Is SA in a disaster zone?

from The Mercury

South Africa could be facing a disaster as food and petrol price increases rock the economy - unless urgent measures are taken, experts have warned.

Professor Carel van Aardt, of Unisa, said: "Food price inflation has become a world-wide problem, and its impact on a country like South Africa, where nearly half of all households exist at or below the breadline, will be severe.

"Typical poor households do not only face a single crisis of limited monetary resources, but rather a multiplicity of challenges, including high crime levels, HIV/Aids, inadequate housing conditions, load shedding and many others. Food insecurity is now being added to that list."

Van Aardt said that this would need to be "managed very well to ensure that it does not become a disaster".

Morne Oosthuizen, of UCT, said poor households will come under "extreme pressure", while "many middle-class households will struggle too".

South Africans are notoriously poor savers, he points out, and rising interest rates coupled with high fuel and food prices could result in a "very serious problem".

Dr Miriam Altman, of the HSRC, said this crisis will have tangible short, medium and long-term effects.

"Food accounts for a large proportion of household spending in poor communities," she says. "It is possible that the quality and quantity of food bought will decline, as well as the ability to spend on other items such as school clothes."

She said the long-term effects will arise where nutrition, particularly for poor children, worsens.

"Low levels of nutrition can damage a child's development and this weakens potential educational attainment and employment participation. Serious policy attention (is) needed to avert a greater crisis."

Brian Williams, who runs a labour relations consultancy, said the price rises are going to have a direct impact on employment figures.

"Price-fixing of food in South Africa, coupled with a host of other problems, suggests that we are in a disaster zone," he said.

"Companies are in business to make profits and to reduce costs, and retrenchment in certain areas of the economy will be unavoidable."

Dean Hand, managing director of Feedback Food Redistribution in Cape Town, said her organisation is seeing "far more applications for food donations" than before.

"I see a disaster looming unless there is a strategic approach taken to this problem," she said, adding that moves are afoot to develop a strategic approach involving NGOs (working in hunger relief), the government and the food industry. It will take some months to reach fruition," she said.

Meawnhile, Agriculture Minister Lulu Xingwana has tabled "drastic" measures in Cabinet aimed at alleviating the impact of rising food prices on the poor.

However, neither Xingwana nor her acting director-general, Dr Emily Mogajane, would give details.

Government spokesperson Themba Maseko said some of the interventions would focus on providing a safety net for the poor, strengthening poverty alleviation programmes such as school feeding schemes, and promoting agricultural production and investment.