#SAFoodCrisis
How the food
industry screws
you, and the
farmers
Free market principles have resulted
in corporate interests maximising
their profits at the expense of primary
producers and end consumers ~ and
neither can afford what!s happening:
Another in our series on the crisis
in South Africa!s food industry, by
Smallholder publisher Pete Bower
I
f you take a small tortoise
and squeeze hard enough
on its carapace its innards
will emerge in a gooey mess
from its front end and from
its rear, and it will die. I know
this to be true because that's
exactly what my sister did to
her pet tortoise when she
was a child, and she was
deeply surprised and
saddened by its death.
This gruesome analogy is not
totally unlike what is
happening in the food
industry in South Africa
today: At the one end,
farmers are being squeezed
out of profitability by the low
prices they are able to
achieve for their produce,
while at the other end,
consumers are being charged
prices that they simply
cannot afford for the food
they need for their families'
health and wellbeing.
What has happened? And
what is going on?
In the dark days of
Nationalist rule, agriculture
and food production were
overseen and managed by
government-appointed
control boards.
These powerful organisations
used a raft of measures to
ensure stability of prices to
consumers and reasonable
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profits for farmers who,
admittedly were largely the
voting bloc that kept the Nats
in power.
Some of these control
measures included floor
pricing for off-farm produce,
ceiling prices for finished
product and quotas and
subsidies for certain catego-
ries of food stuffs.
By these measures, farmers
were assured of receiving a
price for their production ~
of maize, wheat, milk etc ~
that enabled them to farm
profitably.
At the consumer end, price
controls for basic foodstuffs
such as maize meal and
bread ensured that they were
affordable to the masses.
Now, one of the problems
with a dynamic set-up such
as an agricultural economy is
that the moment you fiddle
with one factor, such as
setting the off-farm price of
maize or imposing a quota
on milk production, the law
of unintended consequences
sets in.
An artificially-set price of
maize, for example, may
make it profitable to plough
up marginal land for maize
plantings, to the detriment of
the sheep industry. Or,
Continued on page 21