The Cabinet has approved a draft framework for a national food-price agency, President Thabo Mbeki said on Sunday.
Briefing the media on the outcome of the Cabinet lekgotla held in Pretoria during the week, he said the framework would now ”go out for consultation”.
”This arises out of the concern about the high and rising food prices and their impact on the poorest in the country,” he said.
It was necessary to have some institutionalised way to respond to it on a continuous basis, rather than an ad hoc basis.
The agency would study the phenomenon so that it could recommend to the government what could be done to produce the desired results.
Mbeki said, some time ago, when the government was faced with a similar problem of high and rising food prices, a pricing committee was set up to look into interventions.
This had resulted, for example, in a major food company simplifying its packaging for mealie meal, which resulted in a significant reduction in price.
”But, given the current impact of high food prices — and it’s global — it’s clear that you are faced with a systemic challenge with regard to this; some structural challenge which is affecting the whole world.”
”And therefore you need an agency, which is kind of more permanent, less ad hoc, with greater capacity to look at the entirety of the food system, not only as it affects us, but within the global context, so that we respond to this, bearing in mind [it is] what seems to be a long-term feature of both the domestic and global economy.
”Particularly, given the impact of high food prices on poor people.”
Other government plans in this regard included the need to review the question of increasing agricultural production in the country, addressing the challenge of SA having become a net food importer, and implementation of the agricultural strategy agreed to with organised agriculture, Mbeki said.
He said while the economy was growing, albeit at rates lower than those required, and unemployment remaining a ”big challenge”, the Cabinet still remained confident that poverty and unemployment would be halved by 2014.
The challenges were both global and domestic.
He cited rising food and oil prices, declining consumption as households’ purchasing power eroded and reduced credit available for corporate lending as being among matters that were ”worrying”.
Mbeki also defended the country’s economic policies, saying inflation targeting had ”cushioned” the economy from the worst of global turbulence, reports Business Day.
He said the lekgotla had not discussed any need to change the country’s macroeconomic stance.
SA in 2025
As part of preparing for the future, the Presidency has initiated a scenario planning process to look at ”what South Africa might be like in the year 2025”.
”… so we don’t end up in future in a situation that is negative,” he added.
Mbeki said the situation in Zimbabwe had also been discussed and the recent signing of the memorandum of understanding between Zanu-PF and the Movement for Democratic change had been welcomed by Cabinet.
”Those negotiations amongst the Zimbabweans are continuing,” he said.
Referring to the foreign nationals in the country — displaced after recent attacks — Mbeki said foreign nationals needed to be registered.
”[They] can’t be in South Africa and live permanently and refused to be registered … indeed everyone should be registered in the country as normal,” said Mbeki. – Sapa