Ensuring long-term food sustainability is a government priority

South Africa is currently one of the most food secure countries in Africa. The nation was ranked second on the continent and 44th in the world in the most recent iteration of the Global Food Security Index (GFSI), which was published in April 2014 and is based on data collected in the first quarter of 2014.

The GFSI, which is managed by US-based conglomerate DuPont in conjunction with the Economist Intelligence Unit, is calculated on the basis of three core metrics, namely affordability, availability and quality. South Africa ranks high compared to neighbouring African countries on all three counts. The nation performed particularly well in the sub-categories of food consumption as a share of household expenditure, public expenditure on agricultural research and development, the existence of national dietary guidelines and presence of the formal grocery sector.

Rankings aside, South Africa faces a number of challenges to its food security. As of 2011 more than 20% of the population lived in extreme poverty, according to a 2014 report by government data agency Statistics South Africa, while 46% were living in moderate poverty. A considerable percentage of this low-income population cannot afford to buy food. According to the South African National Health and Nutrition Examination Survey, released in 2013 by government organisation the Human Sciences Research Council, 26% of the population experienced hunger on a regular basis, while an additional 29% of the population was at risk of experiencing hunger. “South Africa generally produces relatively inexpensive, high-quality food, and a lot of it,” John Purchase, the CEO of the Agricultural Business Chamber, told OBG. “So the issue is not that food is too costly or that we do not have enough, but that some people do not have enough money to afford the available food. This is a broad socio-economic issue as opposed to a narrow agricultural issue.”

Trading Places

Historically South Africa has been mostly self-sufficient and relatively food secure in most categories. It has been a net exporter of food on an annual basis for the past century, and remains so. In the past the value of exports and imports have fluctuated dramatically, depending on crop yields. In 1980, for example, food exports were 5.6 times more valuable than food imports, but just four years later the two were nearly on par. Yet the long-term data shows an inexorable trend towards parity between the two figures, and most local players agree that it is only a matter of time before South Africa becomes a net food importer. In 2012 it exported R55.2bn ($5.2bn) of food and imported R53.1bn ($5.03bn). According to preliminary 2013 figures, however, exports jumped dramatically to R72.5bn ($6.87bn), while imports grew only slowly on the previous year, reaching R57.3bn ($5.43bn).

Imports & Exports

According to the Department of Agriculture, Forestry and Fisheries (DAFF), South Africa’s top-five agricultural export earners in 2013 were citrus fruits, which brought in R9.3bn ($880.1m) over the year; wine, with R7.9bn ($748m); maize (R6.2bn, $587m); apples, pears and quinces (R5.9bn, $558m); and grapes (R5bn, $473m). The largest five imported agricultural products by value in 2013 were rice, at R6.28bn ($594m) over the course of the year; wheat and meslin (R4.02bn, $380m); poultry meat (R3.89bn, $368m); undenatured ethyl alcohol (R3.76bn, $356m); and oil-cake and other solid residues (R3.17bn, $300m).

In 2012 a majority of South Africa’s agriculture exports went to other African nations for the first time in the country’s history. Europe, which has been the leading destination for South African food exports for decades, has seen a drop in demand in recent years, due in part to the after-effects of the international economic downturn that began in 2008. Many African countries have seen solid growth in consumer demand over the same period as a result of steadily rising incomes among large swathes of the population. The expansion of a handful of South African supermarket chains – including Pick ‘n’ Pay, Shoprite and Woolworths – across the continent over the past decade has also driven consumer demand. According to the Bureau for Food and Agricultural Policy (BFAP), a collaborative entity made up of nearly 40 public and private sector researchers from South African universities, in 2012 African nations took R17.3bn ($1.64bn), or 31.2%, of South Africa’s total agricultural exports, compared to R16.6bn ($1.57bn), or 29.9%, that went to the EU member states.

