Why there’s an urgent need to restore stability

When President Cyril Ramaphosa addressed the nation on July 12 amid violence and destruction of property in parts of KwaZulu-Natal and Gauteng, he warned of several risks if the situation was not resolved swiftly.

One of them was food security.

A lot has been written about the acts of criminality and the disregard for the rule of law that have swept parts of the country.

Attention has also been given to the underlying factors that make SA society so fragile.

These include rising unemployment, inequality, corruption and poor service delivery.

In light of the ongoing state of turbulence it’s important to take a closer look at food security issues.

SA is generally a secure food country at a national level.

On top of this it is a net exporter of agricultural and processed food products.

In 2020 agricultural exports reached the second-highest level on record of $10.2bn (R148bn) after a favourable production season.

But food security is about more than just having sufficient supplies.

It also requires food accessibility, affordability, nutrition and stability over time.

This is where the challenge lies.

Continued disruption will affect supplies given the specifics of SA’s food supply chains.

KwaZulu-Natal, the epicentre of rioting and looting, is a major producer of various agricultural products such as sugar, milk and poultry products.

The province also serves as an entry for imported food products, including wheat, rice, poultry products, and palm oils.

Gauteng, the other province also most affected, is one of the major food-processing hubs.

However, SA’s food supply chains are not concentrated in one particular province.

The biggest risk in the short term is the free movement of goods, including food and agricultural produce on the roads, specifically to and from the Durban port, the entry and exit point for agricultural imports and exports.

The other risk relates to increased income poverty because of the destruction of businesses.

In the same year as record production figures, the country experienced an increase in hunger, as identified in the National Income Dynamics Study — Coronavirus Rapid Mobile Survey (NIDS-CRAM).

But this wasn’t necessarily an issue of food shortage or a rapid increase in food prices.

It was mostly because people were out of work and had reduced means to buy food.

In 2021, SA again enjoyed another season of an abundant harvest after favourable summer rainfalls.

This means it is unlikely there will be food shortages this year, but rather ample supplies for local consumption and export markets.

This will be true for major grains, fruits, meat and various other products.

Still, this doesn’t mean everyone in the country is food secure. Or that prices won’t rise rapidly.

There are long-standing challenges with income poverty in SA and the extent to which the poorest people are able to afford nutritious food.

Still, food prices have only risen negligibly.

SA’s consumer food price inflation was at 6.8% year on year in May 2021, from 6.7% year on year in April, according to data from Stats SA.

This is not an alarming rate as we have seen double-digit inflation rates in years of drought such as 2016, where consumer food price inflation averaged 10.8% year on year.

The expectation is that consumer food price inflation could in fact soften in the second half of 2021.

Therefore, Ramaphosa’s emphasis on the risks to food security in his address on July 12 was primarily focused on KwaZulu-Natal.

The main challenge is a disruption due to the looting spree, forcing companies to avoid volatile areas so as not to expose their property and employees to danger.

It is far from clear how long the unrest in KwaZulu-Natal will last.

Menacingly, no-one can tell with certainty if waves of protest will not spill over to other provinces in ways that disrupt business and supply chains and affect livelihoods.

If the wave of violent protests continues unabated, it could pose a risk to food security, with the poorest people most affected as their employment and livelihoods will suffer.

Small businesses in particular might be forced to close given the scale of the continuing violence.

But South Africans in other parts of the country that have not seen outbreaks of looting and violence should not panic about possible food shortages.

KwaZulu-Natal has been the most affected by the violence.

But the province isn’t the epicentre of agriculture in the country.

It isn’t an anchor to the SA food system.

Provinces in central SA — the Free State, Gauteng, Mpumalanga, North West and Limpopo — hold far more key positions.

This is because of their abundant agricultural production and food processing capacity.

There is no risk yet of food shortage from other anchor provinces.

But the risk comes when there is no fuel for transport, given the force majeure that the refinery in Durban has declared.

On average, 75% of the country’s grains are transported by road annually.

These are largely exported through the Durban harbour.

The same is true for imported food products such as rice, wheat and palm oil, among other products.

The volumes are also large for horticulture, specifically citrus, a leading exportable agricultural product in SA.

The burning of trucks on the roads and the blocked routes to the ports will prove costly to businesses and harm SA’s reputation as a global supplier in various value chains.

This will also negatively affect the province’s food supply chains.

There needs to be a deeper introspection about ensuring the country creates an environment conducive for businesses to thrive, and that it addresses the social ills that underlie instability and disregard for the rule of law.

In the near term, South Africans should not panic about the food system.

But authorities will need to act swiftly and assertively to restore stability.

Wandile Sihlobo is a visiting research fellow at the Wits School of Governance,   chief economist of   Agbiz SA, and  a member of the president’s economic advisory council.