Africa Business Briefs

Farmers hurt by power price hikes
MULDERSDRIFT – Price hikes granted to South Africa power utility Eskom will cost the country’s agriculture sector more than R300 million and threaten food security, a key farmers’ group said. South Africa’s power regulator earlier this year granted state-owned Eskom annual tariff increases of around 25 per cent for three years, starting with the 2010-11 financial year, to help it amass the funds it needs to build new power plants and ease a supply shortage in Africa’s biggest economy.
‘The agricultural sector had been confronted over the past few years with drastic price increases of intermediate inputs, such as fertiliser and fuel, and it appears that electricity will now assume this role,’ Agri SA said in its annual report. ‘Further tariff increases would have an extremely negative impact on food security,’ it added.

New limit on EU farm subsidiesBRUSSELS – The level of European Union (EU) subsidies paid direct to individual farmers should be capped at an unspecified level, the bloc’s executive has said in a draft paper on reform of EU’s farm policy from 2013. Direct subsidies should give farmers a basic level of income support, but should also include mandatory requirements on environmental protection, the paper due to be published by the European Commission on November 17, said. Existing market management measures such as export subsidies should be kept as a “safety net”, and the use of public intervention could be extended, while new tools to combat market volatility are needed, such as insurance and mutual funds, the paper added. The Commission said it would also examine options for phasing out EU sugar production quotas “at a date to be defined” as part of the reform. But the paper contained no details on the future size of the common agricultural policy (CAP) budget, which currently consumes about 55 billion euros of the bloc’s annual budget.SA blacks not using farms awarded by govtMULDERSDRIFT – South Africa’s Land Reform Minister Gugile Nkwinti last week said very few of the farms transferred to blacks under the country’s land reforms were productive. South Africa’s land reform programme has caused unease and slowed investment in the agricultural sector as white commercial farmers remain unsure of whether to reinvest in farms under claim by black farmers. “[The] government didn’t have a strategy to ensure that the land was productive, if there was a strategy it was not backed with proper resources,” Nkwinti told a farmers’ conference.