The severe pressures put on businesses and the economy by the country’s energy crisis continue to worsen.
The latest company having to deal with the fallout of Eskom’s load shedding is Stratford Farms in Mooi River, KwaZulu-Natal.
The dairy farm was forced to dispose of thousands of litres of unpasteurised milk earlier this week after load shedding caused cooling systems and other mechanisms to fail.
Ross Stratford, director of Stratford Dairy Farm, warned that the cost of milk could skyrocket in the near future if load shedding persisted.
Stratford, speaking about the 11 thousand litres of milk that the farm was forced to dispose of on Sunday, said, “Due to the poor infrastructure in the municipalities, it is not equipped to handle the effects of load shedding. While our equipment indicated that it was receiving power, the voltage on the Eskom lines was insufficient which caused our cooling systems to fail, resulting in the spoiling of our milk.”
Stratford echoed the calls made by many in the past weeks for the government and the Department of Agriculture, Land Reform and Rural Development to take action to protect the industry.
“This latest incident will cost the farm an estimate of R85 000 just on the loss of the milk. This does not take into consideration the costs of repairs to the various equipment that was damaged by the load shedding.”
Stratford told “Business Report” that the farm sold its milk to producers who processed it to make dairy products.
“We had no other choice but to dispose of the spoiled milk. There are laws and regulations that we have to abide by in South Africa. The milk from cows contains bacteria which makes it unsafe to sell unpasteurised or unprocessed. We do not have the equipment to do this, our business is to sell to the milk producers who then carry out that process,” Stratford said.
The dairy farmer said the impact of load shedding had been felt for months as costs continued to mount.
“The input costs, not just at our farm but the industry as a whole, have been soaring. We are in crisis management mode. When we are being load shed we have to run our generators on fuel, which is a costly exercise. The entire supply chain is affected, but retailers want to keep the costs of milk as low as possible, to drive customers to their stores. We are unable to raise the price of milk that we sell, which means we are forced to cut costs in other aspects of our business.”
He said some of the cost-cutting measures that were implemented included finding cheaper feed for his cows.
“I do not see where else we can cut costs. Our insurance is getting maxed out due to the number of claims that have been put through, which will also add to our costs when the premiums go up. If the situation continues from Eskom, prices will have to be hiked, which will eventually be felt by the consumer. Production will decrease, putting food security at risk in the country.”
Watch the video that was posted by Alan Stratford, founder of Stratford Farms on Twitter that went viral:
Thank you Eskom when is enough enough .... pic.twitter.com/t4ItHyQZIw
— Alan Stratford (@AlanStratford1) January 22, 2023
The Agricultural Business Chamber of South Africa (Agbiz) said on Monday that the high levels of load shedding had increased food security risks and financial pressures on farmers.
Agbiz has been lobbying for load shedding to be set at no higher than stages 2 or 3, saying it was critical in the near term.
Agbiz has also been having meetings with Eskom and the Department of Agriculture, Land Reform and Rural Development to find ways to ease the pressure on agribusinesses.
“In the near term, Agbiz has urged for less severe load shedding in areas under irrigation and food-processing facilities,” it said.
About 20% of maize, 15% of soybean, 34% of sugar cane and nearly half of the wheat production were produced under irrigation and farmers faced huge challenges thanks to persistently hot and dry conditions, coupled with the constrained ability to irrigate, it said.
Fruit and vegetable farmers also relied heavily on irrigation and thus faced similar challenges.
Similarly, in the dairy industry, aquaculture, red meat, poultry, animal feed manufacturing and piggeries there were also concerns that load shedding beyond Stage 2 made operations and planning challenging, as these industries all required continuous power for their day-to-day activities.
Getting creative to deal with load shedding sees production decrease
Stratford told “Business Report” that a farm down the road from his tried to work around Eskom’s load shedding by operating when the schedule allowed.
This meant the farm sometimes had to operate at night when power was being supplied by Eskom.
“The quality of the milk gets affected because the cows have to go through their normal routine to produce good milk. They have to be happy and graze at a certain time to ensure when it is milking time, the milk produced is of a higher quality. The farm down the road tried to work around the schedule of load shedding but saw production decrease from a cow that usually produces 18 litres of milk, drop down to 12 litres,” he said.
The hot weather being experienced throughout the country at present was not helping farmers.
“Some farmers are referring to the heat wave moving across the country as a drought. Us dairy farmers have to be producing milk all year round and we need to get a break from the government. It is not just the milking of cows that is affected by the power cuts. We need electricity for irrigation to plant crops so the cows can graze. If I plant a crop of grass in a field now but I am not able to irrigate it, production will decrease drastically.”
The DA has called for a plan to be laid out by the Department of Agriculture to help farmers deal with the fallout from load shedding.
The DA said yesterday: “The Minister of Agriculture Land Reform and Rural Development, Thoko Didiza, is yet to release a plan to assist the agriculture sector. Last week Eskom announced that there was a positive engagement with the minister and the sector, yet no plan has been tabled.”
The party added: “The cost incurred by continuous load shedding can never be recovered. It can take farmers up to five years to fully recover from one season's crop failure. Where mitigation plans are in place, they must be shared and executed immediately to avoid a disaster situation.”
One of the farm’s customer’s had to dispose of milk that had spoiled because of load shedding:
Bad bad news...my milk buyer also lost milk due to power issues .... dumping milk . .uyafiwe indlalo ...sizolamba pic.twitter.com/BAJ5Ij4ZmV
— Alan Stratford (@AlanStratford1) January 23, 2023
BUSINESS REPORT