Food levies bite too hard
As a small investor in the agricultural sector, I recently stumbled onto the subject of statutory agricultural levies permitted in terms of the Marketing of Agricultural Products Act. Digging a little deeper, I found that this levy is used in numerous agricultural industries for the financing of certain permissible expenses, and the total raised is approaching R1bn a year.
The levy is collected along the product chain but is financed by the consumer. It can be applied to export activity, which has achieved much success in many industries, and is paid for by foreign consumers as well as through locally produced and imported products paid for by local consumers.
I raised some questions on this issue in letters to the editor, stating that in these tough times, with poverty and hunger rife, embattled SA consumers should not be paying levies on basic foods (“With consumer financed levies, the enduser pays”, February 26). I expected some reader kickback, pointing out that I was misinformed or missing something, or else supporting my concerns. But there has been nothing. Either I really am poorly informed or I’ve hit a nerve.
I then decided to dig a little deeper. There was not much to go on because, though most industry associations report on the levy on their websites, there are scant details of the related financial effects. A few representative bodies publish their financials on their sites, and it was disturbing to see that (in the case of at least one industry body and possibly more) levy income is high relative to the small role leviable products play in operations, clearly outstripping any possible levy-related costs.
This could well have developed over time, but then such levies should be reduced to match permissible costs. My interpretation is that in these cases “excess” levies are being used to subsidise non-levy activities and a clear case exists for a major reduction in the levy charges, which would reduce stressful consumer costs.
As this is not my field of expertise, I would be happy to hear that I am misreading or misinterpreting something. If not, then let’s reduce levies on basic foods as a matter of urgency.
Craig Dennis Wilson Gallo Manor