Is persistent “loadshedding” pulling the plug on agriculture in the Western Cape, South Africa?

Abstract

ABSTRACT Besides a few industry reports on the impact of loadshedding on agriculture, there is a dearth of literature on the electricity dependence and the impact of loadshedding on the South African agricultural sector. We aim to make two main contributions. First, we analyse the electricity dependence of the agricultural sector and assess how loadshedding impacts the sector's various economic activities. Second, we employ Interactive Qualitative Analysis (IQA) to determine the cause-and-effect relationships of loadshedding on the agricultural sector. We purposively selected 27 senior managers from the Western Cape agricultural value chain to participate in the study. The IQA reveals eight categories influenced by loadshedding: operational capacity and scheduling, input supply and availability, output quality and volume, financial implications, biological and fixed assets, socio-economics, and product selling price. The biggest cause for disruption is operational capacity and scheduling, and the biggest effect is product selling price. Solving the loadshedding problem and preventing knock-on effects require collaboration between firms, industry, and government. The government needs to create an enabling environment: sound regulatory framework, incentives to invest in renewable energy, and access to low-cost capital. The industry then takes responsibility for disseminating government strategies to firms and providing feedback based on firm-level experience.