Industry body Agri SA has warned that government interference in the food market could lead to empty supermarket shelves.
The organisation intends to write to the Agriculture, Land Reform and Rural Development Minister Thoko Didiza to request engagement with stakeholders in the value chain on the implications of government’s stated intention of tackling food pricing.
This follows an announcement by Minister in the Presidency Khumbudzo Ntshavheni that Carbinet has directed the Economic Cluster to put in place an action plan on food prices, food security and access to food.
Food price inflation has remained high despite various input costs having decreased, mostly owing to persistently high fuel costs and loadshedding disruptions.
Agri SA says this highlights the highly complex dynamics of the food system and how, if government wants to substantively address the situation, it must begin by fixing functions within its remit – including fixing road and port infrastructure, reducing rural crime and ending loadshedding.
Agri SA is focusing its attention on food security by making it the theme of its yearly congress, which will be held on October 13 and 14. The event will discuss factors impacting food production, food accessibility, affordability and safety.
“These themes merit extensive engagement as there is no simple or single solution to the multifaceted challenges of rising food prices,” Agri SA states.
The organisation adds that government interference is no solution to rising food prices, rather, it demonstrates a misdiagnosis of the situation. Agri SA believes government is reacting reflexively which could have significantly adverse consequences.
“We know from historic examples globally that price controls, although well-intentioned, can create market distortions. By reducing the profit motive of value chain participants, these measures can reduce innovation as well as the quality and availability of products and services,” Agri SA explains.
Additionally, the organisation says it is important to distinguish between short-term price spikes and long-term market dynamics, neither of which are best addressed through broad government interference, but instead require appropriately tailored solutions.
Agri SA is calling for a nuanced approach to all the factors affecting food prices, coupled with measured and well-crafted policies underpinned by sound economic principles.
“Any interventions must strike an appropriate balance between addressing the issues identified and preserving the advantages of a free and competitive market. Agri SA is willing and available to engage government on these issues so that together, we can protect South Africa’s food security,” Agri SA concludes.