Industry body Agri SA has welcomed the National Energy Regulator of South Africa's (Nersa's) publication of the Draft Market Inquiry Report into fixed charges and Eskom's Retail Tariff Plan.

The findings of the report confirm the concerns Agri SA has consistently raised regarding the disproportionate impact of recent tariff reforms on agriculture, the industry body says.

The inquiry concludes that while the move towards more cost-reflective tariffs is appropriate in principle, implementation has produced unintended consequences for sectors such as agriculture. It specifically recognises that irrigation-intensive farming operations have limited ability to shift electricity demand and that changes to the time-of-use (TOU) tariff structure have materially increased production costs.

The findings closely mirror the evidence submitted by Agri SA and its members, Canegrowers South African and Grain SA, during the inquiry. This demonstrated that a typical 250 kVA irrigated farming operation experienced an increase in yearly electricity costs from about R408 000 to R539 000 - a 32% increase in a single season.

Electricity has consequently become the second-largest input cost after labour.

Agri SA COO Jolanda Andrag says the organisation welcomes the inquiry's recommendations to strengthen customer-class impact assessments before tariff changes are implemented; review TOU tariff structures for sectors with limited operational flexibility; reassess capacity charge design to reflect customer use profiles better; introduce affordability safeguards and transitional measures; and improve transparency and stakeholder engagement throughout the tariff reform process. 

“These recommendations provide an important foundation for developing a fairer electricity pricing framework that supports both the sustainability of the electricity system and the competitiveness of South African agriculture,” Andrag states.

Agri SA will study the draft report, participate fully in the public consultation process and continue engaging with Nersa and Eskom to ensure the final report translates into practical reforms that protect food production, rural economies and South Africa's long-term agricultural competitiveness.