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Dynamic Research Journals (DRJ)

Journal of Economics and Finance (DRJ-JEF)


Volume 2 ~ Issue 6 (June, 2017) pp: 20-28
ISSN (Online); 2520-7490
www.dynamicresearchjournals.org

The Effect of Increased Electricity Tariffs on Citrus


Production in Beitbridge, Zimbabwe
1
Henry Munashe Jaji & 2Wellington Garikai Bonga
1
jajihenry6@gmail.com, 2sirwellas@gmail.com

Abstract: Zimbabwe, just like many other developing nations has its economic growth path mapped mainly by the
agricultural sector. The agricultural sector has been labelled the backborne of many economies, and countries are re-
prioritizing agriculture and food security as paramount to human development. The sector provides food to mankind
and raw materials to other sectors of the economy and hence promotes industrialisation. In the last decade, a fall in
agricultural production in Zimbabwe has seen the country transitioning from being recognised as the bread basket of
the Southern African region, to a bread bowl case. Deterioration of the agricultural sector implies backward
development, especially for developing nations like Zimbabwe. Citrus production is one of the agricultural activities
practised in Zimbabwe, with Beitbridge region as one of the success stories in history. The study seeks to analyse the
effects of increased electricity tariffs on citrus production in Beitbridge, Zimbabwe. Data on citrus production was
collected from 7 big citrus farms located in the Beitbridge area using face to face questionnaire method. By employing
an investigative and empirical approach, the research results revealed that the increase in electricity tariffs by the
Zimbabwe Electricity Supply Authority (ZESA) adversely affected citrus production in the area under study due to
increased total production costs.
Keywords: Agricultural Sector, Citrus Production, Electricity Tariffs, Cost of Production, Beitbridge
JEL Codes: C83, C93, D23, D24, D61, E23, F41, F62, H21, L52, N50, N57, Q01, Q02, Q12, Q15.

I. INTRODUCTION
Agriculture has for a long time been referred to as the backbone of the Zimbabwean economy and will under
normal conditions continue to be so in the foreseeable future. Many countries are revisiting their agricultural strategies,
while regional bodies are also crafting new agricultural policies (Matondi and Chikulo, 2012). Although when
producing at full capacity agriculture contributes only 11-14 percent of GDP, the sector has potential to provide
employment for about 50% of the countrys population, about 60 percent of all raw materials for the industry and about
40 percent of the countrys exports are of agricultural origin. Albani and Palentini (2016), indicated as for Zimbabwe
that agriculture provides livelihoods for about 70% of the population and accounts for 23% of formal employment.
The global markets for horticultural products remain attractive and Zimbabwes horticultural sector has the
potential to develop a strong global competitive position, thereby providing substantial social and economic benefits to
the country (SNV, 2014). In different parts of the country, different agricultural activities are practised but in this paper
emphasis is on citrus farmers along Umzingwane and Limpopo Rivers in the Beitbridge district. Citrus are one of the
most common fruits consumed on a regular basis by people globally (Zarini, Yaghoubi and Akram, 2013). Citrus fruits
grown in Zimbabwe include grapefruits, lemons, naartijies, nectarines and oranges. Citrus can be consumed as fresh
fruit or processed for juice making, juice concentrates and dried fruit production (Macaskill, 2016).
Beitbridge is predominately an arid ranching area, but the farmers have for the past 50 years or so been involved in
cotton, wheat, vegetable and citrus production. Heri (2000), indicated that Zimbabwes geographic position and climate
makes it ideal to produce early maturing varieties of oranges which reach the target markets earlier than neighbouring
competing countries. With time and the advent of the Zhovhe Dam, significant areas have been planted to citrus which
is now the predominate crop. This development in the district has resulted in the growers being the largest employers of
labour in Matabeleland and the largest Citrus Exporters in Zimbabwe. Crops like cotton, wheat and vegetables have
diminished and some stopped altogether due to non-viability, mainly due to power costs.
Citrus by its nature is a crop that one cannot enter into easily, nor leave easily during hard economic times. This is
because it takes 8 years for a citrus tree to start giving value to the investor. The initial capital is huge and hence it takes
long for the farmer to break even and thereby start to make profits from the business. Citrus fruits are seasonal and
during ripening tend to ripen almost at once causing seasonal gluts resulting in increased postharvest management
challenges when they are in season (Musasa et. al, 2014). The sector therefore requires a non-fluctuating business and
economic environment that will enable planning and forecasting not to deviate significantly from the actual business
outcomes.
Modern agriculture has become very energy-intensive (Zarini, Yaghoubi and Akram, 2013). Farmers in Beitbridge
have for a long time been crying foul, that ever since ZESA abandoned the tariff they used to operate on, their cost of
production has gone up with electricity bills occupying more than 41% of their total production cost today. For this

