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DA: Statement by Lourie Bosman, Democratic Alliance shadow minister of agriculture, forestry and fisheries, calling for a review of the export regulatory framework for maize (12/01/2012)

12th January 2012

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Avoidable maize shortages – through shortsighted export arrangements – have pushed maize prices to record highs. This is having a devastating effect on the poor as it undermines South Africa’s food security and pushes up the cost of goods.

As it stands, there is no more locally produced maize because it has all been cheaply exported, leading to a reliance on expensive imported maize.

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I have today written to the Minister of Agriculture requesting that she review the regulatory framework that governs maize exports. Any such undertaking must be done in consultation with grain producers.

Maize prices currently cost the local consumer roughly R2,600 a tonne, around double the price of one year ago. The price is expected to cross the R3,000 threshold within days. This is as a result of cheaply exporting maize at R1,400 a tonne to overseas consumers.

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The maize shortage and consequential increase in the local maize price is placing a crushing burden on poor families.

Minister Tina Joemat-Pettersson has dismissed these concerns as a simple result of ‘market dynamics’. This assessment is both hollow and superficial. We are strongly in favour of promoting an efficient and globally competitive maize industry. However, a strange obsession with exports at the expense of local food security is hard to understand. The broader transaction costs of resulting food price inflation render the practice economically senseless.

While official CPI data indicates an inflation rate of around 5%, the true figure for the majority of citizens is much higher. Food costs constitute the largest portion of most South Africans’ budget, and maize is a significant component of that food cost. 100% inflation in the maize price has a real effect on real people that is simply not captured by official data.

Government must take the lead in implementing a fair mechanism that requires grain exporters to indicate how much grain will leave the country before the transaction is carried out. We must not undermine the livelihoods of farmers and farm workers, but we cannot allow people to go hungry either.  

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