SA needs to expand agricultural production to boost food security and job creation, says Agbiz
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SOUTH AFRICA will need to expand agricultural production to continue improving South African food security and boost job creation in various sectors of the economy, according to the Agricultural Business Chamber (Agbiz).
This comes after The Economist released its Corteva-sponsored Global Food Security Index results for 2021 placed South Africa at 70th position out of 113 countries, down from 69th in last year and 44th in 2019.
Agbiz chief economist Wandile Sihlobo said at face value this decline might seem worrying.
However, when one looks at the index scoring's technical position, it becomes clear that South Africa is not doing as badly as the headline “ranking” suggests. In this case, South Africa's scoring remained unchanged from 2020, following a point drop in 2020 from 2019. The score came in at 57.8 in 2021, which is the same level as 2020, and down by 1.4 from 2019 in the Global Food Security Index. Relative to 2019, other countries have improved notably, resulting in the seemingly alarming deterioration in South Africa's ranking to 70.
The Global Food Security Index comprises four subindices, which are food affordability, food availability, food quality and safety and natural resources and resilience.
The affordability and availability have a higher weighting of a combined two thirds (each 32.4 percent). The affordability sub index includes a change in average food costs, proportion of a population in poverty and agricultural import tariffs. Meanwhile, the availability sub index consists of the sufficiency of supply, agricultural infrastructure, volatility in agricultural production, political and social barriers to food and food loss.
This year, South Africa experienced a mild deterioration in the food affordability and availability subindices of 0.7 and 0.1 points respectively. Meanwhile, the rest of the other subindices improved marginally. In the case of affordability, the major challenge was an overall increase in food prices. Sihlobo said the food affordability issue in South Africa was not far off from what even local researchers had observed in various surveys, including Statistics South Africa. For example, the fifth wave of the National Income Dynamics Study – Coronavirus Rapid Mobile Survey highlighted that some households had run out of money to buy food since the pandemic started, thus observing a rise in food insecurity.
Moreover, South Africa's overall food price inflation had been elevated this year, averaging 6.5 percent year-on-year in the first eight months, from 4.8 percent last year. He said that these dynamics were in line with the views expressed in this Index. “But worth emphasizing is that this challenge speaks to the rising costs of food in an environment where more people are out of work due to disruptions the Covid-19 pandemic caused in business.”
In addition, he said it was essential to highlight that the rise in food prices was a global phenomenon and not unique to South Africa.
The dryness in South America, which negatively affected the crops in the 2020/21 production season, combined with growing demand for oilseeds and grains in China and higher shipping costs, were some of the factors that have underpinned global food prices.
Sihlobo said this, in turn, supported grain prices in South Africa, hence the food price inflation was somewhat elevated in the first eight months of this year. Hence, this was a global issue rather than domestic supply constraints.
The deterioration of this subindex inconsistent with the realities in South Africa. Sihlobo said the 2020/21 production season was the second largest in history in terms of grains and oilseeds. In horticulture, the citrus industry had a record harvest, while other fruits and vegetables experienced a general improvement in output compared with the previous season.
He said in such an environment of abundant output, one would not expect a decline in the “availability” subindex. Sihlobo further argued that there was also no major change in South Africa’s agricultural infrastructure, political and social barriers to food, and food loss over the past nine months compared to 2020.
“The only notable glitch in supply chains was during the KwaZulu-Natal and Gauteng unrests and even then, it was short-lived and supply chains adjusted in a matter of days.”
For the “food quality and safety” subindex which comprised nutritional standards, dietary diversity, protein quality and food safety, Sihlobo said that it was challenging to measure in each country, which again raised concerns about the global ranking of such aspects.
He said South Africa had the product's standards regulations that guided food producers and ensured their products met the required quality. “Hence, we are not as concerned about this particular ranking, which South Africa improved on.”
The chamber said that at a technical level, the ideas of expanding agriculture and agro-processing capacity to boost growth and job creation were well established as far back as in the National Development Plan almost a decade ago. It said that they were again highlighted in the 2019 National Treasury paper.
On a regional level, Agbiz said that Limpopo, KwaZulu-Natal and the Eastern Cape, which are amongst the country’s most food-insecure provinces, also had vast tracts of underutilised land. These provinces should be a priority in agricultural development plans.
With a commercial focus where conditions permitted, agriculture improvement would help job creation and ultimately better household food security, he said.