Mbali Nwoko, award-winning agripreneur and chief executive officer of Green Terrace, says the rising price of fuel directly impacts her business’s transportation expenses. Green Terrace specialises in high-value vegetable crops such as green beans, baby marrows, green peppers and spinach.
“Fuel prices do affect our business as we outsource our logistics when we have to deliver our produce to clients. And therefore, we find our logistics bill increasing twice or three times a year based on the rate at which fuel prices rise per quarter.”
In addition to that, Nwoko says they are faced with more trouble as the tractor at their farm is not working. Putting more financial strain on the business, they now have to insource a tractor from a nearby farmer who does all their land preparation. Since they cannot bypass the price of fuel, Nwoko added that they are finding new ways of moving around the problem.
“High fuel costs have a big impact on commercial and small-scale farmers as it puts a damper on their profitability.”
“The logistics bill for the transportation of our produce does affect profits and therefore we carefully plan routes to maximize on transport to clients. And we prefer to supply clients that are much closer to each other using one load.”
Regenerative farmer Danie Slabbert says he is still affected by the rise in fuel prices, although his farming methods require fewer inputs.
“Obviously it’s got a huge impact, because it’s one of our direct input costs, so every time there’s an increase in fuel it’s a direct cut out of your salary as the farmer. I am in regenerative agriculture, so my inputs are less, but it’s still an effect,” says Slabbert.
With the upcoming elections, Slabbert hopes to see help from the government’s side, through the implementation of strategies that will carry farmers through this predicament. He says that as the farmers are affected, consumers will see the change of prices in stores.
“The problem is that surely there are some farmers that won’t make it because of this issue. So, I hope there will be some influence in the future so that they can help the farmers, so that it will have the same positive effect to the consumer. We hope there is a whole turnaround for everybody. It’s not just the farmers, it’s the whole South Africa.”
Agri SA’s chair of the Centre for Excellence: Economics and Trade, Nicol Jansen, says as these high fuel prices continue it puts pressure on both new and commercial farmers.
“High fuel costs have a big impact on commercial and small-scale farmers as it puts a damper on their profitability. It is a cost they cannot take to the consumer. They have to suck it up.”
As a possible solution to overcome the current fuel situation farmers can look at new farming techniques. But Jansen says implementing new farming practices is not easy and will bring new challenges.