ALERT AGRICULTURE, AQUACULTURE & FISHING SECTOR
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21 APRIL 2021
AGRICULTURE,
AQUACULTURE &
FISHING SECTOR
ALERT
IN THIS
The agricultural sector’s lifeblood –
ISSUE protecting and preserving South Africa’s
scarce water resources
South Africa’s reality as a water scarce country is a well-
known fact, with water scarcity being exacerbated by poor
water resource management and licensing, lacking water
infrastructure, insufficient maintenance and investment, and,
without question, climate change. Climate change and its
impact on water is linked not only to increasing and more
severe periods of drought, but also erratic and severe weather
patterns which have a knock-on effect on water availability.
Given the extensive water needs of produce farmers, the
agricultural sector is and will be one of the hardest hit by the
effects of climate change.
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AGRICULTURE,
AQUACULTURE &
FISHING SECTOR
The agricultural sector’s lifeblood
– protecting and preserving
South Africa’s scarce water
resources
South Africa’s reality as a water scarce The financial ramifications of water
country is a well-known fact, with scarcity for farmers, and of drought in
The Paris Agreement water scarcity being exacerbated by particular, have recently been impacted by
has required countries poor water resource management and the repeal of the declaration of drought
like South Africa to licensing, lacking water infrastructure, as a national disaster in July 2020. The
commit to practical insufficient maintenance and move resulted in an outcry from prominent
investment, and, without question, agricultural organisations who questioned
measures to combat climate change. Climate change its justification given the impact drought
climate change and and its impact on water is linked not has had on commercial agriculture and
strategies to adapt to only to increasing and more severe the persistence of droughts in parts of
periods of drought, but also erratic and the country. Following the repeal, farmers
its effects.
severe weather patterns which have a must mitigate the effects of drought
knock-on effect on water availability. themselves without any financial support
Given the extensive water needs of from the disaster relief of R139 million that
produce farmers, the agricultural sector was previously provided by government
is and will be one of the hardest hit by which, even when it was available, was
the effects of climate change. argued to be insufficient.
To mitigate these detrimental impacts, Since the “un-declaration”, water shortages
South Africa has adopted a variety of have remained a reoccurring theme
measures that aim to cater for both the in 2021, with water scarcity in the Nelson
short and long term. There is, for instance, Mandela Bay region of the Eastern Cape
its commitment to nationally determined considered by experts to be in “dire straits”.
contributions under the Paris Agreement, A total of eight dams in the region are less
which set the goal of keeping global than 10% full and the Kouga Dam, one of
average temperature increases less than the biggest facilities serving the region
2°C above pre-industrial levels by 2050. generally and particularly farmers, is only
The Paris Agreement has required countries 5% full and close to running completely
like South Africa to commit to practical dry. In trying to endure the recent and
measures to combat climate change and
strategies to adapt to its effects.
CDH’s Agriculture, Aquaculture
& Fishing Sector Specialists
provide practical and commercial advice to help our
clients in this sector achieve their business objectives,
protect existing interests and maximise opportunities.
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2 | AGRICULTURE, AQUACULTURE & FISHING SECTOR ALERT 21 April 2021
AGRICULTURE,
AQUACULTURE &
FISHING SECTOR
The agricultural sector’s lifeblood
– protecting and preserving
South Africa’s scarce water
resources...continued
ongoing drought, farmers who are ∞ Improved and effective policies
dependent on the Kouga Dam for irrigation
Historically and to date, have resorted to leasing additional land
Historically and to date, the
the implementation of to plant fresh produce where water is
implementation of water security
policies in South Africa has remained
water security policies more abundant, or trucking in water to
a serious challenge. What is needed
their farms, with both options incurring
in South Africa has are policies that, in fact, improve
expenditure for the foreseeable future.
remained a serious The impact this will have on the price of
management and maintenance of
existing infrastructure and address
challenge. produce and the consequent burden on
other water related issues faced by the
consumers cannot be ignored.
country broadly, and the agricultural
In the context of these challenges, and sector specifically.
South Africa’s broader water scarcity
The latest proposed solution takes the
issues, the task of finding swift and
form of the National Water Security
effective solutions is essential. However,
Framework, which aims to cover
while it is important to continue
what is required to holistically protect
prioritising reaching our climate change
South Africa’s scarce water resources,
commitments such as those under the
identifying the underlying challenges
Paris Agreement, and encouraging water
and highlighting recommendations for
saving practices, these actions will not be
their redress. The framework aims to
sufficient unless accompanied by effective
guide all water-related policies across
measures to address challenges relating to
the governance system; strengthen
unsuccessful water policies; lacking water
implementation and encourage
infrastructure; cumbersome licensing
holistic oversight by government; and
processes; and financing gaps.
provide cross-sectoral water security
through comprehensive stakeholder
engagement and collaboration.
