NATIONAL AGRICULTURAL MARKETING COUNCIL
INPUTS INTO THE PUBLIC HEARING FOOD SECURITY WORKSHOP
1. For food security to be realised, the following should happen;
- Price affordability
- Physical availability at the right place
- Must be nutritious
2. NAMC supports food security through promotion of objectives of the Marketing of Agricultural Produces Act.
2.1 Objectives of the Act.
- Increase of market access for all market participants
- Promotion of efficient marketing of agricultural products
- Optimisation of export earnings from agricultural products
- Enhancement of the viability of the agricultural sector.
- NAMC promotes food security by promoting the above objectives
- Monitoring the impact of deregulation
- Recommending and monitoring the impact of statutory measures
- Conducting an outreach programme aimed at sensitising emerging farmers about deregulated market environment to become market oriented and link them with commercial farmers.
To this end we have initiated many investigations into the impact of deregulation such as the food security study.
3.1 NAMC Study on the Impact of Market Deregulation on Food
Security in South Africa
Two main elements:
- Field survey and analysis of the data
- Desk review of the literature and economic trends in South Africa.
Survey carried out between April and July 2001. Data from the survey can be used as a valuable baseline for future analysis.
3.2 Main Findings:
- Very difficult to separate out cause and effect (many other factors at play apart from market deregulation)
- Farm gate prices down, yields up
- Farm employment is down
- Costs in supply chain have biggest impact on retail price
- Shifting consumer patterns due to accessibility of alternate supply
- Deregulation has helped make agriculture in S.A. more efficient
- No major effects on small holders
- Income remains the most important determinant of Food Security
- Households headed by wage earners have the greatest income stability, followed by pensioners and farm workers. Households headed by the self-employed are the most vulnerable.
- Pensions (and disability grants) play a very important role in supporting rural and low income South Africa. Although pensions are relatively low they represent a significant and steady source of income for many families in rural areas. The danger is that average age of pensioners is 70, implying that they will soon cease to be a source of income for their families There is good physical access to food.
- Regular supplies available
- Most household dependent on purchased food (deficit producers)
- Products sold not affected by deregulation
- Self-employed, pension workers and unemployed tend to supplement their purchases with own production
- No evidence of an adverse effect on consumers
4. Food Price Monitoring
We initiated food price monitoring during May 2002; eventually the Food Pricing Monitoring Committee (FPMC) has been established as per Cabinet decision. As from December 2002 the survey has been expanded to all nine provinces. Food price monitors were appointed in all provinces and have started monitoring and supplying NAMC with data on a monthly basis. Basic food prices are being monitored and obtained from six (6) collection or monitoring points, two (2) in rural areas, two (2) in peri-urban (township) and two (2) in the city/town from each of the nine provinces. This exercise is being done in conjunction with provincial department of agriculture.
The Minister for Agriculture and Land Affairs inaugurated the FPMC on 20 January 2003. The Committee had its first meeting on 24 February 2003 and Committee members were allocated responsibilities. The next FPMC meeting has been scheduled for 10 April 2003. The FPMC’s first report will be made available to the Minister by May 2003.
- Terms of Reference for the Food Pricing Monitoring
- To monitor the prices of a basket of basic food items which include among others maize meal, eggs, bread, milk and meat.
- To investigate any sharp or any unjust price increases.
- To investigate price formation mechanism in supply chains of these basic foodstuffs including the following analysis:
- Number of producers and processors and level of concentration.
- Extent of vertical/horizontal integration and competition/concentration in the food supply chain.
- Gross margin analysis at each node of the food chain.
- Establish the magnitude of differences between urban and rural pricing structures and the causal factors thereof;
- Report on the pricing structure of certain food chains.
- Determine the ratios of the prices to costs and profits.
- To review the effectiveness of government research, monitoring and information dissemination on food prices.
- To establish and maintain a national food-pricing monitoring database.
- To monitor, through relying on existing information and monitoring systems, the regional SADC food situation.
- To investigate incidents of predatory and monopolistic tendencies in collaboration with the Competition Commission. This will include investigating discriminatory and any unfair business practices in the basis food value chain.
- For food security to be realized, we believe the following should be done;
(a) Total farmer support services :
- Marketing services
- Production services
(b) Complete infrastructure in black areas for commercialisation of black agriculture
(c) Protection of farmers against dumping and subsidised products
- Regular revelation of stock level of grains including imports and
exports of grains.
- Appoint a national co-ordinator to co-ordinate and drive food rural
development in general.
M G RATHOGWA
NATIONAL AGRICULTURAL MARKETING COUNCIL