Pieter Taljaard
CEO, Grain SA pieter@grainsa.co.za
Over the past few months, we have been writing and warning about the unfavourable and risky situation with inflation, specifically food inflation. The dark clouds of rocketing farm input prices have been the topic of discussion for even longer and have in part been identified as the cause of the former.
We know that it is often difficult times like these that necessitate creative ideas, innovations and solutions. The reality is that the global (and in particular the local) energy supply disruptions are the culprit – guilty as charged – of the whole predicament. I am writing about this because this is our game, it is our shared responsibility, but it is also South Africa’s biggest risk.
As I am writing this, I have to admit that I am still wrestling (even in shock) with the information shared with me in a recent meeting with one of our prominent millers. Food inflation is having a detrimental and dire effect on the people in our townships. Considering staple sales, the units are constant, but the volumes have been reducing significantly in the past weeks. As an example, they noted that low-income consumers are forced to halve the size of maize meal bags due to affordability. This is not only the result of the high maize price, but rather the knock-on effect of energy and other value chain costs putting upwards pressure on staple prices. Yes, we are clearly aware of this and despite local maize meal still being the most affordable food, a significant proportion of low-income households in our country are reverting to one meal per day.
Even more shocking, others are surviving (for now) on having a meal every other day! We have been warning about this, we knew it was bad, but I’m sure when being honest with ourselves, not many of you reading this have realised the severity of the situation. Our predicament is that production cost is the rock and food affordability is the hard place, or is it the other way around?
August saw the Consumer Price Index (CPI) dip slightly to 7,6%, down 0,2% from July. More recently the Global Food Security Index (GFSI), developed by Economist Impact and supported by Corteva Agriscience, which considers food affordability, availability, quality and safety as well as sustainability and adaptation across 113 countries, ranked South Africa 59th. When breaking it down into the four main categories and measuring out of 100, affordability scores 63,4, down 7,1 points since 2012; availability scores 60, up 3,7; quality and safety score 66,1, up 3,9; and sustainability and adaptation score 56, up with nearly 22 points since 2012.
Highlighted areas for improvement firstly include sufficiency of supply or adequacy, categorised as very weak, followed by income inequality that declined from 42,9 to the current 31,2 despite all the affirmative programmes. Thirdly, nutritional standards were flagged, specifically resulting from poor nutritional labelling.
From the above, the writing is clearly on the wall, specifically taking cognisance of projected population growth rates in Sub-Saharan Africa. Local agriculture will have to continue to outperform itself to save our beloved nation. This is not something new, but the rate of change required simply just keeps on increasing. A bleak picture indeed, but I am sure the optimist will see opportunities. The fact remains that the current situation would have been much worse if we were not blessed with extremely favourable rainfall conditions during the past three seasons. Just imagine …
As we are entering this festive season, all hopeful for yet another good year, let’s remember to keep on doing the best we can. Let us continue to do the right things and never forget how important our calling is! Please stay focussed, please stay positive and never stop dreaming about the opportunities. Enjoy the farm and take your fellow South Africans with you. Our future depends on you!
