions?

We believe that this will be a problem that won’t be solved overnight, such as at how we make, for example, solar panels and solar installations much cheaper, maybe through a subsidised system.

Or how do we increase the rebates for farmers to get their hands on more affordable [power generation] and what are the other tax incentives for people to start implementing their own power-generation facilities and expand their capabilities?

DUDU RAMELA: Sure. What is the risk, Christo, if we continue on this trajectory? If a solution is not found either in the short or long term you spoke of, if there’s no food, there’s the political risk. If there’s no food, then we run the risk of seeing people taking to the streets once more. The price of food is already expensive, [even] your basic items, [with] a lot of people not being able to afford those basic nutritional items. We keep talking about how our children need nutritional food in order to grow as holistic human beings, but what is the risk if we continue on the path we are on?

CHRISTO vd RHEEDE: You’re so right. I forgot to mention that. And I think that’s the most important [aspect] – the health risk, because you need healthy food to grow healthy people and sustain their health.

You don’t want a situation where people suffer from malnutrition, or where there’s famine raging on a wider scale.

But I think the most important thing for me is there are already indications of farmers closing shop.

One farmer told me [that] to run a dairy is no longer profitable, due to the fact that they must fork out millions of rands to buy diesel.

One farmer told me he spent approximately R1.5 million just on diesel over December. Now, if you start making your calculations you come to a point where you say running this enterprise is no longer profitable.

In addition to that, people who produce vegetables on a large scale, some of them are even saying they will cut down on the amount of hectares that they are planting at this point in time, and that will have an impact on food availability – which will have an impact on food prices, which will have an impact on food inflation, which will eventually have an impact on people’s ability to access food. That’s a constitutional obligation.

Remember, Section 27 of our national Constitution says people must have access to sufficient food and water. Politicians do not understand that obligation, and that’s why they cannot execute it. And that’s why that obligation rests squarely on the agricultural sector.

DUDU RAMELA: I remember last year Namibia and Botswana wanted to stop importing produce from South Africa, saying they wanted to stimulate their own markets and their own agricultural sectors. So, with everything that has been happening with load shedding, what has been the impact on getting some of our produce across the borders?

CHRISTO vd RHEEDE: Well I think from time to time they still continue with that, but it has also had an impact, a negative impact, on their consumers because they do not produce enough for their own countries – especially Botswana.

So we know about many consumers who complain, saying they want to get access to South African products. I’m not saying that they shouldn’t be given the opportunity to develop their own agriculture sector – that’s a must – but you cannot do it by closing your borders. You need to remain competitive. Otherwise, if you close your borders then your own foodstuff becomes so expensive and so scarce and that is to the great detriment of your own people.

And that’s the risk that we run at this point in time – if we cannot export quality food to the rest of the world it means that we cannot earn foreign exchange. If no new money comes into the country, then your people [become] impoverished.

You have greater unemployment, and your people suffer as a result of that. So you must make the most of global trade.

South Africa has been doing that quite well, especially with exporting our minerals, with exporting our vegetables and fruit, and exporting manufactured cars and so forth.

That’s the kind of thing that we need to do to grow this economy, to open up and give the entrepreneurs the opportunity to invest – and stop imposing all kinds of regulations that make it difficult for people to do business.

DUDU RAMELA: Some of the chicken chains in South Africa have indicated the impact of load shedding on them. One outlet in particular had to temporarily close its doors, because chicken supply was struggling with the constant power cuts. In the agricultural sector as a whole red meat is already quite expensive, so could we see it getting worse with load shedding? We also hear a lot about Russia/Ukraine, etc. But when we take a look at some of the factors impacting us directly here at home, chief among which is load shedding, could we see the price of meat also becoming unaffordable?

CHRISTO vd RHEEDE: Indeed. What happens is, because agriculture is a long-term business, it’s also very cyclical. So you always see the impact of a massive increase in the price of diesel or fertiliser on packaging – the logistics. Also the price now [after] the increase of electricity, and load shedding on top of it – you’ll see the impact of that always three or six months later. That is exactly what is happening. We only feel the pinch now, due to the war in Ukraine where that resulted in all kinds of logistic problems – cost increases, input cost increases and so forth. That is to be expected.

What we need to realise is that we don’t have a shortage of food production on farms. Farmers do what they can do, and they will always produce at a rate. When there’s demand, they will produce in accordance [with that].

But your bigger challenge, obviously, is the fact that because of the load shedding they cannot slaughter their cattle, or the abattoirs cannot slaughter the chickens, and your fast-foot outlets are not going to slaughter these things.

They want it to arrive at their outlets properly packaged and properly sealed, [so] they can take it out of the box, out of the plastic, out of the packaging, and fry it and sell it. That’s the kind of current crisis that we are facing – that our slaughtering houses are negatively impacted by this extended load shedding.

In addition to that, yes, farmers are also going to experience – and some of them are already experiencing – losses because if your conveyer belts do not have electricity to carry the food throughout the places where you keep your chickens or your poultry, then you run risks. Or if there’s no electricity to make the places cooler or hotter, then your chickens die as a result.

So there’s a multitude of factors or complications if there’s no electricity.

DUDU RAMELA: Christo van der Rheede, executive director at Agri SA, thank you very much for helping us make sense of all of that.