Call to remove VAT on sorghum gains momentum

The push to remove VAT on sorghum is gaining traction in South Africa as industry stakeholders, including Grain SA, advocate for policy changes to support food security, affordability, and industry sustainability.

Sorghum is an indigenous African crop, primarily consumed by lower-income households. According to Grain SA, the estimated R238 million in VAT collected annually on sorghum could instead be redirected to strengthening the industry, preserving jobs, and ensuring long-term sustainability.

Marguerite Pienaar, a junior economist at Grain SA , said sorghum, a niche crop in South Africa, holds significant nutritional and agricultural value.

"Some of its benefits are that it is a nutritious cereal that is gluten-free, contains high amounts of dietary fibre (whole grain) helpful in digestion, and supports a healthy diet. It is also good for the prevention of celiac disease and allergies, obesity, and provides sustained energy to the body,” she said.

With its resilience to climate change – withstanding drought, heat, and waterlogging – sorghum is a viable alternative to maize. It is currently the most widely cultivated crop in sub-Saharan Africa. In South Africa, it is traditionally consumed as breakfast porridge and a key ingredient in traditional beer brewing.

Marguerite Pienaar is a junior economist at Grain SA. Photo: Grain SA

The VAT-free sorghum campaign

Pienaar explained that sorghum production in South Africa has declined steadily over the past two decades, attributed to reduced demand and limited advances in yield potential.

Recognising its nutritional value and climate adaptability, the department of science and innovation (DSI) launched a feasibility study titled "Establish market opportunities for sorghum in South Africa". The study identified key challenges and proposed several interventions, including the removal of VAT on sorghum.

"Among the recommendations, it was advised that a sorghum cluster be established to implement the programmes, including the following: removal of VAT on sorghum, germplasm development, [the] establishment of an agro-processing facility and creating awareness campaigns. Additional initiatives under discussion included quelea management and marketing opportunities," Pienaar explained.

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Financial burden on consumers

Despite sorghum’s many benefits, its affordability remains a concern due to the 15% VAT levied on it. "This is regrettable as sorghum has numerous health benefits and a big role to play in a more balanced diet, particularly amongst the lower living standards measure (LSM) groups, that don’t have the buying power to access additional nutritious supplements," said Pienaar.

According to Pienaar, the VAT on sorghum makes it more expensive compared to substitute staples, further discouraging consumption and exacerbating production declines.

If VAT were removed, producers and consumers would benefit, she noted. "The sorghum industry believes that relief in terms of VAT on sorghum-related foods could have a far more positive contribution in improving South African households’ food security. People with diabetes can also use sorghum as staple food, as other staples are not good for their health."

Additionally, a revitalised sorghum industry could prevent further job losses and open economic development opportunities. "Farmers should incorporate sorghum as part of their crop rotation systems and other stakeholders such as consumers should incorporate sorghum into their everyday dishes," Pienaar recommended.

VAT exemption will benefit entire value chain

Efforts to remove VAT on sorghum have been attempted in the past without success. However, Pienaar believes that this time, a collaborative, multi-stakeholder approach – including government backing – could make a difference and benefit consumers and the entire value chain.

Meanwhile, Thabile Nkunjana, a senior economist at the National Agricultural Marketing Council (NAMC), said sorghum is a crop that South Africa cannot afford to lose. Despite its nutritional benefits, sorghum production has significantly declined over the years.

Thabile Nkunjana is a senior economist. Photo: Supplied/Food For Mzansi

"Sorghum production as a percentage of land fell by 57% between 1937 and 2023. One of the contributing factors is the 15% VAT on sorghum, which makes it less competitive compared to staple grains like maize. This, in turn, limits food diversity and consumer choice, particularly for low-income households who typically face food insecurity, particularly during times of high inflation and slow economic growth in the nation," Nkunjana explained.

However, sorghum has shown remarkable resilience. "Even though sorghum hasn't gotten much attention compared to crops like wheat, soybeans, or maize, yields per hectare have improved dramatically, demonstrating the crop's potential for growth.

"Few crops have performed as well as sorghum, which saw a rise in production per hectare from 0.73 tonnes in 1937 to 4.4 tonnes in 2021. Consumer awareness campaigns will be crucial in increasing uptake, as South Africa imported 99 000 tonnes of sorghum in 2023 despite its declining local production. Removing VAT would be a good first step in reviving this wonderful crop, but additional work would be required later on because poor demand or utilisation has been one of the main problems limiting sorghum," said Nkunjana.

Chefs back VAT-free sorghum campaign

Chef Siphokazi Mdlankomo from Cape Town has voiced her support for the VAT-free sorghum campaign, citing its potential to encourage greater consumption of this nutritious and indigenous grain in South Africa. "I think VAT-free sorghum will encourage the consumption of sorghum in SA as we all are aware that nowadays, food is expensive.

Chefs Sipho Mdlankomo and Pumla Brooke-Thomae share their support for VAT-free sorghum. Photo: Supplied/Food For Mzansi

"Another important factor is that people need to be informed about sorghum, as nowadays there’s a percentage of people that don’t know the uses and benefits of sorghum as it hasn’t been used a lot."

Reflecting on her upbringing, Mdlankomo recalled a time when sorghum was widely cultivated and consumed. "Back in the days where I come from, there were huge fields of sorghum, and it was used a lot in so many things – making bread, porridge, mixed with beans, and added into umqombothi."

Pumla Brooke-Thomae, a chef and cookbook author, echoed these sentiments and said incorporating sorghum into household meals is long overdue. "Sorghum is an underutilised treasure in South Africa, and making it VAT-free will encourage its consumption and introduction to younger generations," she said.