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reason, the growing of field crops, has become unviable, and the margins on Citrus production, questionable,
particularly, with regard to the establishment, of new Orchards. Even growers, with established Orchards and
infrastructure, are finding it difficult to maintain Citrus production.
Almost all the farmers in the District owe ZESA large amounts of money backdating to 2009. This paper seeks to
examine the environmental conditions that citrus farmers in Beitbridge operate under, investigate the effects of ZESA
tariffs on their production, explore how dollarization affected them and to try and suggest solutions and
recommendations.

1.1 Research Problem


The economics and development of the area was driven and based on relatively cheap and reliable power and
water which was absolutely essential to make any economic sense of irrigation farming in the hostile climate that
prevails in the District. When power was brought into this area in the mid 1970s the farmers were advised by ESC
(ZESA) to erect transformers all over their farms and distribute the power by low tension distribution lines to the
various pumping stations and water abstraction points. This advice was to take full advantage of the billing structure at
the time which was Tariff 5. Tariff 5 was a capacity related tariff. Depending on the transformer size the first couple of
hundred units were expensive and then after that number were exceeded the price dropped considerably (+/-82%) with
volume usage. (See old quotation of supply below from 1985).

This tariff was farmer friendly, and in this particular area made it a viable power source which they could grow and
develop to where they are today. However, in recent years this tariff was unilaterally removed without consultation and
the current tariff E5.1 substituted it and this tariff made no allowance for large kilowatt hour usage. In fact, low
consumption domestic users virtually pay the same if not lower tariff per kilowatt hour unit.
The consequence of removing the Tariff 5 type structure and the introduction of the E5.1 tariff imposed on the
famers has serious viability implications. With the E5.1 tariff, farmers who have the Low Tension Distribution Line
system have been prejudiced and this system has become a total liability.
The introduction of the multi-currency system dominated by use of the US dollar brought gradual stability to the
economy while providing a relatively conducive environment for the revival of various business enterprises (Matondi
and Chikulo, 2012). It is in the interest of this study to explore the hindering factors that has led to the decline in citrus
production for Beitbridge farmers in the dollarization era despite the much cited benefits of dollarization.

1.2 Research Objectives


The study using an investigative and empirical approach have the following as its objectives;
1. To provide an analytical angle that provides a deeper and comprehensive understanding of citrus production in
Beitbridge region and its various challenges.
2. To examine how the change in ZESA tariffs impacted on citrus production for Beitbridge farmers during the
dollarization era.
3. To assess the social and economic impact of the increased ZESA tariffs on Beitbridge natives.
4. To explore the environmental conditions which citrus farmers in Beitbridge are exposed to.
5. To evaluate how the dollarization era impacted on citrus production capacity.
6. To determine which national strategies can be used to help raise citrus production for farmers in the Beitbridge
region to boost export competitiveness.

1.3 Research Questions


The study seeks to answer the following questions;

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The Effects of Increased ZESA Tariffs on Citrus Production in Beitbridge

1. How has the change in ZESA tariffs in the dollarization era impacted citrus production for farmers in
Beitbridge region?
2. What have been the social and economic impact to the society emanating from the increased ZESA tariffs for
citrus farmers in the Beitbridge region since the inception of dollarization in Zimbabwe?
3. What environmental conditions do Beitbridge citrus farmers operate under?
4. How did the dollarization impacted on citrus farmers production capacity?
5. What national strategies can be employed to raise citrus production for export competitiveness?

1.4 Organisation of the study


To enable the study to achieve its objectives and obtaining answers to the research questions, the study is arranged
in seven sections, which are equally good contributors.

