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Why food prices are going up

By Faeza
17 July 2017

As the water crisis that has gripped the country for months worsens, Malibongwe Mngomezulu takes a look at the effects of the drought.

food price

SOUTH AFRICA is experiencing its worst drought in 23 years, according to the South African Weather Services. The impact has been devastating, with millions of households going without water. The agricultural sector has been left reeling; with AgriSA calling for “the drought to be declared a national disaster”.

DRY TAPS

According to Wayne Venter of the South Africa Weather Services, “The drought is caused by the lack of rainfall over the past few years, especially for the summer rainfall areas of South Africa”. KwaZulu-Natal, Mpumalanga, Limpopo, Free State and North West province have been the hardest hit, while certain districts in the Eastern Cape, Western Cape and Northern Cape have been declared disaster zones. The Amathole district in the Eastern Cape is one of hardest hit areas; with dry taps being the order of the day. “The drought has dire effects on the general health of the public, but more especially on communities who rely on marginal or non-irrigated water supply sources at times,” the mayor of Amathole district, Nomasikizi Konza, said in a statement to the press. She added, “Severity of the drought has not only been felt by our people, but the current situation is worsening and has killed herds of livestock and left many livestock and crops vulnerable in the province. Over the past two years there hasbeen limited rainfall in the Eastern Region (Mnquma, Mbashe and Northern parts of Amahlathi). The three supply dams in Dutywa are now dry and from May 2014, there has been a continuous decline in the Xilinxa storage of the dam, which supplies the town of Butterworth and surrounding areas. Dam levels in the Eastern Region reflect the Xilinxa Dam now at 33 percent and the Toleni dam at 53 percent. We are now in the middle of the rainy season and there have been predictions for some rain relief this summer, so it would appear that the situation is not going to improve for some time. The frequency with which we have been hit by drought is alarming. In 2011 alone, the district was declared a disaster area due to the impact of the drought”.

IMPACT ON AGRICULTURE

Speaking to Move!, Thabi Nkosi, Agri SA’s senior economist, says the drought has had devastating effects on the agricultural sector. “Sugarcane farmers in KwaZulu- Natal have been the ones who have been affected longer by this drought than any other farmers in the country,” says Thabi. She adds that livestock farmers in the Free State have also suffered huge financial losses. “This drought has had a very negative impact on smaller farmers in South Africa because smaller farmers do not have money to insure their farms, especially grain farmers. Many established farmers nearly lost almost everything due to the lack of resources,” she says. Maize farmers have had to face barren farms, and in order to feed the country, maize is being imported. Last year, dry conditions cut maize crop production by a third.

THE RISING COST OF LIVING

Whenever there is a drought, food prices are sure to go up. Ron Klipin, an analyst at Cratos Capital, explains: “Food prices are going up because we are currently importing a lot of grain from other countries. The more we import, the more the prices of food will come up”. He says the cost of living will also be affected, and will keep rising as the drought becomes worse. “The rand is also weakening, essentially causing basic foods such as bread, maize and chicken to go up,” he says, adding, “The unfortunate part is that while food prices go up, unemployment in our country is on the rise”.