‘Agricultural sector will take months to reap fuel cut benefits’

Farmers Associations say it will take months for the agricultural industry to reap the benefits of fuel price decreases.

Farmers have battled to stay afloat in light of continuous fuel price increases. Fuel prices decreased significantly with petrol prices decreasing by R2.06c per litre, while diesel prices decreased by over R2.60c per litre, following the appreciation of the Rand against the US Dollar, which led to a lower contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin.

One of the country’s major economic drivers has begun to feel some relief following fuel price decreases.
However, the benefits of this relief are likely to only be felt months from now.

Thandeka Mbassa from African Farmers Association Of South Africa says, “The fuel decrease is welcome because as you would appreciate, it affects the whole value chain, irrespective of the commodity that we are dealing with. But because we have had so many back -to-back increases in fuel, we are not likely to feel the benefits right now. Economists are anticipating that maybe after a few months we will even begin to see positive impact on inflation.”

However, for some, the reduction of fuel prices came a bit too late into the planting season.

“The sad part about it is that farmers have mostly planted their crops and most of the fuel is being used and spent. So, that’s been expensive fuel. So, going forward its now cheaper. So, it’s of course helpful, especially to those farmers that are still working the land, that haven’t planted yet and they are still busy with their field work. That’s good for them but those that have already spent the money have spent the money,” says Grain SA’s Derick Matthews.

With the year having started positively, farmers remain optimistic that they will have a highly productive year.

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Source: SABC News (sabcnews.com)