Food items cost more for rural shoppers

2010-12-13 00:00

A FOOD pricing research document released recently by the National Agricultural Marketing Council (NAMC) has found that consumers in rural areas are paying significantly more for basic food items compared to urban communities.

The quarterly research done by the NAMC as part of the Food Price Monitor, released last week, looked at the changes in food pricing between July 2010 and October 2010.

It looked at the cost of items such as full-cream long-life milk, margarine, peanut butter and black tea and found that these items are more expensive in the rural areas than they were in urban centres.

It finds that consumers in the rural areas apy R5,87 more for two kilograms of rice, R3,82 more for kilograms of maize meal and R3,11 more for 2,5 kg of white sugar.

And while the average prices of dairy products declined in urban centres, average prices increased in rural areas between October 2009 and October 2010.

the survey finds that white bread, brown bread and sunflower oil are the only items that are more expensive in urban areas.

It is not immediately clear what has caused the prices to change, according to Louise Swart, an agricultural economist with the NAMC.

The council offered several reasons why the food items were more expensive in the rural areas

“Transport is a major factor,” says the survey report. “Processing of raw materials takes place mainly in the urban areas and the finished products have to be transported to the rural areas at additional cost.”

The report said hikes in the prices of fuel and diesel compound the situation, since food items have to be transported over greater distances.

“In many cases the outlets referred to are not big retailers, but small businesses in deep rural areas where the transaction cost of making food items available to consumers is high.

“The high transaction costs could be due to a number of reasons, such as poor infrastructure.”

The report also suggested that the high increases might be due to the lack of sufficient competition, since in many areas there might only be one or two food outlets.

rice (2 kg) +R5,87

maize meal (5 kg)

+R3,82 white sugar (2,5 kg) +R3,11

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