II. BACKGROUND OF THE STUDY


The Beitbridge Farming area lies in Matabeleland South Province and is in Region 5 which was once classified
as semi desert area. As supported by Dzingai (2010), climatic conditions for Zimbabwe are largely sub-tropical with
one rainy season between November and March, and rainfall reliability decreases from North to South and also from
East to West. Because of its aridity (Beitbridge), excessive heat, and generally harsh environment the authorities at the
time reportedly designated the entire area as being unfit for human habitation. Beitbridge has the highest temperatures,
the least periods of cloud cover, the highest evaporation rate and the lowest rainfall in Zimbabwe Makadho, (1996).
Figure 1 below shows part of the beitbridge vegetation which consists mainly of drought resistant crops.
Figure 1: A Picture showing the Arid Area of Beitbridge

Temperatures in the Beitbridge region are very high causing high evaporation as shown by Figure 2 below.
Figure 2: Evaporation levels by area in Zimbabwe
Evaporation (m). Information supplied by Meterological Services

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The annual evaporation in the Beit Bridge District is 2.64 metres and the required irrigation is 1.5 metres per
annum which extrapolates to 15 mega Litres per hectare per annum. This is higher than all other crop farming areas
in Zimbabwe. The sustainable production of citrus depends on the availability of adequate water throughout the year
since citrus is an evergreen crop (Dzingai, 2010).

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The Effects of Increased ZESA Tariffs on Citrus Production in Beitbridge

Beitbridge receives the least rainfall as compared to other parts of Zimbabwe. The little rain received usually
comes as heavy showers, the majority runs off and what remains is ineffective as it evaporates away the next day.
Figure 3 below shows rainfall patterns in Beitbridge District.
Figure 3:Rainfall Patterns for Beitbridge since 1964
Stacked Rainfall Records Since 1974
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
2000

1800

1600

1400

1200
mm

1000

800

600

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0
74-75

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Year

The annual long term average puts Beitbridges rainfall at only 300mm which is characterised by wide
variations each year.
It follows that unlike most areas in Zimbabwe that might get away with supplementary Irrigation for certain
periods of the year, by contrast, the Beitbridge Irrigators cannot count on any relief from rain, and they have to apply
all the water requirement needs of the various crops grown.

2.1 Water supply and Pumping.


Irrigation has been the major driving force for agricultural development in arid areas for some time (Dzingai,
2010). The large volume of sand in the Umzingwani and Limpopo riverbeds hold major quantities of water which has
percolated through its structure. This water source has been taped via well point systems and tube well borehole systems
to abstract this water for irrigation. Both systems use either centrifugal suction pumps or submersible borehole pumps,
all driven by electricity. The water is normally abstracted by the above systems and delivered by pipeline to a holding
reservoir, where the water is boosted by electric pumps to the chosen irrigation system. Depending on the distance of
the lands from the river abstraction points there may be additional boosting stations. This is unlike the other Lowveld
Irrigation areas, who generally receive water to field edge by gravitation in canals drawn from surface water.
The volume of water required to produce a specific crop in that arid area is two or three times more than that in
other areas of Zimbabwe. It is important to provide the right amount of water at different growth stages, to enhance the
growth of citrus trees (Dzingai, 2010). When extrapolating this to the cost of the power required to double pump the
water onto the land, and the cost of the water, one arrives at a collective power and water cost, of four or five times
more than that of other areas in Zimbabwe. See picture below.

Therefore, adequate water is required for efficient production of citrus fruits. When water is insufficient,
growth is retarded, leaves curl and drop, young fruit fall and fruit that mature are deficient in juice and inferior in
quality (Dzingai, 2010). Irrigation for citrus orchards should match, not only the growth and development stages of the
trees, but also the topography of the orchard, this includes soil properties.

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2.2 Steady increase in tariffs


Prior to Dollarization in February 2009 the citrus farmers in the Beitbridge area were paying 4.5 cents per
kilowatt hour (unit) and this changed in that month to 6.61 cents per unit and has risen steadily with increases in July
2009 (7.0 cents/unit), June 2010 (8.0 cents/unit) and September 2011 (12.0 cents/unit). (See Graph Below)

If one looks at the 2012 rate of 12 cents per kilowatt hour unit, this was not the total cost, as one had to add a
6% Rural Electrification Levy. By adding this cost it takes total cost per unit closer to the 13 cents level, without the
addition of the VAT at 15%.

