THE 244 percent electricity tariff increment in one year as proposed by ZESCO will be disastrous to the agriculture sector in Zambia as most farmers fall into the MD1 and MD2 tariff capacity, says the Zambia National Farmers Union (ZNFU).
According to Zesco’s proposed tariff structure, MD 1 capacity is for those who consume electricity between 16 and 300 kva a month while MD 2 capacity are for those who consume between 301 and 2,000 kva per month.
During the submission to the Energy Regulation Board (ERB) on the revised electricity tariffs by Zesco, ZNFU said if ERB granted ZESCO’s proposed 244 percent increase on Maximum Demand (MD) fixed monthly charge, some farmers’ electricity bill would hit K683, 200 a month.
ZNFU representative, Humphrey Katotoka, said the proposed tariff was far too high for farmers to remain viable, especially with falling commodity prices on the regional and global market.
“The 244 percent increase in the MD monthly fixed electricity charges proposed by ZESCO will be a big jump on the farmers’ bill which is way above the marginal increase in the price of agricultural commodities such as maize, wheat, soya and chickens etc. which are below 15 percent,” he said.
Mr Katotoka said ZNFU was aware Zesco had been the process of migrating to cost reflective tariffs for some time now.
“While the union supports the need to increase tariffs in principle, the proposed increments by ZESCO are just too high to be implemented at once as can be seen on the table below,” he said.
He said the electricity tariffs in Zambia when compared to the region were indeed low but that should not be the only impetus to raise tariffs because hydro power generation was a cheaper mode of power. ZNFU urged ERB to support Government in ensuring that the cost of doing business in the agriculture sector was kept at a bare minimum in order to achieve the country’s long-term objective of diversifying the economy from mining.
ZNFU further submitted that the tariff increment should be phased into four equal parts over a period of two years in order to allow commodity prices to catch up and give farmers a chance to prepare for them.