Food in Mzansi is becoming more and more expensive. According to Mervyn Abrahams, programme coordinator at the Pietermaritzburg Economic Justice and Dignity Group, South Africans must brace themselves for further increases for at least 18 more months.
In this edition of the Farmer’s Inside Track, Abrahams explains food inflation dynamics, its associated causes, and the cost of basic healthy eating.
According to Abrahams, affordability is a relationship between income and prices. This what establishes whether something is affordable or not.
“When we look at wages in South Africa, for instance, we know that more than 50% of all workers in South Africa earn at the level or below the national minimum wage, which is roughly R3 700 per month. That’s the reality, and social grants too are extremely low.”
Comparing this with the food basket which increases, it is difficult for South Africans to afford food, Abrahams says.
“Electricity increased by 15% last year and its likely to increase in municipalities around 10% this year which will make food more expensive. [This] also takes more money out of the pockets of households.”
Things are not looking up
Abrahams says that South Africa is on an increasing interest rate trajectory, which makes debt servicing much more expensive. He adds that in lower income households the four biggest expense are transport, electricity, debt servicing, and food.
Looking at the geopolitical factors that are leading to increased oil prices, which translates to an increase in fertiliser prices, their forecast is Mzansi could be in a high inflationary context for at least the next 18 months or so.
But what can be done and how can South Africa build its resilience?
According to Abraham one way in which this can be done is, “to move a lot of our logistics from road to rail. [Also] lessening the cost of transporting goods, particularly food-related goods in South Africa. That’s one potential area that we should be looking at.”
“The second area we should be looking at is a greater investment into small-scale farmers and a greater focus by government, in terms of funding models and making resources available to small-scale farmers. So that we can begin a greater process of localisation of food,” Abrahams says.
In the episode Abrahams also unpacks:
- Solutions for the agricultural value chain;
- Bridging the gap between household income and expenses; and
- Food prices increase; and more
Want to know more? Listen to the full episode of Farmer’s Inside Track
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