/ 17 April 2008

High food prices worry Cabinet

The Cabinet is concerned about ”collusive behaviour” in the food industry, government communications head Themba Maseko said on Thursday.

Briefing the media following Wednesday’s fortnightly Cabinet meeting, he said the government is developing a strategy to address this challenge. ”Collusive behaviour in some sectors of the economy, particularly in the food industry, is a matter of concern to many South Africans.”

The government is confident that the competition authorities will continue to be vigilant and take strong action to curb these negative practices that have also contributed to higher food prices.

”The economic and social cluster ministers were mandated to develop a strategy to address this challenge and to report back to Cabinet in the near future,” Maseko said.

The global rise in food prices is largely due to the combined impact of production shortfalls in major supply regions, rising consumption in developing economies, and some diversion of feedstock to biofuel producers.

South Africa has also been affected by the rising prices, although its food prices have not increased at the same pace as in many countries across the globe.

Higher food prices more severely affect the poor, and the national budget contributed to supporting the income of poor households through the social grants system and school feeding scheme.

Food security also depends on expansion and development of the rural economy, investment in agricultural capacity and technology, and broader participation of emerging farmers in commercial agriculture, Maseko said.


Meanwhile, thousands of people were expected to take part in a protest against high food prices in Johannesburg on Thursday, the Congress of South African Trade Unions (Cosatu) said.

”We expect more than 5 000 people from trade unions, non-government bodies and community organisations to turn up,” Cosatu’s Gauteng secretary Siphiwe Mgcina said on Wednesday.

He said protesters would gather at the Johannesburg City Hall at 1pm and march to Braamfontein to the offices of Eskom and the Pick n Pay supermarket chain, as a symbolic gesture to all retailers.

Key issues to be raised included escalating food costs, the proposed 53% Eskom tariff hike and rising fuel prices.

Community organisations and the South African NGO Coalition would also take part in the march.

Meanwhile, the Federation of Union of South Africa (Fedusa) on Wednesday also called for urgent action against soaring food prices. Fedusa’s general secretary Dennis George said the most basic food items, such as bread, milk, eggs, maize, meat and chicken, have gone up at a rate higher than inflation.

”According to statistics, maize, a staple diet for millions of South Africans has gone up by 40% in the past year,” he said.

He said the International Monetary Fund warned that the 48% increase in food prices since the end of 2006 was a huge figure that may undermine gains that the international community had made in reducing poverty.

However, Fedusa had no plans of joining Thursday’s march, George said. — Sapa