New water tariffs hike on the cards for farmers?

Agricultural federation Agri SA said a hike in water tariffs would effectively bring marginal farms to the brink of collapse.

The Department of Water and Sanitation will, this week, hold national raw water tariff consultations to determine the cost of water for the agricultural sector.

These critical discussions follow the sector-specific consultation on 16 August 2022, and the outcome will significantly impact the viability of many farmers.

Farmers already hit with fuel and fertiliser costs

The consultation comes amid numerous price hikes in fuel and fertiliser. 

“These price increases have affected the entire value chain, especially regarding the cost of transporting food to consumers, and this is reflected in the rising cost of food for South African households,” said Agri SA law and policy executive Janse Rabie.

“An above inflation increase in the raw water tariff would only compound the inflationary pressure on already squeezed consumers.”

Farmers bear the brunt of collapsing water infrastructure

The farming federation has urged government to address the ongoing poor delivery of water-related services to farmers. 

“The service delivery shortcomings include underspending on service delivery in some areas, poor demand management in Nelson Mandela Bay to the detriment of farmers,” explained Rabie.

Klein Karoo is also facing water tariff hikes despite farmers shouldering the burden of infrastructure maintenance and intermittent water availability.

The farming sector is the largest user of water resources, and there is an onus on farmers to fund their share of the national consumption. 

But, there is also a responsibility to ensure the country’s food security and the sector’s employment.

“The tariff must remain at a rate that keeps the sector financially sustainable.”

A significant increase in the tariff would, in turn, impact negatively on consumers, forcing food costs to escalate further. 

Discussions are currently underway concerning the revision of the current raw water pricing strategy. In addition, Agri SA participates in that process to ensure that the country maintains a viable agricultural sector. 

“The revisions to the strategy must include eliminating the zero-base budgeting model that introduces opacity into the budget.

“Agri SA is committed to supporting a fair raw water tariff regime that enables the agricultural sector to flourish,” said Rabie.

The national consultations will take place on 26 August 2022.

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