On 5 August 2022, the Department of Water Affairs published in the Government Gazette the revision of its national price strategy for water users with a comment period of 90 days. This extremely disturbing document puts great pressure on the irrigation farmers. The impact of this must be addressed seriously.
This document refers to public interest functions in terms of water resource activities that will be funded by fiscal support, although there are no specifications as to what these functions are. Food security is in the public interest. The severity of famine should not be taken lightly. This while the government applies its transformation policy to such an extent that food on the table becomes a luxury. The national objective is however food security.
Despite that, there is the proposal to implement a multi-year tariff to announce three years’ tariffs in advance. However, the predetermined rates do not pass the test of cost effectiveness and affordability, as the set rates do not consider all economic aspects. Furthermore, reference is made to the water quality management plan, although the department has already failed the residents due to the pollution of rivers, dams and natural resources that have not been properly addressed by the department.
In this respect, it is shocking that municipalities are the biggest wrongdoers.
The document refers to resource quality objectives. However, there is no real information or indication that the department will now finally protect the resources. The department undertakes to investigate water crimes, but there is already a serious situation in Limpopo where the extremely sensitive Sand River is being stripped of its sand base by illegal mining operations. This was already reported to the department in November 2021. However, all that is happening is a back-and-forth shift of responsibilities between the Department of Mineral Resources and the Department of Water Affairs. The operations have since increased in seriousness and to date there has been no real action from the department to address the crime against the water resources. The water users will also be held responsible for financing actions by the department for any violations in terms of the water act.
The resource-poor farmer is exempted from any of these charges for a period of 10 years without any conditions. In this regard, the Department of Water Affairs ignored its own regulation which was published in the Government Gazette on 31 October 2007. The document was drawn up exclusively for the purpose of the resource poor farmers and refers specifically to the help provided in terms of water need and the conditions that come with it. In terms of this, assistance must only be offered in the respect where the emerging farmer is unable to raise finance. Until recently, the government still paid out grants to upcoming farmers, which cost the taxpayer dearly. The pay-outs are in many cases much more than the profit that an ordinary farmer will generate in a year.
An economic regulator will be implemented although the role and objectives as well as responsibilities of this regulator are in no way specified in the document. The water user will be responsible for financing the regulator’s operating costs. The document refers to systems that are implemented that must be cost effective and do not place an unnecessary financial burden on the water users. Despite that, the irrigation sector will be responsible for various charges which include the water resource management, water resource infrastructure, the waste discharge mitigation, water research and the economic regulation charge which will be introduced gradually.
Also note that if there are plans for renewable energy through hydro energy, the developer will have to pay a further charge. The price structure is based on c/kWh of energy generated despite no consumption being linked to it. The levy applies where between 1 MW and 20 MW of power is generated. This rate is based on NERSA’s guidelines.
The price strategy index used for the increase in tariffs (especially in respect of raw water) is based on the average price of electricity as calculated by Eskom’s Annual Report.
This application is in no way acceptable, as Eskom’s tariffs are based on poor maintenance, the compensation and increase of criminal employees who are compensated for strikes and the funding of a corrupt system within Eskom. The possibility for a fair and just increase in tariffs has therefore already been taken off the table.
Taking the above into account, water is going to influence not only the irrigation farmer, but also the user. Food can no longer be produced affordably and available to the consumer if input costs are exploited by the government to fund the already non-functional corrupt departments.
