Raw water tariff consultations must consider inflationary impact on food

Agri SA will this week participate in the national raw water tariff consultations with the Department of Water and Sanitation 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 have a significant impact on the viability of many farmers as a significant increase in the tariff could help push marginal farms to the brink of collapse. This would in turn impact negatively on consumers as it would also contribute to more expensive food costs. 

Agri SA and its members appreciate that the sector is the largest user of water resources and must therefore fund its share of the national consumption. But it is also vital for the country’s food security as well as the sector’s employment that the tariff remains at a rate that keeps the sector financially sustainable. 

The national consultations will take place on 26 August 2022, and Agri SA will be reiterating critical points it has conveyed to the department in its submissions. 

The consultation takes place at a time when farmers have been hit with numerous price hikes in important inputs including 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. An above-inflation increase in the raw water tariff would only compound the inflationary pressure on already squeezed consumers. 

Moreover, the government must address the ongoing poor delivery of water-related services to farmers despite payment of the tariff. The service delivery shortcomings include underspending on service delivery in some areas, poor demand management in Nelson Mandela Bay to the detriment of farmers, and the rising tariff in Klein Karoo despite farmers shouldering the burden of infrastructure maintenance and intermittent water availability.

Discussions are currently underway concerning the revision of the current raw water pricing strategy, and Agri SA is participating in that process as well to ensure that the country maintains a viable agricultural sector. The revisions to the strategy must include the elimination of 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. We will continue to participate in the government’s consultative procedures to protect the country’s food security and the livelihoods of South African farmers and farmworkers.

Media Enquiries 

Janse Rabie

Agri SA, Law and Policy Executive

076 451 9601