Improved weather, stronger rand could decrease food inflation, according to the

Food inflation is set to decrease this year as improved weather conditions in some parts of the country and a stronger rand are projected, according to the latest analysis from the Bureau for Food and Agricultural Policy.

Alan Winde, Minister of Economic Opportunities, this morning (4 August 2017) delivered the opening address at the release of the BFAP Baseline 2017 – 2026, titled “Managing Agriculture’s Footprint in an Uncertain Environment”.

The BFAP Baseline is jointly funded the Western Cape Department of Agriculture and ABSA Agribusiness. It offers projections for the sector, under a set of potential scenarios.

Minister Winde said the impact of the drought on the sector is clear.

“BFAP’s analysis finds that while some summer rainfall regions, such as the Free State, North West and Mpumalanga, are in recovery, the situation remains critical in the Western Cape. We are preparing for significant long-term impacts in high-value export industries, such as our pome and stone fruit industries which are already reporting lowered export volumes compared to last year and these could lose up to R300 million in income-losses with current water shortages in the region.

“The report also illustrates the importance of irrigation schemes during this period, in the Berg River and Riversonderend irrigation schemes, 36 000 jobs would be placed under threat without access to water.

“These trends underscore the need for strategies to mitigate the impact of climate change, which is why we have partnered with the Department of Environmental Affairs and Development Planning, and the private sector, to develop the SmartAgri plan.”

The report highlighted the following:

• The cost of the staple component of the food basket increased by 22% between April 2015 and April 2016. This refers to all staples (grains), and includes maize meal, bread, rice potatoes and wheat flour. However, the expectation is that a 16% decline is forthcoming;
• Global maize harvests reached record levels in 2016, but due to the drought, the maize crop in South Africa was the smallest since 2007;
• Meat prices could increase, as reduced herd sizes due to forced sales during the drought will put pressure on limited supply;
• In April 2017, the cost of a “thrifty basket” (which has a high amount of starchy foods and fats and oils) amounted to R3 461 per household per month. This is expected to rise to R3616 by next year;
• Land reform progress was also measured, and it was found that 18 million hectares out of 82 million hectares had been transferred from white to black ownership;
• Focusing on the continent’s growth, it is estimated that Africa’s population will grow from 13% to 35% of the world’ population, more than doubling between 2015 and 2050.

Minister Winde said: “BFAP’s report sets out what government must do to sustain and grow agriculture. To accelerate the pace of land reform, the analysis notes that the lack of a comprehensive register of land reform statistics remains a challenge. We cannot track our progress if we cannot measure it. This is why the Western Cape Department of Agriculture is conducting a province-wide audit of land reform projects, which is set to be complete next year.

“The report also highlighted the importance of investment into research and development as a strategy to increase production. This is an important focus area for us, and we are already seeing the benefits. During the irrigation season we provide irrigators with near real-time data on the actual crop water use and water shortages experienced by their crops through the FruitLook project. Using only satellite data and weather station data, we can tell farmers how much water their crops used in the previous week and whether the crops experienced any water deficits.”

For the full report, kindly visit: https://www.westerncape.gov.za/news/food-inflation-could-decrease-according-latest-outlook-sa-agriculture