Energy fund for South African farmers

The South African government has announced a R2.5 billion fund to help farmers install renewable energy in order to keep operations going during the country’s daily power cuts.

Agriculture minister Thoko Didiza told parliament that the Agro-Energy Fund would provide farmers with between R500 000 and R1.5 million. It would focus on energy-intensive activities such as irrigation, exhaustive agricultural production systems and cold-chain logistics activities.

Funding will be a mixture of grants and loans, depending on the size of the operation. Small-scale farmers will get 70% in a grant, with the balance a loan to be repaid. Medium-sized operations will get a 50% grant and large-scale operations a 30% grant.

Didiza said the fund, which will be operated by the Land Bank, was the result of a task team in which government and agriculture had sought solutions to the impact of power cuts on the country’s farming operations.

Agricultural economist Wandile Sihlobo welcomed the fund, but said agriculture would need more than the R2,5 billion the government was so far providing. He pointed to the extensive irrigation for grains, fruit and vegetables and the high energy use by dairy, poultry and other industries, plus their extensive value chains.