The recent violent looting in KwaZulu-Natal and Gauteng have resulted in high food prices, especially for essential goods such as cooking oil, potatoes, meat and sugar.
This comes from a new report by the. Competition Commission.
The latest Essential Food Pricing Monitoring Report – part of a series of quarterly reports tracking the impact of the pandemic and economic crisis on food markets – also found that the number of farmers in South Africa had declined dramatically in the last ten years from 3,899 in January 2007 to just 1,053 in January this year.
The report shows that South Africans are learning to deal with Covid-19, but no longer out of panic buying out, as it did in the first wave, the pandemic had a huge livelihood impact, making affordable pricing for essential foods more critical.
The commission noted that overall price inflation was in Vital foods are linked to global supply disruptions due to climate changes and adverse weather events that directly affect nutritional health health and pricing.
According to the report, the pandemic has also exposed the weaknesses in the commercial agricultural market structure that needs to be reformed to make it more sustainable, inclusive, and offer more livelihood and prices for Reduce agricultural products.
The current market structure has not only resulted in high food prices for consumers, but has also disadvantaged smallholders, who often struggle with low profit margins, poor yields, a lack of operational knowledge, poor bargaining power and a lack of access to high quality seeds and fertilizers – which in turn limits the ability of farmers to achieve the level of food safety accepted by retailers.
The latest report shows that the agricultural value chain in SA is highly industrialized and characterized by the super-commercialization of production by large area extensive agriculture as well as concentrated intermediate consumption and concentrated processing, all at the expense of the smallholders. The report looks at the impact on smallholder agriculture and participation in South African agricultural markets.
“It may be necessary to build on a change in market structure and develop an agricultural model that enables industrial agriculture and at the same time supports and includes smallholder and local agriculture. This could also make the market more resilient to global supply chain disruption from climate change events, ”read the report.
The Commission said that while there were significant price increases for products like potatoes, tomatoes and cooking oil during the pandemic“ there is no obvious connection with the progression of the pandemic and the third wave of Covid-19 did not show any panic buying that led to price changes “.
” Rather, it seems that the increasing frequency of extreme weather events at local and international level has led to high food price inflation in the past 18 months. The commission has received complaints of price gouging in KwaZulu-Natal affecting essential foods such as cooking oil, meat, rice and sugar in areas affected by the riots and looting.
“The pandemic and recent riots and looting have also shown that long food supply chains can be disrupted in modern times. Globally there were also questions about the structure of agriculture, especially industrial agriculture, and the need to promote smaller, localized agriculture that is also included on the climate change agenda, ”said Commission Chief Economist James Hodge.
He added: “The localization of agriculture and shorter supply chains can open up more opportunities for smaller farmers, as shorter supply chains forego the high transport and high brokerage costs associated with longer value chains. This has the potential to improve smallholder participation in the value chain and also to help address issues such as rural poverty and lack of access to affordable and healthy food. ”