2.3 Regional and Global Competitiveness


According to USDA (2017), global orange production for 2016/17 is forecast up 2.4 million metric tons from
the previous year to 49.6 million, implying a constant growth in citrus production. South Africa is ranked the best citrus
producer in the Sub-Saharan region. South Africas production is forecast unchanged at 1.6 million tons, and its exports
are a little changed but still account for nearly 25 percent of global trade, with European Union and Russia remaining
the top markets for South African oranges (USDA, 2017).

Oranges, Fresh: Production, Supply and Distribution in Selected Countries


(1,000 Metric Tons)
2011/12 2012/13 2013/14 2014/15 2015/2016 2016/2017 JAN
Brazil 20,482 16,361 17,870 16,716 14,320 18,197
China 6,900 7,000 7,600 6,600 6,900 6,200
European Union 6,023 5,890 6,550 5,954 6,241 6,050
United States 8,166 7,501 6,140 5,763 5,362 4,892
Mexico 3,666 4,400 4,533 4,515 4,400 4,375
Egypt 2,350 2,450 2,570 2,635 2,930 3,000
Turkey 1,650 1,600 1,700 1,650 1,800 1,855
South Africa 1,466 1,659 1,723 1,645 1,560 1,560
Morocco 850 784 1,001 868 925 960
Argentina 565 550 800 800 800 650
Vietnam 531 521 532 590 590 590
Australia 390 435 430 430 455 470
Costa Rica 326 315 220 335 335 345
Guatemala 160 152 154 160 160 160
Israel 116 73 69 86 105 115
Other 156 160 190 193 192 191
Total 53,797 49,851 52,082 48,940 47,075 49,610

To survive in these tough economic times, the farmers should have an edge on their competitors who are also
vying for the same regional and overseas markets. If we compare the Beitbridge farmers against their South African
and Zambian counterparts, the Beitbridge famers pay more for electricity. Taking a look at the costs in US$ in cents
per kilowatt hour, neighbouring country farmers pay approximately the following for power:
Zambia $0.033c /kW hr (K168.08)
RSA $0.083c / kW hr (ZAR0.7148)

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In the case of the Beitbridge growers their direct competitors are found in South Africa and especially in
regards to export citrus. The two Pie Charts below amply show the effect the high electricity costs have on Field
production as compared to a similar farmer in the Musina Area of South Africa.

Due to the high pricing, the Beitbridge farmer accounts for 41% of total production costs to electricity bills,
which is far greater (double) than the average bill for a South African farmer who accounts for only 20%. The
zimbabwean farmer is therefore too weak to compete for both foreign and local markets as compared to the South
african counterpart. There is however so much similarity on other types of costs and this leaves something to be done on
the pricing level of electricity for beitbridge farmers.

III. IMPACT OF RISING COST OF PRODUCTION ON CITRUS PRODUCTION


Profit margins in the citrus business are rather tight; and many production cost reduction alternatives should be
explored (Cardenas-Lailhacar et. al, 2003). Production cost refers to the cost incurred by a business when
manufacturing a good or providing a service. Production of goods and services involves transforming resources - such
as labor, power, raw materials, and the services provided by facilities and machines - into finished products (Besanko,
2004). Every firm strives to make profit, and this is the same for citrus farmers. According to Taylor (1996), profit
occurs when a firm sells a good or service for more than it cost to produce. Production costs include a variety of
expenses including, but not limited to, labor, raw materials, consumable manufacturing supplies and general overhead.
The production function is the relationship between the maximum amount of output that can be produced and the inputs
required to make that output.
The market for citrus has not changed much for the past decades. The return for selling the citrus produce has
so much remained not volatile despite the constantly rising demand due to population growth. Farmers in Beitbridge
have always lagged behind other foreign farmers in their production capacity in this citrus industry. This has been like
this for a number of years, if not decades, because both quality of machinery and also the cost of purchasing the
machinery, which are being imported.
Given the above explanations, the competitiveness of Beitbridge farmers has over the past decades been seen
further trimmed by rising electricity tariffs implying rising cost of production. Revenue obtained from citrus production
has been on a downward trend due to reduced production forced by rising cost of production. Declining revenue has
called for farms to engage in measures that are not socially acceptable, which involve employee retrenchment and
relying on contract workers for fieldwork.

