By Amy Grundling
The photo is provided by Weebly, 2020
Increase in Fuel Prices
After two months of fuel price reductions due to the decrease in global demand, June is expected to burden South Africans even further during the uncertain times. On Wednesday, 3 June 2020, 93 and 95 octane petrol increased by R1,18/ℓ; 0,05% diesel by 22c/ℓ; 0,005% diesel by 21c/ℓ; and Illuminating paraffin by 40c/ℓ. According to the Department of Mineral Resources and Energy, the prices of petrol will still be R2.63/ℓ lower than it was before the start of lockdown in March.
The fuel price is comprised out of four main elements namely, the General Fuel Levy (GFL), Road Accident Fund (RAF) Levy, Basis Fuel Price and retail margins. Before the lockdown, the combination of GFL and RAF levies was R5,84, which is approximately 50% of the fuel price. The new fuel prices that came into effect on 3 June, will only comprise out of a lower percentage levy, weighting 44%.
The main reason for the increase in fuel prices is that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other oil-producing countries agreed to reduce production by 10 million barrels per day. The reduction in production will decrease global oil supply with 10%. Fuel prices will remain volatile in the short-run but will stabilize in the long-run as global economies recover.
The Effect on Food Security
Despite diesel accounting, approximately 11% of the total grain production, the small increase in diesel prices will not affect food production drastically. Many of the grain producers are currently in harvest, therefore, they would have already bought fuel in bulk before the fuel price increase.
Even though the increase in diesel prices will not affect food production significantly, the increase will affect South Africa’s food security. Given that 70% of South Africa’s food being transported by road, the increase in fuel prices will have a negative effect on food inflation. It is estimated that 50% of South Africa’s population is food insecure. The majority of the food insecure population in the North West (36,6%), Northern Cape (32,3%), Mpumalanga (28,4%) and the Eastern Cape (25,4%).
Food insecurity has been amplified by the growing unemployment and poverty rates, caused by the economic instability triggered by the worldwide pandemic. The South African Social Security Agency (Sassa) has reported that the respondents who receive no income, has increased from 5,2% before lockdown to 15,4% and is expected to increase even further.
In conclusion, to ensure food security the government and the public sector should stimulate economic growth and job creation. In efforts to decrease the negative impact of the economic instability, the government can stabilize the volatile fuel prices in the short-run. Fuel prices can be stabilized by decreasing the GFL and RAF levies.
By Chikomborero Chiobvu
The COVID-19 pandemic has brought a lot of uncertainty among businesses and small agricultural companies. Due to lockdowns and stay at home orders around the world, many companies have been hit hard and are trying to see if they will survive this period and post lockdown. However, one thing that remains constant is people need to eat.
More people practice social distancing and avoid leaving their homes, causing the meal-kit subscriptions to be extremely popular. Meal-kit subscriptions are services that allow people to choose recipes online and have all the ingredients sent to their doors (Olito, 2020).
As many countries face complete lockdowns, companies such as Hello Fresh, and South Africa´s Ucook, have seen a surge in orders over the course of the lockdown and stay at home orders. Ucook saw its demand increase by 25% since the beginning of March (Richard Holmes, 2020).
Fresh produce makes part of the ingredients that are placed in these meal kits, thus making this a potential industry that small produce farmers could consider post lockdown. Life might not get back to what it was, the ability to adapt to these changes is what will set businesses apart. A potential venture that small produce farmers could take is partnering with meal-kit companies as well as start their meal-kit businesses in an attempt to diversify their product portfolio and ensure stable cash flow.
Restaurants could also follow the meal-kit trend by providing their popular dishes in meal kit form. This allows their consumers to enjoy their favorite meals in the comfort of their own homes. This business expansion also allows for a flow in the value chain as farmers can continue providing to their customers in the restaurant industry.
Olito, F., 2020. My HelloFresh meal delivery kit is a surprise game-changer during the coronavirus pandemic. Here are 6 reasons why. [Online]
Available at: https://www.insider.com/hellofresh-subscription-during-coronavirus-2020-4
[Accessed 26 April 2020].
