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Ivor Price | 1 June 2023

Agri SA says proposed regulations requiring up to 75% black South African shareholding in water licenses could devastate agriculture, risking the nation’s food supply.

In a move that has sent shockwaves through South Africa’s agricultural sector, the department of water and sanitation has unveiled draft regulations that could have far-reaching implications for food security.

The proposed regulations demand that certain enterprises seeking water use licenses allocate shares of up to 75% to black South Africans. However, experts warn that this singular focus on ownership demographics disregards crucial factors and could lead to disastrous consequences for the agricultural industry.

Janse Rabie, legal and policy executive at Agri SA, a prominent agricultural association, cautions that these regulations, if adopted in their current form, would spell devastation for the commercial agricultural sector. Rabie highlights that the department envisions compulsory licensing of existing lawful water uses, which would disproportionately impact agricultural operations heavily reliant on historic water rights.

“The proposed regulations seek to make BBBEE (broad-based black economic empowerment) the sole consideration for granting licenses, disregarding the other critical factors outlined in Section 27 of the National Water Act,” asserts Rabie.

This approach neglects essential considerations such as the efficient and beneficial use of water, socio-economic impact, and investments already made by water users.

Loss of water resources

The agricultural sector, which accounts for approximately 60% of the country’s total water use, finds itself in the crosshairs of these regulations. By focusing solely on ownership demographics, rather than a comprehensive evaluation of all relevant factors, viable commercial farming enterprises could face the loss or partial loss of water resources, severely hampering their ability to provide the nation with a secure supply of food.

Furthermore, the draft regulations extend their reach to “stream flow reduction activities” like commercial forestry plantations and even include provisions for hydraulic fracturing. These additional measures pose further risks to food security and add to the growing concerns raised by industry stakeholders.

While Agri SA recognises the importance of an inclusive and representative agricultural sector, they contend that the current draft regulations would effectively force the transfer of ownership of water, the sector’s lifeblood and most crucial input factor.

Rabie warns, “The consequences that the draft regulations in their current form will have with respect to agriculture and food production in South Africa will be fatal.”

The proposed regulations arrive at a particularly precarious time for the agricultural sector and the wider economy. The industry is already grappling with challenges such as frequent power outages, rural crime, and deteriorating public infrastructure. This additional burden threatens to exacerbate existing hardships and undermine the sector’s ability to contribute to national food security.

Stakeholders and concerned parties are urged to participate actively in the commentary period, which ends on 18 July 2023, to ensure that the final regulations account for the broader considerations essential to safeguarding the nation’s food security and the sustainability of the agricultural sector.

Failure to address these concerns could have dire consequences for South Africa’s ability to feed its population and maintain a thriving agricultural industry.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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