IV. INDIVIDUAL FARM CASE STUDY [SAMPLE]

Nottingham Estate
The whole farm has about 1000 hectares of irrigable land but currently they are using 398 hectares and they are
expecting 24 048 tonnes of yield with a yield per hectare of 60 tonnes. This is due to the current conditions given the
cost of electricity. Under normal circumstances they have the capacity to operate at full capacity thus using all the 1000
hectares. Before the tariff increases they were using 800 hectares with expansion plans to use all the 1000 hectares.
They have 156 permanent employees and 650 casuals who usually come during the picking season but they
used to have 290 permanents and 1000 casuals, they have been forced to reduce labour costs due to the increase in
power cost.

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Electricity used to represent about 16% of their total production cost but now its consuming 38%. In 2011 they
paid ZAR 1 726 490 as bills to ZESA and are currently owing ZESA $120 000 backdated to June 2007. Last year they
have lost about 65 tonnes of fruit as a result of load shedding,
In 2010 when the ZESA tariff was 8c per unit they had an annual total revenue of ZAR 9 296 337 and their
ZESA cost was ZAR 3 860 838 and a net profit of ZAR 2 527 623. But in 2011 with a tariff of 12c per unit they had a
revenue of ZAR 13 390 244 and their ZESA bill was ZAR 4 434 199 and they had a net loss of ZAR 453 647. This
means there was no money for expansion and other investments.
Apart from paying taxes, employment creation and generating exports they are helping the nation through
social responsibility activities. They have built a school, a clinic and have an employment policy where they employ
people from the surrounding villages first.

V. RESEARCH FINDINGS
1. The main cause of the problems is the introduction of a blanket electricity pricing structures over the whole
country by ZESA, which totally ignores the diverse climatic conditions prevailing in the different regions in
the country and more importantly the requirements of the multitude of different crops by the agricultural
industry.
2. Irrigation in the district was driven by diesel engines and the irrigation designs were for flood irrigation. With
the advent of electricity supplied under tariff 5 by ESC (ZESA) the district switched over to sprinkler irrigation
to increase efficiency of water usage and reduce labour costs. There was as well tremendous expansion which
would never been possible pumping water with diesel. These irrigation schemes were designed by the farmers
with tariff 5 in mind. It was never appreciated that the very basis upon which the electricity tariff was
structured would be changed. With the imposition of the new tariff it became unaffordable for the irrigators to
rearrange their entire irrigation system to revert to flood irrigation to suite the straight line tariff introduced by
ZESA. The capital cost could have been prohibitive for all producers.
3. When tariff 5 was still in force, power consumption constituted on average 16 % of total production cost but
with the introduction of the new tariff power consumption alone is now in excess of 41 % of total production
cost.
4. It takes 8 years for a citrus tree to start giving return to the farmer so under tariff 5 they used to grow cash
crops like wheat, cotton and maize to finance the establishment of citrus production. With the introduction of
the new tariffs, cash crop farming was abandoned completely. As a result, many people have lost their jobs and
the government have lost heavily on taxes and foreign currency inflows. An example is Germ farm that
developed 240 hectares of land for the irrigation of field crops at tremendous expenses, to specifically finance
new citrus crops. This land had to be abandoned and had lain fallow ever since. About 80 people lost their
jobs. Another good example is the Border Ridge farm case that came into the district later than most and was
caught in the early stages of establishing Citrus Orchards and being suddenly faced with the increase in power
tariffs overnight which in the case of Cotton increased the percentage cost of electricity from 15% to 45% of
the production costs. They have had to abandon the enterprise.
5. Load shedding is seriously affecting yields, the frequent and long periods of load shedding is becoming a
threat to the economic survival of the irrigators in Beitbridge District. Pumped water is the absolute lifeblood
to the continuing viability of all the enterprises, which will be seriously affected with a power reduction,
particularly at critical times such as the Citrus fruit setting period and germination of seeds and seed beds.
This has already affected this years yield with some farmers already 50% down on what it should be and if the
trend continues they will have great difficulty in making economic sense on their efforts.
6. The Citrus packing season has been turned in to a nightmare with frequent load shedding. Growers have to
meet certain dates for shipping and one cannot pack a fruit that had been picked days before and fruits held in
cold rooms are triggered into giving off ethylene which is part of the ripening process and cant be stopped so
fruits deteriorate rapidly.
7. The original designs of the pump stations were for pumping with diesel engines and did not cater for and
install protection for sudden losses of power. The sudden and unscheduled power cuts is wreaking havoc with
pumping installation and particularly the suction lines buried in the sand in the river. The tremendous back
pressure with water rushing back is bursting the suction lines in the sand and these are difficult and expensive
to repair.
8. The farmers have been adversely affected by the dollarization of the economy. Most of them lost large
amounts of money that was tied in the local currency in their accounts. Some had their foreign currency taken
from their accounts overnight by the Central Bank. Worst of their problems with the dollarization are the
ZESA debts. Some farmers are owing ZESA large sums which they are struggling to pay because they are
already struggling to pay current bills.
9. Most of their produce is exported but there is a factory that has been established and is designed to take the
lower qualities of fruit that is produced along with export standard fruit and this produces Mazoe orange juice
both for the local and international market.

