"Over the short term, increasing costs lead to pressure on farmers' profit margins, which again can lead to decreasing production or an adjustment in production systems," he said.
The tariff increase requested by Eskom could neutralise the benefit of the two percent year-on-year decrease in the producer price index, as measured in April.
"This will have a negative impact on farmers and consumers. With time these increasing costs will have to be reflected in food prices, which is still a sticky contributor to high consumer price inflation," said Moller.
"Electricity is on both farm level and in the food value chain an essential necessity.
"Irrigation and dairy farmers' production systems are heavily dependent on the reliable and affordable supply of electricity," he said.
Moller said the National Energy Regulator of South Africa should consider Eskom's application carefully in terms of the country's ability to produce food locally, as well as from the perspective of affordable food and economic growth.
"In Agri SA's opinion the shock waves of last year's disruptions in power supply and the resulting increases in Eskom's tariffs is the result of poor planning."
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