Farming associations have raised concern about the impact of the increase in diesel price on farmers, which reached its highest level since August 2024 last week following the increase of R1 per litre to R20.34/l.
Ntathu Tlale, South African Farmers Development Association (SAFDA) Agricultural Economic Advisor, said Monday that the increase in diesel prices has significant financial and operational impacts on sugarcane farmers, particularly concerning production costs, profitability, and overall farm operations.
“The rise in diesel prices has a direct effect on production costs associated with land preparation and planting. Diesel is essential for tasks such as ploughing, harrowing, and planting, and higher fuel costs make these processes more expensive,” he said.
Tlale added that in irrigated areas where farmers rely on diesel-powered pumps for irrigation, operating costs will also rise.
“Other activities, such as the application of fertilizers and chemicals, become costlier as tractors and sprayers consume diesel, further increasing the expenses linked to applying these essential products.”
Tlale said that this price increase significantly affects farmers who use mechanised harvesting methods.
“Those employing mechanical harvesters will face higher operational expenses, as the cost of running machinery directly correlates with diesel prices,” he said.
“Furthermore, transporting sugarcane to mills is impacted; with higher diesel prices, the cost of moving cane to processing facilities increases, which can lower the net income for farmers.”
Tlale added that since diesel constitutes a large portion of production costs, farmers may struggle to maintain profitability unless cane prices rise accordingly.
“Small-scale sugarcane farmers, who often operate on tight margins, are especially vulnerable to these diesel price hikes. They typically lack the financial buffer needed to absorb increased costs, which could lead to reduced production or even exiting the industry altogether.”
Tlale said that if diesel prices remain high, some farmers may choose to reduce the area planted with sugarcane or switch to less fuel-intensive crops.
“This change could result in a decrease in sugarcane supply, ultimately affecting the entire supply chain, including mills and sugar production.”
Another economist at SAFDA, Nkosinathi Phakathi, said that the increase in diesel will have a major impact on farmers.
“An increase in diesel price can have several significant impacts affecting both their production costs and overall profitability (i.e., higher fuel costs for machinery, increased haulage costs, rising input costs (chemicals and fertilizers), impact on irrigation costs where sugarcane farming relies on diesel-powered irrigation systems; it can increase the water extraction costs, making irrigation more expensive,” he said.
Phakathi added that an increase in diesel prices can create a challenging environment for cane farmers, affecting their operational costs, profitability, and long-term sustainability.
“All farming operations depend on diesel. Land preparation, planting, irrigation, crop/ratoon maintenance, harvesting, haulage/transport, and post-harvesting processing are all diesel-dependent. Land preparation rates would be higher. Irrigation costs, cane shipment, transport costs, and input costs (fertiliser and chemicals) are all dependent on diesel and would be higher,” Phakathi said.
Efficient Group chief economist, Dawie Roodt, said that the increase in diesel would have an impact on the agriculture industry.
“The reason is that the agriculture industry is dependent on diesel. The other issue is that electricity prices went up recently, so this, coupled together, would impact the agriculture industry,” he said.
Roodt added that the agriculture industry is in the spotlight for political reasons.
“Political reasons and the diesel price increase will definitely impact the agriculture industry. The good news is that the diesel price is not as high as it was a year ago, so we should be less concerned.”
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