Agriculture and Land Affairs minister Lulama Xingwana has made it clear that South Africa won’t impose grain export bans to cap domestic prices. The minister feels that such a move would likely discourage farmers from increasing overall production output. “It would seem the minister of agriculture has finally realised the importance of agriculture as an earner of foreign revenue,” said Chris van Zyl, TAU SA’s manager of safety and security. “But government will still have to take more corrective measures such as rebates on fuel inputs to keep farmers profitable.”
Despite pressure from Cosatu, which has called for government to freeze the price of basic foodstuffs, Prof André Jooste, an agricultural economist at the National Agricultural Marketing Council, said price controls won’t bring relief to consumers. “What we need is investment in agriculture,” Jooste was quoted as saying on Talk Radio 702. “The challenge is to get people to invest, despite our volatile agriculture environment.” He added that a stable agricultural environment was needed where the challenge of land redistribution and sustainable food production was balanced. “We have to get our new black farmers to the level where they are producing food,” said Jooste. “They can especially contribute to food security in the rural areas.” Van Zyl also added that in the past, both Zimbabwe and Africa were important contributors to food security in sub-Saharan Africa. “Political instability and uncertainty in both countries have greatly contributed to food shortages in our region,” he said. Xingwana said that a long-term solution to stabilise food prices was to increase production. However, despite the Crop Estimates Committee’s latest report, which says commercial maize is expected to yield nearly 11 million tons, government still refuses to use maize as a feedstock for biofuel production. “SA could easily produce 12 million tons of maize, while it only consumes about eight million tons,” said Grain senior economist Nico Hawkins. “Without a viable market, farmers won’t produce such a large surplus because it will cause prices to drop significantly.”
World Bank Group president Robert Zoellick recently urged countries around the world not to impose food export bans (See page 12). US President George W Bush has also asked the Congress to approve US$770 million in new global food aid for the coming fiscal year, beginning in October. This brings the figure which the is likely to spend on foreign food aid in 2008/09 to nearly 5 billion. “With the new international funding I’m announcing today, we’re sending a clear message to the world that America will lead the fight against hunger for years to come,” Bush was quoted as saying in the Washington Post. I ncluded in the additional US$770 million lifeline was the 200 million worth of emergency wheat reserves released recently from the Bill Emerson Humanitarian Trust. But Van Zyl is not convinced this is an act of generosity. “When the says it will feed the world, poorer countries will become increasingly dependent on the US,” he said. “But with such a worldwide shortage and demand for wheat, that US$200 million is just a drop in the ocean.” – David Steynberg
