Food prices soar amid drought, land expropriation

Rising oil prices and exchange rate could mean paying R3 000 for 29 basic food items in 2019 – report

FOOD prices are skyrocketing due to the drought and the falling rand, and by next year, the average South African family of four can expect to pay about R3 000 just for 29 of the cheapest food items.

That’s according to independent research group the Bureau for Food and Agricultural Policy (BFAP), which has released its baseline 20182027 data.

The impact of policy uncertainty around land reform and the drought were the central focus of this year’s report.

Western Cape economic opportunities MEC Alan Winde said rising oil prices and a depreciating exchange rate mean that the cost of fuel and fertiliser have increased, and fast growth in the agricultural sector will not be simple.

“Food price inflation is expected to increase until the end of 2019, stabilising at around 5.5%. The largest contributors to food price inflation will be meat, oils, breads and cereals.”

The BFAP report models a “thrifty balanced food basket” of 29 items, which consumers may likely buy and which combine all the food groups. Its “thrifty” basket is cheaper and includes more staple food items such as maize, beans and lentils,” it said.

The average price basket was R2 714 in 2017; between January and April 2018, it cost R2 764, while the 2019 projection is R2 928.

Winde said this year’s VAT increase has also hit consumers. “The BFAP researchers determined that the price difference in the thrifty basket at 14% VAT and at 15% VAT for a family of four was R6.35 per month. This equates to 16 single servings of maize meal.

“The BFAP researchers also considered the affordability of various meat products.

“Pilchards per single serving unit are still the most affordable meat option (although the price per single serving rose by 12% between 2015 and 2018).” He said polony is the second-most afford- able meat (which increased by 17% between 2015 and 2018), followed by individual quick frozen chicken portions.

“These, however, work out 183% more expensive per single serving than pilchards.”

The BFAP report indicates that chicken consumption is expected to expand by 27% by 2027, due to it being a fairly affordable, healthy meat source.

Beef consumption, Winde said, is expected to grow by 24% by 2027.

“I don’t think we’ve ever had a BFAP report like this one; the drought and the uncertainty around land reform have been a preoccupation in the agricultural industry and this report deals with those realities.”

Agri Western Cape chief executive Carl Opperman said the debate around land expropriation without compensation was an aggravating factor in agriculture.

“We are seeing less investment in agriculture and there are people who are asking whether they should invest in the country. Expropriation won’t work, because the problem does not lie with the farmers.

“It lies with the state that is being looted by corrupt individuals. Expropriating land will cost us dearly,” he warned.