Richard Holmes, 2020. UCOOK is on fire. [Online]
Available at: https://www.businesslive.co.za/fm/life/food/2020-04-16-ucook-is-on-fire/
[Accessed 26 April 2020].
Original article can be found on: https://www.linkedin.com/pulse/how-small-produce-farmers-could-adapt-pandemic-chikomborero-chiobvu/?trackingId=Db7wrNdUZSLp7XRPG%2BNzMg%3D%3D
If you have any interests or concerns, you can contact the writer via: email@example.com
By Adelene van Zyl
Source: Brian McKenna, 2020
The agricultural sector is sometimes forgotten in the South African economy since it only contributes approximately 3% to our GDP. However, in this time, the importance of agriculture is being amplified. Food shortages keep on increasing as citizens face retrenchment due to Covid-19 regulations. South Africans are dependent, now more than ever, on the agricultural sector to keep on providing food for a hungry nation.
Health Minister Zweli Mkhize said that the government currently tries to balance the Covid-19 spread and the food supply chain. Movement of food is still dangerous since it is labour intensive, however, human interaction must be limited to prevent the spread of the disease. Zweli also said that SASSA (South African Social Security Agency) is overburdened to provide food parcels in poor areas.
The agricultural sector is forced to keep on providing services, feed, food and commodities, while keeping their labour force clean and safe. Reidy (2020) stated that the demand for flour increased rapidly as consumers started stockpiling flour and other grain-based foods. Millers said that they are putting in all efforts to produce adequate flour, but they are concerned about border closures and lockdown regulations preventing them to transport flour to the necessary locations.
The biggest concern for the agricultural sector is currently logistics. This entails the labour force, human interactions, hygiene and movement of products through borders. Companies were forced to increase hygiene standards and precautionary measures, as well as to decrease the number of employees to limit human interaction. Economist Scott Irwin stated his concern for the virus contaminating food plants. Not only will this be difficult to measure, but it will spread the virus much faster than what the country can handle. Professor Gary Schnitkey said that this is only a matter of time until a food plant gets infected and that our concern should be on how it will be handled when it happens.
The grain and oilseeds trade body COCERAL, the vegetable oil and protein meal association FEDIOL and the European Compound Feed Manufacturers' Federation (FEFAC) issued a joint statement on 17 March 2020 regarding EU restrictions on agricultural commodities. They said that the risk for food shortages will increase if current restrictions persist, which might prevent the population to access regular food supplies. They also stated that they are taking all actions required to avoid disruptions in the food supply chains and to ensure that all parties will receive the raw agricultural products and ingredients they need. South Africa also has special regulations for the transport of agricultural products. You can read through these regulations and updates on GrainSA’s website: https://www.grainsa.co.za/pages/news--events/events/covid-19-updates.
South Africans can be assured that our agricultural sector will be able to produce enough food, however, necessary actions need to take place to improve the efficiency of the transportation of agricultural products. Any food commodity that can be supplied is extremely important now, however, the most important commodity during this time is flour. Milling operations has to keep on receiving wheat from farmers and deliver flour to bakeries for the production of bread, pasta and other grain-based products.
Reidy, S., Lyddon, C. & McKee, D., 2020. COVID-19 impacts agriculture from farm to fork. [Online]
Available at: https://www.world-grain.com/articles/13479-covid-19-impacts-agriculture-from-farm-to-fork
[Accessed 20 04 2020].
By Adelene van Zyl and Renée Grundling
Oil has been the most important source of energy in the world since the 1950’s. According to UK Oil and Gas PLC, oil primarily supplies energy to factories, heat homes and produce fuels of all kinds. Modern agriculture is largely automized or semi-automized and is dependent on electricity and fuel to maintain large production machinery and implements.
The conflict between countries regarding oil supply and demand is not a new problem. A result of this conflict led to the creation of the Organization of Petroleum Export Countries (OPEC) in 1960 with its first five members being Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. 
A shift came in 1973 when oil was used as a political weapon in the Yom Kippur War. An embargo was set between Israel and the Arab States of Egypt, Syria and Jordan, motivated by the United States of America (USA), to inflate oil prices, effective immediately. This influenced South Africa in 1974 as the first Oil Crisis when oil production slowed down due to oil shortages worldwide, leading South Africa to re-invest in coal derived fuel by companies such as Sasol.
