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. CLICK HERE For more insight into our expertise and services
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. CLICK HERE TO READ OUR BROCHURE. 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. CDH’S COVID-19 RESOURCE HUB Click here for more information 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 BBBEE STATUS: LEVEL TWO CONTRIBUTOR Our BBBEE verification is one of several components of our transformation strategy and we continue to seek ways of improving it in a meaningful manner. 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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