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The table below shows a summary of the research findings


Name of Farm Nottingham Benfer Germ Cawoods Shamba Yetu Border Ridge Bishopston Total
[2012 Statistics] Estate Estate Etsate Estate Estate Estate e Estate
Current No of Employees 754 90 95 210 100 200 810 2259
No of Employees @ full 2000 250 135 260 160 340 2500 5645
Capacity
Current land Usage 400 h 80 h 60 h 170h 90h 120h 600h 1 520h
Land Usage @ Full Capacity 1000 h 600h 120 h 250h 200h 200h 1500h 3 870 h
Estimated Land usage @ 800h 200h 100h 220h 150h 170h 1200h 2 840h
proposed tariff of 6c
Estimated Current average 300 000 58 400 50 000 100 000 55 000 units 65000 units 390 000 101840
Power usage per month @ units units units units units 0 units
Tariff E5.1
Estimated Average power 600 000 15 100 000 170 000 120 00 units 125 000 units 700 000 196500
usage per month @ Tariff 5 units 0000 units units units 0 units
units
Estimated Average power 500 000 100 80 00 150 000 90 000 units 100 000 units 500 000 152000
usage per month @ 6c units 000 units units units 0 units
units
Estimated Average power US$ 40000 US$ US$ 6000 US$ 12 000 US$ 7600 US$ 7800 US$ 46 800 US$
cost per month @ tariff E 7000 126 400
5.1
Estimated Average power US$28000 US$ US$ 4000 US$ 10 500 US$ 6500 US$ 6000 US$34 000 US$
cost per month @ Tariff 5 6800 95800
Estimated Average power US$ 30 000 US$ US$ 4 US$ 9000 US$ 5400 US$ 6 000 US$ 30 000 US$
cost per month at the 6c 6000 800 91200
Expected yield per hectare 51 tonnes 60 55 tonnes 60 tonnes 57 tonnes 59 tonnes 60 tonnes
@ tariff E5.1 tonnes
Expected yield per hectare 79 tonnes 80 78 tonnes 79 tonnes 80 tonnes 80 tonnes 81 tonnes
@ tariff 5 tonnes
Estimated production @ 20400 4800 3300 10200 5130 tonnes 7080 tonnes 36000 86910
tariff E5.1 tonnes tonnes tonnes tonnes tonnes tonnes
Estimated production @ 79000 48000 9360 19750 16000 tonnes 16000 tonnes 121500 309610
tariff 5 tonnes tonnes tonnes tonnes tonnes tonnes
Estimated production @ 6c 63200 16000 7800 17380 12000 tonnes 13600 tonnes 97200 227180
tonnes tonnes tonnes tonnes tonnes tonnes
Estimated income @ tariff US$ US$ US$ US$ US$ 1026000 US$ 1416000 US$ US$
E5.1 4080000 960000 660000 2040000 7200000 173820
00
Estimated income @ tariff 5 US$ US$ US$ US$ US$ 3200000 US$ 3200000 US$ US$
15800000 960000 1872000 3950000 24300000 619220
0 00
Estimated income @ US$ US$ US$ US$ US$ 2400000 US$ 2720000 US$ US$
proposed 6c 12640000 320000 1560000 3476000 19440000 429860
0 00

From the table above it can be clearly seen that these farmers can perform better under tariff 5 than the current
tariff E5.1 and also that a tariff of 6c per unit is a better option.

