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In principle, Grain SA is opposed to a ‘wet contractor’ qualifying for the diesel rebate. The intention
and aim of the diesel rebate are to provide certain non-road users involved in eligible primary activi-
ties with relief from the road-related tax burden and to support the competitiveness of agriculture in
the global environment.
When a contractor (middleman) qualifies for the diesel rebate, the benefit will not necessarily be
passed on to the primary producer for whom the rebate is intended.
Other matters that cause concern:
What is regarded as a source document?
Some of the activities that are excluded as qualifying activities, like transporting agricultural inputs
and maintenance, repairs to or re-installation of agricultural equipment, are cause for concern.
A ‘specialised transport vehicle’ should also be better defined to include tractors and specialised
trailers that transport grain to silos, for example.
The list of dedicated agricultural vehicles must also be expanded (iv).
It is the strategic intention of Grain SA and Agri SA to take up these matters with the Minister of Finance
and the National Treasury and resolve them.
THE AGRICULTURAL MACHINERY INDUSTRY
Due to advanced international technology, South Africa imports most of its agricultural machines,
once again making the rand/dollar exchange rate an important factor in pricing. The strengthening
of the rand therefore contributes to lower agricultural machinery price trends, whereas a weaker rand
contributes to higher price trends.
Prices
Table 6
summarises how the individual year-on-year price changes have moved over the past two
months for the four classes of agricultural machinery, together with the overall figure. The figures have
been ‘smoothed’ by using the three-month moving average in every case. The prices for agricultural
machinery have increased on average by 1,8% from August 2021 to August 2022, and by 3,2% from
September 2021 to September 2022. With the value of the rand fluctuating widely in recent months,
prices are fluctuating too. More recently, year-on-year price changes have been moving upwards for all
machinery classes.
PRICE CHANGES IN AGRICULTURAL MACHINERY EQUIPMENT
EQUIPMENT CLASS
YEAR-ON-YEAR CHANGE %
TREND
AUG 2022
SEP 2022
Tractors
2,7
4,8
Up
Combine harvesters
1,1
1,9
Up
Hay and forage equipment
0,5
1
Up
Implements
1
1,9
Up
General
1,8
3,2
Up
SOURCE: AGFACTS
INPUT AND PRODUCTION OVERVIEW