Statistics South Africa reported much higher figures for consumer food price inflation than some had expected. In April 2021, the country’s consumer food prices were at 6,7% year-on-year, the highest level since July 2017.
Most food-insecure provinces also have vast tracts of underutilised land. These provinces should be a priority in the agriculture and agro-processing master plan. With a commercial focus where conditions permit, agriculture improvement would help job creation and, ultimately, household food security.
South Africa is a food secure country at national levels. Still, the household level is food insecure, and the numbers increase because of the pandemic’s economic shock. There are risks to the country’s food security, which policymakers, farmers and agribusiness will need to monitor closely.
South Africa’s food price inflation softened to 5,6% y/y in January 2021, from 6,2% y/y in the previous month. The deceleration was in most product prices in the food basket except for bread and cereals, which accelerated from the levels seen in December 2020. Nevertheless, this was overshadowed by the slowing price inflation in meat; fish; milk, eggs and cheese; fruit; and vegetables.
The current increases in agricultural commodity prices is a global issue, but an expected sizable South Africa’s maize harvest could help ease price pressures in the coming months.
2020 has been an eventful year, yet with broadly positive results for agriculture — with the exception of the wine and tobacco industries. I look to 2021 with hope for yet another strong performance for agriculture, underpinned by a favourable production season, though the growth numbers are unlikely to be double digits in part because of base effects.
Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) and the author of “Finding Common Ground: Land, Equity, and Agriculture.”
Sihlobo is Senior Lecturer Extraordinary at the Department of Agricultural Economics at Stellenbosch University.
He is also a Visiting Research Fellow at the Wits School of Governance, University of the Witwatersrand.
He holds a Bachelor of Science degree in Agricultural Economics from the University of Fort Hare and a Master of Science degree in Agricultural Economics from Stellenbosch University.
Sihlobo was appointed as a member of President Cyril Ramaphosa’s Presidential Economic Advisory Council in 2019 after serving on the Presidential Expert Advisory Panel on Land Reform and Agriculture between 2018 and 2019.
He is also a member of the Council of Statistics of South Africa (Stats SA) and a Commissioner at the International Trade Administration Commission of South Africa (ITAC).
Sihlobo is a columnist for Business Day and Farmers Weekly magazine.