The expected increase in the price of petrol at 74 cents a litre and diesel around 91 cents a litre, will have a severe impact on the cash flow of farmers.
Fuel and diesel are commonly used for tillage, harvesting, machinery and transportation, making them a critical component for both small-scale and commercial farmers, as well as the entire agricultural value chain.
From a farm producer level, we are currently experiencing a late season whereby farmers are still using a lot of diesel. This follows the Budget Speech announcement that the fuel levy will increase by 30c/litre for diesel from 1 April 2019, which adds to the woes of producers.
Furthermore, given that 70% of South Africa’s food is transported by road, the increase in the diesel price will have a negative impact on food inflation, and the disposable income of consumers who are already struggling to make ends meet.
Dawie Maree, Head of Information and Marketing at FNB Agribusiness