Enough food, but it’s too costly

2008-04-25 00:00

Many countries can’t feed their people. South Africans, on the other hand, are not short of food — they just can’t afford it. In fact, according to economists, if government had not taken the same short-sighted approach to agriculture as it did to Eskom, consumers might not be in as big a pickle.

Supermarket till slips reflect a frightening picture. According to Statistics South Africa, the price of a basic loaf of white bread has gone from R4,75 in January 2006 to R5,89 in January 2008. Mealie meal has gone from R7,19 for 2,5 kg to R10,87, while rice has climbed from R6,25/kg to R8,20. These figures do not include the increases during the first quarter of this year that led to a 10,1% inflation high.

According to Nico Hawkins, an agricultural economist employed by Grain South Africa, which represents 18 000 producers who grow 90% of the country’s grains, South Africa produces an average of nine million tons of maize (even though it has the capacity to grow at least 12 million tons), which supplies the entire country’s needs. This year, we will export about 6 000 tons to our neighbours.

Prices are low at the moment and the local price to millers is between R1 700 and R1 800 per ton. If millers were importing, they would probably earn about R3 000 per ton.

When it comes to wheat, the picture is more disturbing. Although farmers could easily meet the country’s needs in the past, they now produce very little. Three years ago, when wheat prices were at an all-time low, farmers approached government for protection because they could not compete against prices by internationals dumping their surpluses.

Government refused to increase the tariff on wheat imports. "They said they would not burden the consumers. If you can’t compete, it is your problem. We said this was short-sighted at the time and we are sitting with the problem now. You can’t switch agriculture on and off. A farmer is not like a car manufacturer," Hawkins said.

He said prices of the two major inputs — fertiliser and diesel — have increased by more than 200% and over 60% respectively.

Hawkins said that over the past 10 years, South African consumers were probably spoiled and paid food prices that did not make farming viable.

Economists agree with Hawkins that, as with Eskom, if government had done its homework and formulated a long-term strategy that provided for marginally higher increases over a longer period, consumers would have been cushioned from the latest price blows.

Instead, South Africa is short of affordable food. According to Stats SA, in 2000, 35% of the population faced food insecurity and 1,5 million children below six were malnourished. Seven years later, the situation is far worse.

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