DA calls for waivers on red tape in Agro Energy Fund to protect farmers against loadshedding

1 September 2023

Following a sustained public campaign by the DA in which we called for urgent action to cushion farmers against the debilitating impact of loadshedding, we cautiously welcome the announcement made by the Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, on a new Agro Energy Fund (AEF).

The AEF is a blended finance programme between the Department of Agriculture, Land Reform and Rural Development (DALRRD) and the Land Bank that will provide support to farmers to acquire renewable energy assets to power their operations.

The DA however, remains deeply concerned that the DALRRD and the Land Bank have placed insurmountable red tape as part of the list of requirements that farmers must comply with before they qualify for funding under the AEF. This is highly exclusionary and will leave many farmers ineligible for funding.

We are therefore calling on Minister Didiza and the Land Bank to consider implementing waivers on some of the qualifying criteria for applications that provide costed and bankable business proposals. If a farming enterprise can make a strong business case of proven business operations that are sustainable, it should not be disqualified from the AEF.

Some of the problematic qualification criteria that have been put in place by the Land Bank for a farmer to qualify for funding include:

Proof of land ownership or proof of access to land;

Feasibility or energy expert report outlining the energy requirement and significant energy uses of the farm including the infrastructure design, must be submitted with the application;

Environmental authorisations (EIA/EA) to be in place where applicable in terms of the regulations;

A generation license from NERSA where applicable in terms of the regulations; and

Quotations for Capex requirements: to specify the aftercare service, warranties and lifespan.

With the DALRRD always engaged in constant fights with some farmers on lease agreements on state farms, it would be extremely difficult for these farmers to provide proof of access to land. Relatedly, obtaining environment authorisations and a licence from NERSA will take inordinate amounts of time and cost farmers money that they do not have.

Loadshedding has had a devastating impact on our agriculture sector. The government should be making it easy, not difficult, for farmers to access funding that would help them address the problem of power cuts as South Africa’s food security depends on it.

Issued by Noko Masipa, DA Shadow Minister of Agriculture, Land Reform and Rural Development, 1 September 2023