Change in VAT rules will hit potato farmers

Annelie Coleman
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The proposed repeal of zero-rated VAT on agricultural inputs such as animal feed, fertilisers, plants and seeds will add to the already compromised profitability of the sector, said Potatoes SA (PSA).

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“The total current cost for inputs such as potato seed, chemicals and fertiliser amounts to R2,4 billion per year,” PSA CEO André Jooste told the Potato Seed Growers Forum in Bloemfontein.

“The introduction of 14% VAT will result in an additional R338 million in production inputs.”

This translates into an additional average cash flow requirement of R564 047 per potato producer, said Jooste.

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