AgriSA calls on government to increase diesel rebate scheme

Says fuel price spike threatens the country’s food security.
Read: Shutterstock

Agricultural federation AgriSA is urging government to increase the diesel rebate scheme to help shield the sector from frequent fuel price hikes.

The federation’s call comes in the wake of an anticipated major hike in fuel prices for June on Wednesday, with an estimated increase of up to R4 per litre if the National Treasury’s R1.50 general fuel levy interim relief measure is not extended.

Read: Petrol price horror

“An increase of this magnitude will have serious knock-on effects for food security in South Africa and it is vital that government consider all viable options to buffer the cost pressures that impact food prices,” AgriSA said in a statement released on Tuesday.

According to the federation, the extended rebate can be achieved by increasing the percentage of producer fuel, which qualifies for both the Road Accident Fund (RAF) and fuel levy, or by increasing the percentage of relief from the fuel levy.

“The need for relief to farmers is especially urgent in that there is high demand for fuel in many parts of the sector as it is still harvesting season for a number of commodities including summer grains and fruits like citrus,” it adds.

AgriSA says the hike in fuel prices make (agricultural) commodities vulnerable to current increases and points to the need for a sustainable intervention that will mitigate food price increases in the upcoming months.

“In the agricultural sector, a certain percentage of producers’ fuel qualifies for this rebate, and of that portion 100% is exempt from the RAF levy, and 40% from the fuel levy,” explains AgriSA.

It adds that this intervention would be targeted and strategic, citing the chain effect of fuel price increases on the price of food and food security.

“The consequences of rising fuel prices have already been acutely felt in the agricultural sector, where fuel is one of several input costs that have been rising sharply, placing significant pressure on a number of agricultural commodity sectors.”

Kulani Siweya, chief economist at AgriSA, says an extended diesel rebate scheme will go a long way in ensuring that farmers retain their capacity to feed the nation.

Nondumiso Lehutso is a Moneyweb intern.

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us: