Interventions to deal with the food crisis: South Africa

1. Interventions to deal with the food crisis: South Africa Presented at: FANRPAN 2008 Regional Stakeholders Policy Dialogue Lilongwe, Malawi, 03 September 2008 Simphiwe Ngqangweni Senior Researcher, National Agricultural Marketing Council (NAMC) Secretariat, FANRPAN South Africa Node www.namc.co.za

2. Contents • Problem statement • Approaches to addressing the problem • Conclusions

3. Problem statement Wheat: 107.1% Yellow maize: 144.1% Soybean: 114.7% Rice: 218.4% High commodity prices

4. Problem statement Use in biofuels Increased demand for animal protein Unfavorable climatic conditions Lower availability of grains for food

5. Problem statement Feed and industrial uses have become important Competing uses of maize

6. Problem statement • Other dynamics of the problem: • Increasing purchasing power of the newly-affluent • Trade restrictions • Potential misuse of market power • Increasing energy costs • Inadequate investment in agriculture

7. Problem statement • Effects of the problem: • At country level: RSA as net staple food importer, will struggle to meet domestic demand in the long-term. • At household level: the poor are the hardest hit due to unaffordability of food. • The nutrition of the poor is also at risk • Rural areas are most affected due to high poverty rates: 54.2% (Household); 67.7% (individuals)

8. Approaches to addressing the problem • Both short and medium- to long-term interventions are required • In the short-term: • Safety-net measures: social welfare grants, food parcels, starter-packs for HH backyard gardens, school feeding schemes • These programs are in place – administrative challenges in some areas still exist. Some of these programs are currently being expanded.

9. Approaches to addressing the problem • In the medium- to long-term (expand production): • Enhance profitability and competitiveness of primary commercial agriculture: certain forms of indirect subsidies are being debated in RSA • Improve efficiency along agricultural value chains: deal with misusers of market power & price colluders, remove barriers to entry for smaller players, improve agro-logistics • Accelerate entrance of new agri-entrepreneurs: implementation of the land and agrarian reform program & dealing with institutional challenges

10. Approaches to addressing the problem • In the medium- to long-term (continued): • Create PPP’s that work (leverage private sector resources and expertise) to bring in new entrants into the mainstream economy – there are local examples to learn from • More collaborative platform in addressing trade and tariff issues • Take a (SADC) regional approach whereby greater production of staples by RSA neighbors with better comparative advantage is encouraged (in the context of the SADC FT Protocol/FTA)

11. Conclusion • A two-pronged approach: • Respond to the needs of the most vulnerable in the short-term • Exploit opportunities to expand food production in the medium- to long-term, take a regional approach • Encourage public-private partnerships