The five largest export markets for South African agricultural products in 2013 were the Netherlands, which purchased R7.6bn ($719m); the UK, with R6.3bn ($596m); Zimbabwe, with R5.6bn ($530m); Mozambique, with R4.3bn ($407m); and Japan, with R3.5bn ($331m). At time of press it was unclear whether a majority of the country’s food exports went to African as opposed to European nations, as in 2012.

In 2013 South Africa’s five largest trading partners in terms of agricultural imports were Argentina, with R5.54bn ($524.6m); Brazil, with R4.73bn ($447.9m); China, with R4.53bn ($428.9m); the UK, with R3.84bn ($363.6m); and the Netherlands, with R3.13bn ($296m).

In The Way

Various factors have the potential to impact South Africa’s food security. Input costs – including electricity, equipment, fertiliser, transport and security – are high across the board, and in many cases are expected to continue to rise in the coming years.

In 2013 state-run power utility Eskom, which supplies 95% of South Africa’s power, won government approval to raise electricity prices by 8% annually until 2018. Then in 2014 it was announced that the prices will rise by 12.69% in April 2015, with the initially agreed 8% proving insufficient. This follows average annual price rises of more than 25% between 2006 and 2012, as the utility sought to finance $51bn in spending through 2017 (see Energy chapter). In February 2013 the Department of Labour (DoL) announced a mandatory minimum wage increase for farm workers in excess of 50%, which was heralded as a victory by trade unions, but represented a challenge for commercial farmers. In early 2014 the DoL announced another minimum wage increase for farm workers, this time of 6.4%.

Water

A handful of resource-related and environmental issues also pose a challenge to South Africa’s long-term food security. Water scarcity is a major concern: the country receives just half the global average annual rainfall, and had allocated 95% of its available fresh water resources by 2005, according to government data. “We get 600-700 mm of rain per year in most of the arable parts of the country, which is sufficient for now, but just barely,” said Aart-Jan Verschoor, the senior manager of the economic and biometrical services department at the Agricultural Research Council. “We have not had a national drought since 1992, but we regularly have regional droughts and shortages.” Around 60% of the country’s limited water supply is used by the agriculture sector. Potential future stressors on water supply include climate change and rapidly growing demand in the industrial and agriculture sectors.

Finally, the ongoing debate over land reform has the potential to negatively impact the country’s food security (see analysis). “The question of who owns or is entitled to use the agricultural land is closely related to water rights and the overall productivity of the sector,” Hans van der Merwe, the executive director of Agri South Africa, an employer’s association, told OBG.

In The Works

In recent years the government has launched a handful of policies aimed at shoring up South Africa’s long-term food security. In late 2013 it announced the creation of the Fetsa Tlala Integrated Food Production Initiative, a joint project developed by the office of President Jacob Zuma and managed by DAFF and related government entities.

Under Fetsa Tlala (which translates as “eradicate hunger”), the government aims to aid the 20% of the population that lives in extreme poverty – and, consequently, is largely food insecure – by encouraging the establishment of new smallholder and subsistence farming operations. “We are encouraging people to go back to farming,” President Zuma told local media in December 2013. “We are encouraging every household to establish a food garden. We want to see women’s cooperatives and community groupings focusing on vegetable production, livestock or chickens to earn a living and fight hunger and poverty.” Under the initiative the government has freed up R2bn ($189.4m) to support new agricultural activity, with the goal of adding 1m ha of productive land by 2019. The programme will focus on the planting of maize, beans and potatoes.

In August 2013, before the introduction of Fetsa Tlala, DAFF, with the Department of Social Development, had launched the National Policy on Food and Nutrition Security (NPFNS), a national plan that aims to “ensure the availability, accessibility and affordability of safe and nutritious food at national and household level”. The plan builds on previous initiatives, notably the 2002 Integrated Food Security Strategy, which brought together existing programmes under a unified policy framework. The NPFNS is organised around four strategic areas: targeted public spending on social programmes; an increase in food production and distribution; support of community-based, smallholder and subsistence farmers; and use of trade measures and other market-based activity to promote food security.