In 1979 an Anti-Western policy was set up by Islamic rule in Iran which caused the second Oil Crisis. This led to an eight-year war between Iran and Iraq which caused non-OPEC countries to produce more oil than OPEC countries. In the 1980’s, non-OPEC countries had a 70% market share, upon which the USA increased oil production tremendously. Conflict arose primarily over a waterway between the Persian Gulf and Oman, called Strait of Hormuz, leading to the Arabic Sea. This waterway was and still is the only way of transporting oil to and from the Middle East.
In 1991 the USA intervened in the Middle East and established military defence bases and signing defence agreements with the Gulf monarchies. This intervention of peace lasted until 2001 when the USA decided to decrease oil consumption from the Middle East.
Conflict between the United States of America and Iran grew further and caused oil prices to spike in 2003. This conflict decreased production and gave China the opportunity to increase oil supply in 2006 and 2007. Steady oil production continued to 2014, until Saudi Arabia manipulated the market in order to prevent the USA from supplying more oil, causing prices to drop. Recent conflicts between the USA and Iran stems from political skirmishes involving nuclear device productions, deals and sanctions, all of which leads to rumours regarding warfare between these two countries and fluctuating oil prices. 
How might this influence South Africa?
Due to the instability of geo-politics and variables regarding oil supply and demand, it is difficult to determine exactly what will happen and how it might influence South Africa. Currently, South Africa is mainly dependent on coal produced energy and amounts to 59% of the country’s energy consumption. Crude oil and gas only amount to 16% and 3% respectively. The main concern for South African electricity is not oil fluctuations, but rather excessive coal consumption due to this
resource being depleted at an increasing rate. South Africa’s fuel prices, however, is very much dependant on the Rand/US Dollar exchange rate and international crude oil prices.
South Africa should therefore turn its focus to biogas and biofuels. These are renewable energy sources that is produced by anaerobic digestion of organic materials and used in the agricultural sector, minimizing costs of the farmer by substituting natural gas. Biogas has added benefits such as reducing exhaust emission pollution and one’s carbon footprint  . Biofuel is a product of biogas when CO 2 is removed to increase the energy content and allow storage under high pressure  . Biofuel can be biodiesel or bioethanol, both of which is made from different biomass and has different products and implements in which it can be used.
Bioethanol is a biofuel that can be used in engines that run on petrol and is made from fermented sugar.  This type of biofuel is commonly produced using agricultural wastes such as corn straw and sugarcane bagasse. Biodiesel, as the name implies, is a diesel substitute and is produced using a process called “transesterification”. This type of fuel is produced from various fats and oils from feedstocks such as canola and soybean.  Farmers can therefore literally grow the fuel for their farm machinery and implements  .
Biogas and biofuels will most likely become a reality much sooner than what we may think. Transitions from electricity and fossil fuels to natural gas and biogas will enable the user to slowly become independent from energy and crude oil providers such as Eskom and imports from the Middle East. The agricultural sector, as an added benefit, will not only be able to use their home-grown fuel, but can also create a lucrative income for themselves.
[ 1 ] Meredith, S., 2020. Energy infrastructure attacks are ‘probable’: Oil traders fear supply disruptions
in the Middle East. [Online]
Available at: https://www.cnbc.com/2020/01/07/us-iran-tensions-oil-traders-fear-supply-
[Accessed 3 Febuary 2020].
[ 2 ] Parvaneh, D., 2019. Why The US And Iran Are Fighting Over This Tiny Waterway. [Online]
Available at: https://www.vox.com/videos/2019/8/22/20828858/us-iran-hormuz-oil-tanker
[Accessed 1 Febuary 2020].
[ 3 ]Ratshomo, K., 2018. South African Energy Report, Pretoria: Department of Energy.
[ 4 ] Farm Energy, 2019. Introduction to Biodiesel. [Online]
Available at: https://farm-energy.extension.org/introduction-to-biodiesel/
[Accessed 1 Febuary 2020].
[ 5 ] Farm Energy, 2019. Warm Climate Feedstocks for Biodiesel. [Online]
Available at: https://farm-energy.extension.org/warm-climate-feedstocks-for-biodiesel/
[Accessed 1 Febuary 2020].
