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- Government has launched a R1.2 billion Agro-Energy Fund to move farmers away from the Eskom grid and invest in alternative energy solutions.
- Farmers will be able to receive a grant of up to R1.5 million and finance a loan for solar energy, biogas and biomass plants.
- Small, medium and large-scale farmers will be able to apply for a grant and loan.
The agricultural industry has been given a financial boost from government to mitigate the effects of load shedding on farming and food production.
Farmers countrywide will now be able to apply for funding up to R1.5 million for renewable energy sources including solar energy, biomass and biogas plants through the Agro-Energy Fund.
The fund, valued at R1.2 billion, was recently launched by the Department of Agriculture and Land Bank, and is set to benefit dairy farms, piggeries, poultry farms and irrigated commodities, among others.
The move comes amid concerns over food supplies due to ongoing load shedding. In 2022, one farm was forced to dump some 12 000 litres of spoilt milk in one day due to power cuts.
A poultry farmer planned to claim from Eskom after electricity disruptions led to the deaths of as many as 50 000 of his birds.
Last year, SA's largest chicken producer Astral said the poultry industry was facing a record crisis, as the company spent around R1 million a day on diesel and faced a shortage of eggs and chicken supply problems.
Grants and loans
Agriculture Minister Thoko Didiza said the new fund would follow a blended finance model, where farmers could apply for a grant and additional loan to finance their purchases of alternative energy sources.
Through the fund, small, medium, and large-scale farmers will be able to purchase equipment and infrastructure to aid energy-intensive activities including cold chain production and irrigation.
Small-scale farmers can apply for grant funding up to R500 000, while medium-scale farmers can apply for funding up to R1 million, and large-scale farmers up to R1.5 million.
Grant and loan funding will be weighted differently depending on the size of the operation. Small-scale farmers will receive a proportionally larger percentage of grant funding (70% grant; 30% loan) while large-scale farmers will receive a proportionally larger loan (70% loan; 30% grant).
Funding for medium-scale operations will be weighted fifty-fifty.
Farmers can apply through the Land Bank and will need to present a business plan and a plan for the alternative energy source upon application. Applicants also need to have an environmental licence and approved licence from the National Energy Regulator of South Africa (Nersa).
They would furthermore need to show a capacity to implement self-use renewable energy for their farming operations.
Improving profitability and food production
Speaking at the launch, Didiza said: "The country, particularly the agricultural sector, has suffered from the energy cuts. As a sector, we felt it prudent to provide solutions to enable food production and minimise production interruptions, particularly for producers who rely largely on energy."
The move has been welcomed by the agricultural industry, which has suffered millions of rands in losses due to ongoing power cuts. The energy-intensive industry is very reliant on constant supply of electricity, with more than 79 000 customers on Eskom's grid as of 2021.
Speaking to News24, AgriSA CEO Christo van der Rheede said the industry has been urging government to assist farmers.
Rheede said: "Poultry farmers have lost chickens. Dairy farmers have lost milk. Farmers have lost seedlings because there was no irrigation available to them. There has also been a lower demand from abattoirs for meat because it would get spoiled.
"We think it is a good start, even if there is limited funding from government," said Rheede.
