Cost of Food Crisis: The DA’s plan to assist starving South Africans

8 September 2022

The DA has called on President Ramaphosa and his government to act urgently to reduce the cost of living and the cost of food. We have sent him our plan consisting of five urgent policy proposals that would bring immediate relief to starving South Africans.

South Africa is in the throes of a full-blown hunger crisis.

Half the population is struggling to get enough nutrients into their bodies.

Food prices have risen sharply this year. Consider food price increases of just these four items:

• 2 litre vegetable cooking oil up 65% from R65.99 to R108.99
• 10kg white maize meal up 26% from R94.99 to R119.99
• 400g tin of pilchards in tomato sauce up 43% from R20.99 to R29.99
• Loaf of brown bread up 24% from R10.49 to R12.99

This food price shock is due to Russia’s attack on Ukraine, which sent shockwaves through global fuel, energy, fertiliser and feed markets driving a global cost of food crisis.

In South Africa, inflation surged to 7.8% in July, the highest since May 2009, with food price inflation at a high of 8.6% in June, putting huge pressure on low-income household budgets.

It’s important to understand the local context. South African household budgets were already under massive pressure due to:

• irrational lockdown regulations;
• bad management of the economy
• the slow pace of reform;
• the riots and floods in KZN;
• service delivery failures; and
• the spiraling cost of electricity.

All of which have caused unnecessary job losses and unnaturally high unemployment.

The hunger crisis is harming our society in many terrible ways:

• Millions of people are suffering the pain and indignity of hunger. 81% of households are skipping at least one daily meal. 41% say they can’t feed their families anymore.
• Increased childhood stunting and wasting, affecting 27% of children under age 5.
• Millions of hungry school children are unable to concentrate and learn.
• Increased malnutrition is leading to reduced productivity, obesity (from shifting to a cheaper, high-carb diet), diet-related diseases, impaired teenage brain development.
• It has increased the risk of death from starvation.
• And it has increased the risk of social instability and riots that would cause further infrastructure damage, business closures, disinvestment, job losses, skills flight, tax revenue losses, and interrupted service delivery.

The South African government cannot afford to ignore this crisis. They can and must intervene.

The social cost of ignoring this crisis will far outweigh the cost of intervening to bring relief.

It should be clear to everyone that although some interventions will cost the fiscus directly, the indirect cost in terms of productivity losses, learning losses, the cost of dealing with diet-related diseases and losses due to social instability will ultimately cost South Africa far more.

The hunger crisis is urgent and yet the ANC government has to date done little to nothing about it. Either they don’t care, or they have no solutions.

Other governments around the world have responded swiftly with bold relief packages because they know it is in everyone’s best interest. The ANC government has no option but to do the same.

The right to food is enshrined in the Constitution. The DA will not let up until South Africa’s hunger crisis is addressed. The DA does care, and we do have solutions.

The DA’s plan to tackle the hunger crisis

Our plan consists of five realistic, tangible, implementable interventions that would bring meaningful relief to millions of households.

The upcoming Medium Term Budget Policy Statement (MTBPS), and adjustment budget in October gives government the opportunity to implement some of these solutions and prevent massive social harm.

1. Cut fuel taxes and levies to lower the cost of transport

Lowering the cost of transport would enable people to put more money towards their food budget. In addition, it would decrease the cost of food because the high cost of transporting food is pushing up food prices at the till.

Depending on how deep the cuts to the fuel taxes and levies, this proposal would cost the fiscus up to R86 billion. As the DA has already stated, this can and must be covered by cutting corruption and wasteful expenditure, reallocating funds such as the VIP Protection budget, and opening the economy for growth.

The ANC can lower the fuel price by supporting the DA’s Private Members Bill to deregulate the fuel price and by putting through fuel tax cuts in the adjusted budget.

2. Reallocate the R50 million food aid for Cuba to feed hungry people at home

It is frankly incomprehensible that the South African government would take R50 million belonging to the people of South Africa and use it to provide food aid for Cuba when people here at home are starving.

This is especially egregious since no one believes the money will be spent on food aid there. Far more likely it will go to the ANC’s mates in the Cuban government who will pay kickbacks in one form or another to the ANC elite.

This intervention would not cost the government anything. The MTBPS provides Finance Minister Enoch Godongwana the ideal opportunity to re-allocate this money.

3. Review the list of zero-rated food items

Government must urgently review the list of zero-rated food items with a view to expand it to include more items commonly purchased by the poorest 50% of households, such as bone-in chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee, soup powder. Changes could be put through in the MTBPS.

Dropping the 15% VAT on some of these items would help households to stretch their food budgets a lot further and would enable people to purchase more nutritious food.

We especially call on government to zero-rate bone-in chicken and other chicken categories commonly purchased by low-income households.

Zero-rating bone-in chicken would cost approximately R3 billion, but experts have suggested the intervention would pay for itself through improved health, work and learning outcomes. Bone-in chicken is a high-quality source of protein and by far the most popular one for low-income households, making up 14% of low-income household food budgets. Poor South Africans need an affordable source of protein to prevent them shifting to a less nutritious high-carb diet as their budget is squeezed. It is also versatile and quick to cook, saving on energy costs.

4. Review import tariffs on some food items

We are calling on government to cut import tariffs on pasta and some chicken categories sooner than the MTBPS, to bring some immediate relief.

Dropping tariffs on pasta and certain chicken categories such as chicken carcasses will have a negligible impact on the fiscus but a large impact on the poorest households.

5. Provide private title to all land reform beneficiaries on state land and landholders in communal areas

This will increase food production and improve food security while bringing down the cost of food. It is a longer-term solution that will grow tax revenues by making more land productive.

The DA is essentially calling on government to transfer full title ownership from the state to all land reform beneficiaries and to survey and register all land rights on trust/communal land, and transfer title to all those who want it (explicitly including women).

Six weeks till the MTBPS

We want President Ramaphosa and Finance Minister Godongwana to really take these proposals to heart. They have at least six weeks to consider these ahead of the upcoming Medium Term Budget Policy Statement in October, which presents an opportunity for government to implement the first four of these proposals.

Each of them is implementable. Each will bring a degree of relief to millions of hungry South Africans. The fifth, providing private title, will take longer to implement, but government should turn their attention to it right away.

DA governments are already doing everything they can to tackle the hunger crisis:

• Western Cape Education Department (WCED) feeds almost 500 000 schoolchildren daily through support for school feeding schemes;
• WCED feeds 25 000 schoolchildren through after-school and youth development programmes;
• WCED has helped establish 571 food gardens at schools and appointed 146 gardeners to sustain them;
• Western Cape Department of Social Development (DSD) feeds 158 770 young children through Early Childhood Development centres;
• Western Cape Department of Health First 1 000 days programme provides nutritional support for children at risk of malnutrition;
• DSD feeds 101 845 people through funding soup kitchens.

Immediate relief must be backed up with economic reform

Along with calling for these immediate-relief interventions, the DA will continue to call for economic reforms that open the economy for jobs and growth. Millions of jobs will be created in South Africa if we make it a place that attracts investment and scarce skills, a place where small businesses can easily start and grow. Getting people back on their feet by getting them into jobs is the best way to build resilience against food and other price shocks.

Issued by the DA, 8 September 2022