[ 6 ] Sarkar, N., Ghosh, S.K., Bannerjee, S. and Aikat, K., 2012. Bioethanol production from agricultural
wastes: an overview. Renewable energy, 37(1), pp.19-27.
By Amy Grundling
A business plan is a road-map that indicates the necessary steps that must be implemented to ensure future successes. The key to an efficient business plan is in the quality of the outlay, i.e. no spelling mistakes, correct grammar usage, appropriate language use and the structure etc.
Important subjects need to be addressed in a business plan. This includes a description of the business, a strategic plan, an operational plan, a market analysis, a financial plan and a risk analysis. When writing a business plan, it is important to consider who your target audience is. The target audience will be influenced by the reason the business plan is written.
A few reasons include:
This is an example of a business plan layout and what should be included in it:
1. Cover Page
Full name of the business
Physical and postal address
Telephone and fax numbers, email address
Date of plan
2. Table of Content
List of headings & page numbers
Graphs, figure and tables
3. Executive Summary
Purpose of the Business Plan
4. Description of the farming Business
5. Strategic Plan
Vision, Mission & Goals
-Scan the Environment:
• Close competitors
-Industry and Market Analysis:
• Market Share
• Size of the industry
• Critical Issues
• Social Environment
• SWOT analysis: Strengths, Weaknesses, Opportunities and Threats
6. Operational & Product Plan
(Ownership and organisational structure)
Farm map and land use
Facilities and land use
Production choice and processes
Production and operations schedule
Value chain analysis
7. Marketing Plan
Describe the six P’s:
8. Organisation and Staffing Plan
Sourcing of staff
Structure & Responsibilities
Brief job description
Short CV’S of senior management (in annexure)
9. Financial Plan
Identify source of funding
Evaluation of alternatives
10. Risk Planning
Identification of risk:
Risk mitigation strategies
Structured Risk Analysis
Sensitive analysis on Pricing and Production
11. Implementation and Monitoring
Develop an implementation plan and to-do list
Responsibilities and timeline
Establishing monitoring and control checkpoints
Feedback and evaluations dates
12.List of References
By Amy Grundling
The Carbon Tax Act came into effect from 1 June 2019, aiming to decrease South Africa’s carbon emissions. The Carbon Tax Act will contribute towards achieving the objectives of the National Climate Change Response Policy of 2011 (NCCRP) and South Africa’s commitment to the Paris Agreement.
The NCCRP provides the general policy structure for facilitating the transition to a low carbon and climate resilient economy. In order to achieve these objectives, the South African government uses Carbon Tax to change the market behaviour of the consumers and producers. As indicated in the Explanatory Memorandum on the Carbon Tax Bill of 2018, an emissions trading system (ETS) is currently unsuitable due to the dominance of the carbon emissions by only a few oligopolistic companies. Tax is also a financial instrument that is much easier to administer and regulate.
A headline carbon tax of R120 will be levied on fuel combustion, industrial processes and fugitive emissions, for every tons CO2 emission above the allowable threshold. However, during the first phase a relatively low carbon tax ranging between R6 and R48 per tons of CO2 will be allocated. The low carbon tax rate the result of the following allowances:
The low carbon tax rate and the exemption of the electricity sector allows companies to transition to cleaner technology before the second phase starts. From 1 January 2023, the second phase of carbon taxation will come into effect, by increasing the headline carbon tax rate of R120 annually by consumer price inflation (CPI).
The Agriculture Forestry and Other Land Use (AFOLU) sectors are also exempt from the first implementation phase, due to measurement difficulties. Therefore, carbon tax will only affect the agriculture sector indirectly through higher fuel prices. The increased fuel prices will have a great effect on our food prices due to the long distances agricultural products usually needs to travel in the value chain. Not only will the increased food prices influence South Africa’s food security but also farmers profit margins due to increased input cost.
Decreasing carbon emissions is a priority that all countries should partake in. However, the South African government needs to administer and allocate the extra carbon tax revenue wisely. The carbon tax revenue should be reinvested to promote and excel a greener economy that will benefit all South Africans.