Image Source: The Citizen
Local – According to the Competition Commission, South Africans are grappling with real strain at the till, with staples such as eggs, chicken, cooking oil and maize meal increasing at rates officials describe as unsustainable. Shoppers doing weekly or monthly grocery runs say their bills keep climbing even when their lists stay the same.
Bennie van Zyl from the Transvaal Agricultural Union of South Africa (TLU SA) said what consumers are going through cannot be separated from what is happening further up the chain, where farmers are struggling to stay profitable. He pointed to input costs, a weak economy and policy uncertainty as the real drivers behind rising prices on supermarket shelves.
“We need a productive, profitable farmer to stay in production to bring the food to the market. A lot of our farmers just don’t cope anymore to be profitable so that they can be sustained in their production process. And the price at the end of the day is the consumer.”
Where The Money Goes
Very little of any price increase actually reaches the farmer, according to Van Zyl, who said milling, distribution and packaging absorb a large share before food reaches store shelves. He said that when the cost of producing food drops, retailers are often too slow to lower their prices in response, and consumers end up paying more for longer than they should.
Van Zyl argued that a faster pass-through of falling costs would allow demand to respond and make food more affordable, rather than leaving retail prices elevated even after the pressure on producers has eased.
“We have too many people who don’t work, and they are dependent on social grants. That’s not sustainable. So South Africa pays a huge price for that, and that’s a not growing economy.”
Van Zyl called for policy built on economic principles rather than ideology, warning that unresolved corruption and crime will keep holding back the investment and growth needed to bring food prices down for consumers.
