Are we one faileD crop away from starvation?

With increasingly adverse weather, are we one storm or drought away from food insecurity?

LINDI BOTHA investigates how stable the food supply in South Africa really is

Empty fresh produce shelves greeted consumers in the United Kingdom in February, after a perfect storm of adverse weather and the huge jump in energy costs led to shortages of items like tomatoes, peppers and cucumbers.

The question many are asking is whether they might face a similar fate as the United Kingdom, especially since the challenges are global. While high food prices are increasingly an issue, the February shortages highlighted an even greater concern: a complete absence of food due to farmers choosing not to produce amid high input costs. Just how far away are South African consumers from empty food shelves?

Factors of concern

Stable food production depends on myriad factors, from input costs and availability to weather, value chain infrastructure and politics. Mandla Mpofu, managing director of agriculture at Omnia, states that while geopolitical, economic and environmental factors affect the food chain, logistics, infrastructure (including power and other utilities) and geopolitical instability are the most concerning. “The industry relies heavily on ef cient movement of goods and services, without which we are vulnerable to supply-chain disruptions if business does not suitably plan around ongoing ux.”

Looking at inputs, the share of production costs attributed to fertiliser is around 20–35 per cent, according to Mpofu. Since 70 per cent of fertiliser is imported, the exchange rate is signi cant and has led to substantial cost increases over the past few months.

Another factor set to impact the cost and availability of food in future is climate change, where hedging against risk will add substantial costs for food production in a climate where a good harvest is not a given. At the extreme end of the spectrum, farmers could exit the industry completely as conditions become unconducive to farming.

Managing risk

Resilience and risk management play a key role in ensuring that should farmers lose their crop, they can still plant another without losing their farms. Hedging this kind of risk means farmers not only have to have insurance in place, but enough of a buffer in their bank accounts to see them through devastating events. This comes at a substantial additional cost.

Lof e Brandt, head of sales enablement at Absa AgriBusiness, notes that the use of multi-peril policies has declined over time, due to price and low demand. “However, larger farmers who have access to scale are in a better position to afford the formal risk-management products available in the market. They are also usually better positioned to make use of the other risk-mitigation strategies.”

That said, Brandt believes that there is limited risk to food security from adverse weather. “Production systems in South Africa are well developed, and history has shown that even during times of drought, food availability is not a big issue. Farm-management practices have also evolved over time, putting many farmers in a position to produce and withstand drier years better.”

Infrastructural issues

Looking at necessary infrastructure in the value chains, a lack of maintenance at South Africa’s national fresh produce markets has been highlighted as a threat to food security. Since the markets offers a crucial mechanism to distribute fresh produce and set fair prices, their optimal functioning keeps farmers in business.

Jaco Oosthuizen, CEO of the RSA Group, notes that in several

Threats To Food Security In South Africa

• Only 3 per cent of South Africa’s land being truly fertile land, compared to India’s 53 per cent

• Rising input costs and dependence on external factors that farmers cannot control, such as the oil price and the exchange rate

• Looming water scarcity and increasing loss of soil

• Lack of subsidies and extension support

• High murder rate and increasing tenure insecurity

• Predicted negative long-term climate changes

Source: World Wildlife Fund regions the infrastructure crisis reached a tipping point last year. “If action isn’t taken very soon, a system collapse is possible, although it’s important to remember that private facilities are emerging in many areas to pick up the slack.”

Oosthuizen says that the impact of this is signi cant in terms of costs to the consumer.

“Players across the value chain are being forced to take extra measures to mitigate market failures and ensure product quality. Reinvestment by government in the supporting ecosystem is the crucial food security pillar around which all others take shape. If the revenues government received from the markets were reinvested in the system, producers would remain competitive and have a good incentive to keep producing, which would maximise value for consumers.”