concerns remain about the functioning of SA’s food markets and related commercial value chains.
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- The Competition Commission has compiled a series of reports to monitor essential food pricing.
- The latest report focused on the impact of the Covid-19 pandemic and related economic crisis on food markets in SA.
- At the same time, the report says a global “buy local” trend holds opportunities for small-scale farmers.
The number of farmers in SA is declining, with a notable drop since the start of the Covid-19 pandemic. And those that remain – especially small-scale farmers – face ongoing challenges.
Dairy farmers alone have dropped in number by more than two-thirds in the last 14 years, from 3 899 in January 2007 to 1 053 in January 2021.
This is according to the latest in a series of Essential Food Pricing Monitoring reports issued by the Competition Commission. The latest report focused on the impact of the Covid-19 pandemic on food markets in the country.
The report says small-scale and emerging farmers were particularly hard hit by poor yields and low productivity, and struggled to grow their operations. Barriers include access to finance, infrastructure and routes to market.
On a more positive note, since the onset of the Covid-19 pandemic, there has been a global trend towards the localisation of farming and shorter supply chains, the report said. Customers are increasingly “buying local” because of climate and environmental concerns, food safety, quality and logistical considerations.
The Commission says this trend could favour small-scale and urban farming operations – especially since shorter supply chains can save transport and other costs.
According to the report, there have been clear price increases for products such as potatoes, tomatoes and cooking oil, though these were not linked to the progression of the pandemic – rather, increased frequency in extreme weather events likely drove high food price inflation.
“[T]here is no apparent link to the progression of the pandemic and the Covid-19 third wave has not demonstrated any panic buying that has driven price changes,” the report reads.
But the commission says concerns remain about the functioning of SA’s food markets and related commercial value chains. It says ongoing monitoring of prices for essential foods is critical for the welfare of citizens, especially poorer consumers.
Agriculture is one of the designated sectors for amendments to the Competition Act aimed at levelling the playing field for smaller participants and preventing exploitation by dominant entities.
But this may not be enough, according to the report.
“Market structures and practices in South Africa’s agricultural value chains may need to change if government’s transformation efforts and aims to grow agriculture for economic recovery are to be effective. Efforts should not just focus on ensuring that small scale participants can scale production over time to become more sustainable,” it states.
“Efforts should also be focused on addressing market features to provide space for sustainable small farming units and put in place support mechanisms to support sustainable entry of small-scale farmers.”