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Price hikes a blow to poor

Cash-strapped consumers are set for another blow – a predicted increase in the price of food as a result of damage to crops from recent floods, and increases in electricity fees, manufacturing costs and global food prices.

While there is good news with the petrol price falling by up to 33c on Wednesday, it comes on the back of an almost 20 percent increase in the price of electricity on Friday. And the fuel price cut respite will be short-lived, given the likely impact of the food price hike.

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The provincial government on Friday warned that the cost of flood damage in the Western Cape was now approaching R600 million. The intensity of the flood had been “extremely high”.

The Minister of Agriculture, Gerhard van Rensburg, and local government and environment MEC Anton Bredell, met farmers in Herbertsdale yesterday to discuss the damage caused by last month’s floods.

“Bad weather has again left its mark on our province. The intensity of the flood was extremely high as flood studies indicate,” said Bredell

Van Rensburg added that a lot of agricultural land had been washed away. “We need to help farmers repair the damage before the next flood washes more soil away and makes farming impossible.”

National Consumer Forum chairman Thami Bolani said electricity and food prices were a “painful topic”. More families, he said, were turning to using candles and paraffin.

“Electricity is simply not affordable. Added to this are rising food costs, municipal rates, toll fees and transport cost. A lot of families are grappling with unemployment. Our education system is in crisis. Food security is a serious problem. Crime is being fuelled by rising figures of unemployed youth going hungry on the streets. The quality of life is getting worse.”

Economic development consultant and researcher Takura Chamuka said high energy prices could have significant consequences. “The recent floods and the energy price increases will undoubtedly be a double blow for consumers. One cannot over-emphasise the severity of the social implications of rising food prices, particularly for the urban poor.”

He said there was no doubt that the floods would have an impact on the vegetable and fruit growing communities in the Free State (which also experienced damage) and the Western Cape. “The negative impact will emanate from in-frastructure damage, disruption in the supply chain with respect to logistics and damage to the crops.”

Prices should normalise to pre-flood levels within two to four months if production was resuscitated.

Foreign markets also played a role in food prices. Although weather events had been playing havoc on world commodity markets since last year, an increase in the price of local maize-related products was not necessarily due to the floods but had been influenced by international prices.

The deregulation of South Africa’s agricultural market in 1996 had led to the domestic price of maize and other agricultural produce being dictated by world prices and exchange rates. - Sunday Argus

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