Pietermaritzburg - The price of food in the baskets of low-income households shot up
by nine percent in the three months to January — and there are more price hikes
to come.
The percentage is an average — big increases were recorded for some
foods, such as a 109,5% increase on a 10 kg pocket of potatoes, a 65,4% increase
for a 10 kg pocket of onions and a 78,8% increase for two heads of
cabbage.
Economists and agriculture organisations have warned for some
months now that the price of food would rise substantially due to the severe
drought. Food inflation, until November last year, had been low.
“Extreme levels of food price inflation call on government to
intervene immediately and decisively where they are able to,” the
Pietermaritzburg Agency for Community Social Action (Pacsa) said in its survey
of monthly food inflation for low-income households that was released
yesterday.
The month-on-month increases in the December and January food price
data were eight times higher than the average monthly increases over the
preceding 12-month period, Pacsa said.
The month-on-month increase for November to December was 4,01% and
for December to January it was 4,8% up.
Meanwhile, the average month-on-month increases in the survey for
December 2014 to November 2015 was only 0,52%.
However, the year-on-year increase from January 2015 to January
2016 was 14,6%.
Pacsa said the price hikes suggest that food prices might increase
beyond 15% in 2016.
The government needed to find ways to put more money into the
pockets of low-income earners in the short term, while social grant increases,
due in February, needed to rise in line with projected food price inflation
for 2016, Pacsa said.
Longer term, the national minimum living wage debate needed to be
fast-tracked, while Nersa needed to turn down Eskom’s latest proposal for a
16,6% increase in electricity tariffs. Municipalities needed to work harder on
subsidy schemes to make services affordable at lower consumption volumes.
Low-income households, which bore the brunt of the employment
crisis and low wages, were already under severe strain.
“Households, over the years, have absorbed [price hikes] through
cutting back expenditure. This strategy is now reaching critical point, where
many households are unable to cut back any further without seriously damaging
themselves.
“We need to seriously explore a new economic paradigm that can
afford each person a life of dignity,” Pacsa said.
Neil Roets, CEO of debt management firm Debt Rescue said the short-
to medium-term outlook for consumers “looks increasingly gloomy” due to food
price increases and the depreciation of the rand.
“There is little the government can do to mitigate the prices of
food, especially the cost of maize meal which is expected to increase by 50%,”
Roets said.
“Subsidies are never a good idea and in South Africa at the moment
there is no excess cash to even consider subsidies. Feeding schemes may be an
efficient way to prevent widespread hunger, but it will require massive
organisational structures.”
