Govt, suppliers, retailers must partner against high prices

Friday, March 6, 2009
By: 
Bathandwa Mbola

Pretoria - South African commodity organisations, input suppliers, manufactures and retailers need to partner with government to develop practical solutions to address high food prices, says Agriculture and Land affairs Minister Lulu Xingwala.

"It is imperative for the government and private sectors to partner and come up with responsive and practical solutions to address the food prices faced by our communities," the minister said at a high level symposium on high food prices in Pretoria on Friday.

She said the price of food had been a concern for government, especially against the backdrop of a global economic crisis, but reiterated that the country was not experiencing a food shortage.

The high food prices have had a pronounced negative impact on food security of the poor households who spend a substantial portion of their income on food.

"Everyone's been hit by the rising food prices, but it's the poorest of the poor who will suffer the most."

Government has been urging people to grow vegetable in the back garden as a source of food. The minister on Friday further advised communities to use fallow land.

She said her department had undertaken the first phase of increasing production in the country by 10-15 percent through the Llima/Letsema campaign.

"In this case, the issue of high food prices was addressed through Llima/Letsema in order to increase food production by making use of all available land, especially land lying fallow in the rural and peri-urban areas.

The campaign, launched in Jacobsdal in the Free State in August 2008, aims to revive the traditional community building; self help synergy where citizens collectively take responsibility by contributing towards finding solutions to pertinent issues

However, it is not just the economic situation that has caused food prices to soar.

Population growth and changing diets in developing countries have created an expanding demand for food, this has coincided with a drop in supply of food as a result of erratic weather, increased fertiliser prices and the amount of agricultural land now set aside for the biofuel industry.

About 21 of the 36 countries experiencing what the UN's Food and Agricultural Organisation defines as a food security crisis are in sub-Saharan Africa.

While food prices are declining worldwide as economies contract, South Africa is losing much of the benefit in imports and exports due to the weak ran over the past six months.

Chief Executive Officer (CEO) of the National Agricultural Marketing Council (NAMC) Ronald Ramabulana said: "We are a net importer of products such as wheat, meat, soya bean and sunflower. The only exception currently is maize."

"The combination of a weak rand and import parity pricing was often neutralising lower global food prices. Things would have been much worse for South Africa if it were a net importer of maize.

"Our summer maize crop is planted and we are having a good season as far as the climate is concerned, and a normal crop is expected," Mr Ramabulana said.

The export parity price for maize is about R1 600 a ton. At import parity levels, the price would be about R2 800.

At the consumer level maize prices are also rising, though at a much lower rate than wheat, for instance.

The food price monitor, published by the NAMC, shows maize prices rose 7.62 percent in the 12 months to November 2008 while wheat prices rose nearly 38 percent.

Among the other issues raised in the meetings were for the suppliers to identify possible areas of monopoly in input items and, where appropriate, they were encouraged to report these to the Competitions Commission.

Areas highlighted for possible further investigation were in the packaging, tin, paraffin wax, glass and fertiliser industries.