“South Africa’s grain farmers should not be blamed for the high prices of food.”
This was according to Grain SA CEO Tobias Doyer during the second day of the South African Human Rights Commission (SAHRC) national inquiry into the right of food on Tuesday.
Doyer told SAHRC that rising product costs, poor infrastructure and expensive transport are putting a lot of pressure on producers.
He said many South Africans believe that food has become unaffordable because farmers are charging more but argued that this is not the case.
“Our calculations currently are that producers are not making a profit, and yet many of the farmers are producing food below the cost of production,” Doyer said.
According to Doyer, wheat accounts for less than 20% of the price of a loaf of bread, while the remaining costs come from milling, baking, electricity, transport, packaging and retail.
“The cost of grain makes up only a small part of the price consumers pay for products like bread,” he said.
Doyer said rising fuel and fertiliser prices, together with poor roads and rail infrastructure, have made farming more expensive.
He emphasised that these costs affect the entire food value chain and then increase the price the consumers pay at retailers and supermarkets.
“If we have better infrastructure, it will have a positive impact on the cost, as damaged roads also increase transport costs for farmers who often move grain hundreds of kilometres to markets,” Doyer said.
The commission referred to previous findings by the competition commission that retail prices of bread and maize meal had increased more than producer prices while giving the impression that food inflation could be blamed only on production costs.
Doyer said he had not looked at the findings in detail, but he acknowledged that there were concerns about the structure of the food value chain.
“I think there are some concerns in terms of market structure that should always be watched by the competition commission,” he said.
SAHRC commissioner Nomahlubi Khwinana questioned Doyer about whether he believed that industry is investing enough in improving the nutritional value of staple foods and not only increasing production.
Doyer said Grain SA’s biggest contribution is providing staple foods like maize and wheat that are also affordable to households with less money left to buy other nutritious food, including meat, vegetables and diary products.
He said Grain SA also supports food programmes and community farming initiatives aimed at improving nutrition in rural areas.
The commission expressed unhappiness after Sparta Group, one of South Africa’s meat producers, failed to appear before the commission.
Advocate Jacques Eastes, from the Pretoria society of advocates, appeared on behalf of the Sparta group, apologised for their absence and requested a postponement.
He said the commission sent an invite on June 11 to the Sparta group’s general enquiries email address that was not monitored daily.
“The invitation only came to the attention of a Sparta employee last Wednesday, after the deadline for the written submissions had already passed,” Eastes said.
Eastes said Sparta’s board had been unable to meet because several executives are on leave as it is school holidays and the chairperson had only returned from the US on Sunday.
“Sparta also wanted to appoint senior counsel before making submissions.
“The company, however, wants to participate in the inquiry, and is willing to submit a written representation by August 14 before appearing at a later stage,” he said.
Chairperson Sandra Makoasha expressed concern over the explanation.
“The correspondence had been sent to Sparta’s listed company email address, and it was the company’s responsibility to ensure important communication reached the correct officials,” Makoasha said.
Makoasha also rejected the suggestion that its request was merely an invitation.
“As a chapter 9 institution, we have a mandate that we have to fulfil,” she said. “It does not sit well with the commission for an institution or a corporation to say it’s an invitation and therefore they can voluntarily assist or not assist.”
The commission granted the postponement, but it rejected Sparta’s proposed August 14 deadline to submit. The commission said it will set a new date and communicate with the company.
TimesLIVE
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