AgriSA calls on government to increase diesel rebate scheme

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 on is not extended.

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According to AgriSA, 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 in a statement released on Tuesday.

The federation 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.