Johannesburg, 23 March 2022
South Africa needs to act now to prevent its poorest from bearing the brunt of the ongoing conflict in Eastern Europe. Reports that food supply shortages and price hikes as a result of the Russia-Ukraine conflict have already begun to affect South Africa and require immediate government response, Afrika Tikkun Foundation (ATF) has urged.
The foundation is concerned about the warnings of the farming industry suggesting small-scale farmers and the poor are suffering the consequences of the geopolitical crisis in Europe. Despite experiencing two consecutive good seasons for grain harvesting, South Africa may have a food security crisis looming as a result of price inflation.
This follows record global price hikes including in the USA where the consumer price reached a 40-year high, jumping 7,9% annually. Global market shake-ups have shot up the price of fuel in several countries including South Africa. ATF, an NPO working in youth development, is also concerned about the spike in the price of fertiliser as a result of the conflict in Eastern Europe between Russia and Ukraine.
The international entities which provide the South African farming industry with fertiliser have experienced shortages of materials such as potassium which is sourced from Russian producers. This has, in turn, affected food production prices in South Africa which could be passed on to the South African consumer.
This puts a damper on an otherwise thriving agricultural sector which has been the standout performer in the latest GDP data from Statistics South Africa. The sector grew 12,2% in the last quarter of 2021. That agricultural businesses across the sector have managed to thrive in the wake of global geopolitical tensions and in the midst of a pandemic is a testament to the resilience of the sector, says ATF CEO Alef Meulenberg.
Not only are commercial farming businesses crucial employers, they are also significant contributors to South Africa’s economic growth, which managed to see a 1,2% GDP growth in the fourth quarter of 2021. But these gains are not without threats in the current global political climate, suggests the latest analysis into the impact of the conflict between Ukraine and Russia.
According to the report, compiled by the Agri SA Economic Centre of Excellence, escalating conflict in the Black Sea region have posed new challenges to global food markets with soaring prices and supply-chain disruptions. These developments follow a slight global recovery from the effects of the COVID-19 pandemic.
Hours after the first bomb sirens sounded in Kyiv, Ukraine, the Rand weakened against the dollar, setting in motion a cascade of economic blows as oil and gold commodity prices soared along with that of grain and oilseed. But global food supply chains the world over have been rocked by the historic events which began with the invasion of Ukraine by Russian forces on the 24th of February 2022.
Recent reports that increased costs in the production of grains, including maize and wheat could see a major bread price hike in three months’ time are also concerning. The war’s effect on global grain supplies is already evident.
Ukraine and the Russia Federation account for a combined 30 percent of the world’s wheat exports. Now affected by the growing conflict, the harbours of Odessa and the Black Sea serve as major conduits for international grain shipments from Ukraine.
The country is also among the top exporters of barley, maize, sunflower and other oilseeds. Analysts have found that sinking stock markets, soaring commodity prices and rising prices for oil and gas, will further drive up the price of fertiliser, and food prices are expected to follow suit.
What is most worrying is that poor farmers, who consume more food than they sell, as well as the poorest buyers in these markets will suffer the most as demand pressures could drive prices up even higher. “Amidst these challenges it is more important than ever, to strengthen efforts to uplift agricultural business as one of the key employers and drivers of South Africa’s developing economy,” says Meulenberg.
As numerous reports by global and local experts have attested over the last two years, global economic pressures only further drive the racial and socio-economic inequalities which exist in South Africa.
According to the World Bank Report, race plays a key factor in South African society where 10 percent of the population owns more than 80 percent of wealth.
Government and civil society have a duty to combat existing challenges with the effects of our historical injustices and the legacy of Apartheid in mind, especially when it comes to the farming sector. This week the World Bank released a report citing further evidence that South Africa is among the most unequal nations on the planet.
The ATF Urban Agripreneurship Incubation Project, which is currently operational in Diepsloot and Orange Farm in Gauteng aims at equipping unemployed youth with the skills to launch their own agri-businesses. It is also intended to increase access to nutritious fresh produce and create decent livelihoods in impoverished communities.
“At Afrika Tikkun, we believe that closing the gap between the predominantly black small-scale farming market and big commercial farming entities is the key to unlocking the true potential of the entire sector,” says Meulenberg.
Founder & Director
Chartered Public Relations Practitioner (CPRP) and PRISA Member (Public Relations Institute of Southern Africa)