The drought and rapid depreciation of the rand have led to a rise in food prices, hitting poorest South Africans hard.
According to the latest annual baseline produced by the Bureau for Food and Agricultural Policy (BFAP), the monthly cost of a basic food basket rose by 23.8% between April 2015 and April 2016.
The BFAP baseline offers insight into key trends in areas including production, consumption, trade, food prices and jobs in the agriculture sector.
The research provides medium and long-term projections for various industries in the South African agriculture sector.
Researchers from the Universities of Pretoria and Stellenbosch, as well as the Western Cape Department of Agriculture, collaborate to produce the report.
“In 2015, there was a 15% drop in production here and in Limpopo due to the drought. In terms of livestock, there has been a 15% reduction in the national herd. There’s been increased slaughtering during the drought and this will continue to impact production for the next three to four years,” said Alan Winde, Minister of Economic Opportunities, in an opening address at the launch of the report.
The report puts forward that since 2003, there has not been a supply shock comparable to the drought of the 2015/2016 planting season, when combined with the rapid depreciation of the exchange rate.
It noted that the rand remains the “greatest risk” to inflation.
Key insights on consumers include:
- The cost of a basic food basket, including staples such as rice and brown bread, was R3,503 in April this year, which is unaffordable to the poorest 40% – 50% of the population;
- This monthly cost of a basic food basket rose by 23.8% between April 2015 and April 2016;
- Credit applications increased by 98% since 2009; and
- Food inflation is estimated to average 10.75% in the first three quarters of 2017
Minister Winde said the report also found that the agriculture sector remains one of the most significant employers in the country, creating 50,000 jobs in the national agriculture sector since 2011.
The report warned that growth was being threatened by red tape and a low success rate for land reform projects across the country.
“The BFAP is an excellent tool to assist in identifying priorities to grow the agriculture sector. Trends show that the Western Cape is on the right track in terms of addressing these, having selected the reduction of red tape and accelerating the pace of land reform as focus areas.”
Climate change was also identified as a concern for the African agriculture sector.