VI. RECOMMENDATIONS
1. ZESA Tariffs - It is financially viable for the farmers if Zesa can go back to the tariff 5 structure that is farmer
friendly since the more you use power the less you pay. But if Zesa is to continue with the straight line
structure then for the farmers to break even a special tariff of 6c per unit should be adopted.
2. Load shedding- ZESA should give the farmers its load shedding schedule and try to accommodate their needs
at critical periods. If load shedding is done with no known pattern it poses great threats to productivity.
3. ZESA debts - since the farmers are struggling to repay the debts, ZESA should adopt a debt restructuring
strategy that might reduce the accumulated debt to a figure based on the revised long term tariff agreed for
these farmers and at the same time change the terms of the debt repayment. This can be done by negotiating
terms of the current debt, transferring debt to a new loan or consolidating the debt. This is done for benefits
like lower interest rates, lower monthly payments or longer repayment terms. It might take ZESA a longer
period to realise the full amounts but there is a guarantee that they will get it.
4. ZESA Efficiency. In parallel with measures to increase tariff, the power sector should consider improving
efficiency performance as this would relieve the pressure of investment and tariff increase (Nguyen, 2012).
5. Government support There is greater need for the government to fully support farmers in citrus production
for increased produce. It has been generally noted that where the smallholder producers received full support,
the quantity and quality of produce increased while those without full access to support in its various forms
failed to profitably gain from their enterprise (Matondi and Chikulo, 2012).

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The Effects of Increased ZESA Tariffs on Citrus Production in Beitbridge

6. Blending citrus and bee production for increased profits. This concept can be borrowed from Florida, which
has done this for a long time. For decades, citrus growers in Florida have allowed beekeepers to place hives in
their groves during citrus bloom (Rogers, 2014). Worth to note is that, citrus may not directly benefit from the
presence of bees because most citrus varieties are self-pollinating, the resources provided by citrus bloom are
very important for beekeepers. Hence, blending bee keeping can raise revenue for the farmers, rather than
concentrating on citrus production alone.
7. Avoiding Post-harvest losses. Apart from increased production costs associated by increased energy tariffs,
farmers should try as well to manage post-harvest losses because they strain the little revenue to be realised.
Post-harvest losses can be avoided through efficient marketing strategies, group selling and forward contracts
among other possible strategies.
8. Farm invasions. The increased cases of farm invasions in Zimbabwe over the past decade, has significantly
impacted the future of white citrus farmers, thereby reducing productivity. Many citrus farms have been
victims of farm invasions and threats to invasion. The government should support and strengthen citrus
farmers and protect their farms from illegal invasions emanating from political differences.

VII. CONCLUSION
The farms investigated were mainly devoted to citrus production. As previously stated the farms in question were
developed on a low voltage capacity related tariff. The enigma is that when the Agricultural tariffs were changed there
was no concession for capacity related usage of power except in the 11kV (E5.2.11) and 33 kV (E5.2.33) supply
systems, where their usage charges range between 12 cents per unit at peak times, to 3 cents on off peak periods. This
over a 24-hour period gives an average price per unit of 6.02 cents /kilowatt hour. This is a 66% cost saving per unit
compared to the E5.1 tariff structure.
The E5.1 low voltage tariff meters do not have the capability of distinguishing the time of usage, but in general the
farmers are attempting (limited by load shedding) to pump 24 hours a day, so such a system could be worked out. Zesa
has time and again argued that the electricity tariffs are way too low in comparison to what is prevailing in other
countries in the region. While this may be true for some tariff structures, the argument maybe misplaced because
Zimbabwe uses hydro power which is the cheapest source of energy, and abundant reserves of coal. The authorities
should take advantage of these resources and ensure that electricity remains reasonably priced to a level that should
attract investment into this sector and to other sectors of the economy rather than trying to catch up to get to tariff levels
in other countries in the region that do not have these resources.

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