South African consumers are drowning in debt, using pay-day loans and cutting down on luxuries and their own meals to feed their children. This is in an economic climate of spiralling food and energy prices that have overtaken minimum wages, according to ordinary consumers, consumer groups and analysts following the SA Food Sovereignty Campaign’s “People’s Tribunal on Hunger, Food Prices and Landlessness”.
The tribunal, held in Johannesburg, issued a “verdict” at the weekend holding the state and food corporations “guilty of perpetuating hunger, a crime against humanity” through practices such as offering low wages, treating food as a commodity, profiteering from food and controlling seeds and farming resources.
Reacting to the verdict this week, social activists and consumer groups said consumers faced unsustainable food and energy price hikes that had led to protests around the country.
Eskom has asked the National Energy Regulator of SA for a 25.3 percent increase in electricity tariffs for 2015/16, while in April petrol increased R1.62 (14.6 percent) inland to R12.67 and R1.60 at the coast to R12.46, with further hikes expected.
According to Statistics South Africa, the Food and Non-alcoholic Beverages Index was 5.8 percent in March, while headline CPI was 4 percent in urban areas.
Food retailers Pick n Pay, Shoprite, Checkers and Massmart as well as the SA Consumer Goods Council had not responded to questions about the “verdict” at the time of publication.
Campaign organiser Andrew Bennie said the tribunal, overseen by a jury and panel of judges including Dr Pregs Govender of the South African Human Rights Commission and Dr Dorasamy Moodley of the South African Hindu Maha Sabha, had put food corporations and the state on trial. The tribunal heard testimonies from small-scale farmers, co-operatives, mining-affected communities, trade unions and the unemployed who shared stories of hunger, landlessness and injustice, as well as from food and land experts such as researchers and academics.
Bennie said the campaign aimed to highlight the plight poor consumers faced with spiralling food prices and to raise awareness regarding who was profiteering.
“The food system globally and in SA is broken and is not serving our people.”
Bennie said a woman from the Eastern Cape spoke of how she lost her job and to survive harvests juice from prickly pears to sell for a few rand.
“She is faced daily with having to deal with her children’s hunger and she can only provide them with mealie-meal.”
Pietermaritzburg Agency for Community Social Action (Pacsa) advocacy manager Julie Smith said she agreed that the state and food companies were guilty of perpetuating hunger.
“South Africa’s statistics on poverty, income, employment and inequity provide the basis for this,” Smith said.
“Our staple foods are traded and compete as international commodities just like gold and diamonds. Our basic foods have to compete on profit and financial speculation. Food companies are not benevolent entities, they are companies – they exist to make profit.”
She said poor households were “really struggling”.
“They are being forced to make terrible choices – one of which is to take food off the table. Our health statistics on NCDs (non-communicable diseases) and childhood stunting bear this out. Our clinics and hospitals are becoming overwhelmed. Workers are not eating enough energy to get them through work.”
Pacsa’s latest food price survey released in March showed the cost of a basic food basket rose R64.60 (4,1 percent) to R1 632.85 compared to January. However, the cost of a realistic basic basket of “nutritious food” to sustain a family of five was R2 743.01 in March.
Smith said the average minimum wage set by the Employment Conditions Commission for 2014 was around R2 362.36 a month, not enough to support a family, while 53.8 percent of the population lived below Stats SA’s 2015 poverty line of R779 a month.
“Low-income households prioritise non-negotiable expenses such as transport, electricity, burial insurance and education above food. Food is typically the last expense households pay,” she said.
Smith said the household debt-to-income ratio had averaged 78.4 percent last year, which meant for every R100 of income, only R22 was left for food, municipal services, education and health services.
“Middle class households – particularly black middle class households at the lower end of the middle class, are struggling.
“These households are still trying to accumulate assets – paying off home loans, cars and trying to keep up with school fees to keep their children in former Model C schools.”
Smith said the rising cost of living, including the levels of household debt, an interest rate hike and rising energy costs, threatened to push these households back into poverty.
And food and electricity price hikes at current levels were not sustainable.
“People are already taking a stand. The protests across the country are evidence of this.
“The current protests in Soweto are the type of action that says people are refusing and resisting high energy prices.
“Across the country poor people are taking electricity – not because they are criminals – but because it is the only way families can secure electricity.”
SA National Consumer Union vice-chairman Clif Johnston said many consumers were borrowing money to pay for basic expenses and were caught in the debt trap with multiple garnishee orders against their wages.
“SANCU believes the desperation that leads to violent protests is often triggered by the impact of short-term loans where relatively minor shortfalls quickly escalate into major financial crises.”
However, he said SANCU recognised profit as a legitimate business objective and competition should keep prices in check. He said the country’s economic woes were partly linked to the global economic downturn.
“The only tool consumers have is their buying power. Consumers can influence the market by consistently choosing the best value – not necessarily the cheapest option – for their needs, and not sticking to one brand for loyalty,” he said.
University of KwaZulu-Natal Centre for Civil Society director Professor Patrick Bond said debt levels were at “break point” as illustrated by the African Bank crash last year.
“Because garnishee orders and default systems favour bankers, and because so many bank and lawyer fees add up, we need a full reform of consumer debt, or (we will) be faced with the kinds of sub-prime lending crisis that broke the US and world economies in 2008.”