South African food-price crisis: Here’s what’s at stake
If not already, we’re very near to a full-blown South African food-price crisis, warns Agri SA.
Mounting pressure on farmers means a full-blown South African food-price crisis is not far off, warns Agri SA. Consequently, the biggest federation of agricultural organisations in South Africa is warning everyone of the unyielding pressure on the agriculture sector.
TRENDING: Increase for SASSA grants come into effect 1 October 2023
Unfortunately, after yet another fuel price hike and the SA Rand tanking against the US Dollar, this pressure is beginning to show. South Africa’s agricultural growth is steadily declining. 17.8% in 2020, 7.4% in 2021, to a marginal 0.9% in 2022, reports Daily Investor.
SOUTH AFRICAN FOOD-PRICE CRISIS
The decline in the agricultural sector’s profitability is the result of rising input costs, volatile exchange rates, load-shedding and labour costs, says Agri SA. This is reflected a rapid increase in debt (442% increase in 15 years). In 2006, farming debt stood at R37.7 billion. By 2022, it’s R205 billion.
Fundamentally, farmers have no control over prices of their products beyond the gate. Retailers set the prices, minus fuel, electricity changes and exchange-rate fluctuations. Therefore, farmers are forced to absorb these additional costs themselves.
MASSIVE FUEL PRICE HIKE
On Wednesday 4 October 2023, South Africa saw a second consecutive fuel price hike. 95 octane petrol increased by R1.14 per litre. Diesel 0.005% Sulphur increased by R1.94. This represents a cumulative increase in diesel to a whopping R4.70 per litre in just two consecutive months.
ALSO READ: Cape Town residents urged to take note of road CLOSURE signs
Likewise, this time of year sees heightened activity with the planting of summer crops and harvesting of winter crops. The poultry sector has also been hard hit by avian flu and the consequent disruption to operations in the industry, meaning additional financial strain for producers. All of this points towards a South African food-price crisis. We’ll keep tracking prices at the supermarkets to keep you informed.
Be sure to share your thoughts with our audience in the comments section below. And don’t forget to follow us @TheSANews on Twitter and The South African on Facebook for the latest updates.