a) (i) The Department of Agriculture, Land Reform and Rural Development established a Sector Energy Crisis Task Team comprised of government, industry, research institutions and sector entities. The work of the Task Team, engaging with Eskom looked at immediate, short and long term contingency plans to protect the sector against the negative impact of load shedding. The interventions will cover the sector at large including all categories of farmers. The interventions are also being aligned to the pronouncements delivered by the Minister of Finance during his budget speech statement.
The proposed interventions are:
As announced during my Budget Speech, the Department is establishing the Agro-Energy Fund at the Land Bank. This is a blended finance instrument where the state will provide a grant on a sliding scale per producer category combined with a loan from the Land Bank.
The focus of the Agro-Energy Fund is on energy intensive agricultural activities. These include irrigation, intensive agricultural production systems, and on-farm cold chain related activities. The blended thresholds and caps per category of producer are as follows:
Table 1: Grant Limits
Farmer Categorization |
Large Scale Farmer |
Medium Scale Farmer |
Small Scale Farmer |
Turnover |
>R10m <R50m |
>R1m-R10m |
>R50k -R1m |
% Grant of the Cost (valid Quotation) |
30% |
50% |
70% |
Land Bank Loan Component |
70% |
50% |
30% |
Grant Caps |
R1.5m |
R1m |
R500 000 |
(ii) The Grant caps will be according to Table 1 above; however, the cost of the infrastructure needed by the farmer will be informed by the farmer’s farm energy requirement assessment based on the kilowatts. The pre-assessment by a competent expert registered with the South African Photovoltaic Industry Association (SAPVIA) will be key so that the correct fit for purpose system is installed.
The Blended Agro-Energy facility will be used by qualifying producers for the purchase of capital equipment and infrastructure (CAPEX) for alternative energy sources directly linked to energy-intensive farming operations.
Table 2: Common high energy consuming activities at the farm level
Dairy Farming |
Piggery |
Poultry |
Field Cropping |
Horticulture including (Greenhouse) |
Milk cooling machinery |
Heating |
Lighting |
Cold Storage |
Cold Storage |
Lighting |
Ventilation |
Feeding machinery |
Tilling |
Irrigation |
Milking machinery |
Lighting |
Ventilation |
Irrigation |
Ventilation |
Feeding machinery |
Feeding machinery |
Heating |
Lighting |
NB: the list is not exhaustive
b) DALRRD consulted sector stakeholders and continues to do so. The stakeholders consulted include the CEOs of industry, commodity organisations, research fraternity, farmers organisations and government entities including Eskom.