Gauteng Declares War on High Food Prices

Wednesday, 16 July, 2008 - 07:32

A recent summit explored ways of enhancing food security in Gauteng as participants sought to find solutions to rising food prices.

The Gauteng Department of Agriculture, Conservation and Environment hosted a two-day summit to look at the impact of rising costs of basic food on poverty, from 10-11 July 2008 in Johannesburg.

Known as the Gauteng Food Summit, the event was attended by over 4 000 representatives from the provincial government, municipalities, community organisations, trade unions, and NGOs.

The summit explored ways of enhancing food security in the province aimed to find solutions to rising food prices and building partnerships.

Gauteng Agriculture, Conservation and Environment MEC Khabisi Mosonkutu, said the summit was sending a message to the world that South Africans are ready fight against the escalating food prices.

Mosonkutu criticised the G8 countries for not caring about Africa, but only in its raw materials, adding that SA is ready to respond when rich countries increase subsidies to their farmers. “We must not continue to live in the chains of hunger,” he said.

Agriculture minister, Lulu Xingwana, called on South Africans to go back to farming to produce their own food. Xingwana, who favours increasing food production to alleviate the crisis, believes that communities should be encouraged to develop a culture of producing vegetables in their backyards. She encouraged South Africans to re-visit the traditional methods of saving food. “Let us move from food aid to food production,” she said.

Most delegates blamed rising food prices on competing companies conspiring to fix prices. They say price fixing gives competing companies an opportunity to sell products or services at the same price, to make “super profits” at the expense of the poor.

Responding to this, Congress of South African Trade Unions (COSATU), Gauteng secretary, Simphiwe Mgcina, called on the government to utilise the fines imposed by the Competition Commission on companies implicated in this practice, to ease the crisis. Mgcina cautioned that it is the poor who suffers the most when companies fix prices. He urged the National Prosecuting Authority to arrest chief executive officers of implicated companies. He described the Competition Commission as “a structure which does not bite.”

Mgcina, who also called on prices of basic foodstuffs to be Value Added Tax (VAT) zero-rated, noted that the price of bread has increased by 19 percent in 2008 alone.

The South African National NGO Coalition (SANGOCO) also expressed its concern. SANGOCO Executive Director, Jacob Molapisi, warned that the high food prices are deepening poverty in the country. Molapisi is of the view that poverty fuels the spread of diseases including HIV/AIDS, malaria and tuberculosis. He further argues that this is compounded if the poor are unable to afford basic food. He also slammed the Gauteng Economic Strategy for not prioritising agriculture.

Quite often the high food prices are attributed to factors such as trade restrictions, increasing energy and fuel costs, as well as the potential misuse of market power. However, agricultural experts at the conference believe that producing more food locally and cutting down on exports, can help to bring down the prices. It is worth noting that countries such as Russia, India, Serbia, Ukraine and Vietnam, have already banned food exports as an immediate measure of dealing with this crisis.

Price Increases in SA: June 2007 – June 2008

Commodity Increase (%)
Dairy  34
Wheat  10
Wheat Products  25
Meat  59
Vegetables  41
Sunflower  66

Source: Food Summit

Land reform
Land redistribution to historically-disadvantaged communities was defined as another problem that needs immediate attention. According to Mosonkutu, there is still resistance from certain farmers who refuse to sell their farms for redistribution, under the willing-buyer principle.

An article published in Business Day recently, reports that more than 100 farm owners at Geluk area near Haartebeerstpoort are rejecting offers of compensation by the Gauteng and North West regional land claims commissions, saying they are below the market value. The farms were established in 1920s, as part of land reform scheme for poor whites.

The National African Farmers Union of South Africa (NAFU), a NGO that facilitates the entry of black farmers into the mainstream agriculture, has discouraged government from allocating “land only without resources” to emerging farmers.

NAFU Gauteng President, Mamabolo Raphesu, criticised the government for failing to support emerging farmers. He is of the view that Local Economic Development (LED) cannot be realised if municipalities continue to avoid engaging farmers. “The bottom line is finance,” he asserts.

In line with this, the Mahatamaholo Agricultural Cooperative called on government to involve it in alleviating the crisis. The Cooperative says it has land in Gauteng, which it can give to young people to develop their farming skills.

Global perspective
A survey provide the name of the survey, and year conducted by the International Monetary Fund (IMF), found that while biofuels supplement traditional fuels and contribute to rural development, they push food prices up even further.

In relation to this, the South African Communist Party (SACP) has cautioned that the IMF’s view that global food production will decline by 30 percent in the next decade, leaves government with no option but to implement the resolutions taken at the Land Summit. The SACP further called on government to regulate the prices of staple food.

The organisation’s Gauteng chairperson, Zico Tamela maintains that, “The livelihoods of the working communities are under attack.”

The IMF’s view on biofuels is echoed by Lot Mlati from the United Nations Food and Agricultural Organisation (FAO), biofuels may reduce the availability of food. Mlati blames high food prices on poor harvests, high energy costs and lack of investment in the agricultural sector. He stated that 12 percent of the world’s maize is used to produce ethanol, and argued that the high food prices present an opportunity to invest in the agricultural sector.

According to FAO, people in poorer countries are spending more than half of their income on food as compared to 10 percent in developed countries.

The Summit resolved to establish a committee; comprised of food processors, farmers, organised labour, consumer bodies and wholesalers, representatives from Gauteng Provincial Government, municipalities and NGOs, to engage all the role players to find short and long term solutions  to the food crisis.

Xingwana told delegates that as part of government’s immediate intervention, her department will present a proposal developed by the Inter-Ministerial Committee on Escalating Food Prices to the Cabinet this week.

The Gauteng Food Summit Declaration is being drafted and will be available shortly.

- Pictures courtesy of Sekwale (Lordwick) Mathake, Philani Community Development Programmes

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