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3 | AGRICULTURE, AQUACULTURE & FISHING SECTOR ALERT 21 April 2021
AGRICULTURE,
AQUACULTURE &
FISHING SECTOR
The agricultural sector’s lifeblood
– protecting and preserving
South Africa’s scarce water
resources...continued
∞ Infrastructure development which water for irrigation and other water
seek to address the shortcomings requirements. In his 2021 State
Through Operation and gaps in South Africa’s existing of the Nation Address, President
Vulindlela, the framework Ramaphosa highlighted the potential
government aims to Given the high costs associated with
of Operation Vulindlela to reform
South Africa’s water sector. Through
ensure that water use maintaining and upgrading South
Operation Vulindlela, the government
license applications Africa’s water infrastructure and
aims to ensure that water use license
developing new infrastructure, the
are finalised within a applications are finalised within a
lack of sufficient financial resources
revised timeframe of presents a major hurdle. There appears
revised timeframe of 90 days, which
should dramatically improve the
90 days. to be, however, a determined effort
current waiting period and redress the
from government to redress such
backlog of applications.
financing gaps in the form of the
Investment Fund. The fund aims to From the above it is evident that the
invest R100 billion in infrastructure approach to redressing South Africa’s
over the next decade, which financing infrastructure deficiencies needs to be
will be directed towards projects that multifaceted to cater for existing issues
have a positive social impact including and to facilitate new development. This will
improving access to water. require an all-inclusive and collaborative
∞ Improved legislative timeframes and approach of all stakeholders, such as
licensing administration farmers and catchment management
agencies tasked with managing
The delay to processing and issuing water catchment areas, to holistically
water authorisations has presented protect South Africa’s scarce water
a key challenge, especially to resources which are the lifeblood of the
farmers who require authorisation agricultural sector.
to abstract ground, dam or river
Laura Wilson and Margo-Ann Werner
4 | AGRICULTURE, AQUACULTURE & FISHING SECTOR ALERT 21 April 2021
OUR TEAM
For more information about our Agriculture, Aquaculture & Fishing Sector sector and services in South Africa and Kenya,
please contact:
André de Lange Andries Le Grange Verushca Pillay
Sector Head Director Director
Director Competition Corporate & Commercial
Corporate & Commercial T +27 (0)11 562 1092 T +27 (0)11 562 1800
T +27 (0)21 405 6165 E andries.legrange@cdhlegal.com E verushca.pillay@cdhlegal.com
E andre.delange@cdhlegal.com
Emil Brincker Gillian Lumb Lucinde Rhoodie
National Practice Head Director Director
Director Employment Dispute Resolution
Tax & Exchange Control T +27 (0)21 481 6315 T +27 (0)21 405 6080
T +27 (0)11 562 1063 E gillian.lumb@cdhlegal.com E lucinde.rhoodie@cdhlegal.com
E emil.brincker@cdhlegal.com
Roy Barendse Richard Marcus Belinda Scriba
Executive Consultant Director Director
Dispute Resolution Dispute Resolution Dispute Resolution
T +27 (0)21 405 6177 T +27 (0)21 481 6396 T +27 (0)21 405 6139
E roy.barendse@cdhlegal.com E richard.marcus@cdhlegal.com E belinda.scriba@cdhlegal.com
Daniël Fÿfer Burton Meyer Roux van der Merwe
Director Director Director
Real Estate Dispute Resolution Corporate & Commercial
T +27 (0)21 405 6084 T +27 (0)11 562 1056 T +27 (0)11 562 1199
E daniel.fyfer@cdhlegal.com E burton.meyer@cdhlegal.com E roux.vandermerwe@cdhlegal.com
Tobie Jordaan Susan Meyer Clarice Wambua
Sector Head Director Partner | Kenya
Director Competition T +254 731 086 649
Business Rescue, Restructuring T +27 (0)21 481 6469 +254 204 409 918
& Insolvency E susan.meyer@cdhlegal.com +254 710 560 114
T +27 (0)11 562 1356 E clarice.wambua@cdhlegal.com
E tobie.jordaan@cdhlegal.com
Hugo Pienaar Charl Williams
Johan Latsky Director Director
Executive Consultant Employment Corporate & Commercial
Corporate & Commercial T +27 (0)11 562 1350 T +27 (0)21 405 6037
T +27 (0)11 562 1149 E hugo.pienaar@cdhlegal.com E charl.williams@cdhlegal.com
E johan.latsky@cdhlegal.com
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PLEASE NOTE
This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought
in relation to any particular situation. Cliffe Dekker Hofmeyr will accept no responsibility for any actions taken or not taken on the basis of this publication.
JOHANNESBURG
1 Protea Place, Sandton, Johannesburg, 2196. Private Bag X40, Benmore, 2010, South Africa. Dx 154 Randburg and Dx 42 Johannesburg.
T +27 (0)11 562 1000 F +27 (0)11 562 1111 E jhb@cdhlegal.com
CAPE TOWN
11 Buitengracht Street, Cape Town, 8001. PO Box 695, Cape Town, 8000, South Africa. Dx 5 Cape Town.
T +27 (0)21 481 6300 F +27 (0)21 481 6388 E ctn@cdhlegal.com
NAIROBI
CVS Plaza, Lenana Road, Nairobi, Kenya. PO Box 22602-00505, Nairobi, Kenya.
T +254 731 086 649 | +254 204 409 918 | +254 710 560 114 E cdhkenya@cdhlegal.com
STELLENBOSCH
14 Louw Street, Stellenbosch Central, Stellenbosch, 7600.
T +27 (0)21 481 6400 E cdhstellenbosch@cdhlegal.com
©2021 9945/APR
AGRI SECTOR | cliffedekkerhofmeyr.com
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