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Power hikes 'bad for farmers'

2010-01-14 22:12

Bloemfontein - Free State farmers and rural communities could face a crisis if Eskom's proposed tariff hikes are granted, Free State Agriculture said in Bloemfontein on Thursday.

The group's main concern was "farm profitability" and employment in the sector, it's president, Louw Steytler, said at hearings into Eskom's proposed tariff hike.

The hearings were organised by the National Energy Regulator of South Africa (Nersa).

Eskom wanted a 35% price hike each year for the next three years.

"This is critically important. The production of maize and wheat could cease to be profitable."

Economic activity in rural areas


If a crop became unprofitable, farmers would not plant it, he told the panel.

"The only economic activity in rural areas is agricultural."

Steytler called the Free State the "bread basket of South Africa" as far as maize and wheat production were concerned.

In addition small-scale farmers would not survive these increases, he warned.

The only other presentation was made by Cosatu in the province, which also came out strongly against the proposed increase.

Free State Cosatu secretary Sam Mashinini urged Nersa's panel to, "this time" take its presentation seriously. Mashinini said the union federation's presentation in 2009 was not taken seriously and Eskom's hike was granted.

Job creation will be affected

Nersa CEO Smunda Mokoena later questioned this remark and wanted to know if Mashinini knew what Nersa's role was. Mashinini said it was to look at all sides of the matter.

It was time "the majority of the people in the country be heard", because the last time "the impression we had was that only one side (Eskom's) was listened" to, he said.

The increase would affect job creation and destroy small and medium businesses in the province, Cosatu feared.

Furthermore, low-income households would go for substitute "dirty" energy sources because they would not be able to afford power.

Referring to the mining areas such as Welkom, where job losses were already high due to the global economic crisis, Mashinini said huge power increases would have a devastating effect.