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Anna Majavu

Anna Majavu

The raging food price increases have sent the country into a spin, with various stakeholders calling for intervention by the government.

As ruling party the ANC has rejected calls for food price controls and the issuing of food vouchers as emergency relief measures for the poor who are really feeling the pinch.

Finance Minister Trevor Manuel recently told Parliament that price controls were impractical "cheap talk" and that food vouchers were likely to be spent on alcohol.

ANC spokesman Jessie Duarte backed Manuel, saying "there are no plans for vouchers and you cannot have price controls in an open market economy".

She said the recently held alliance summit had agreed instead to consider removing value-added tax (VAT) on a wider range of basic food products.

It also agreed to "revamp" school feeding schemes that have fallen apart because the government subsidies are no longer enough to pay for the food.

She also said the summit had agreed on "urgent action that might include criminalising price fixing in the retail sector".

Speaking at a protest recently outside Western Cape provincial government offices, Cosatu regional secretary Tony Ehrenreich called for jail time for directors whose companies are responsible for colluding on food prices.

The National Consumer Forum went further, urging consumers to boycott retail stores to force down food prices.

Over the past seven months the Competitions Commission has bust price-fixing cartels in the bread, milk and private healthcare sectors, meting out more than R200 million in fines .

But big food retailers such as Pick n Pay, who say they make no profit on basic foodstuffs thouh they recorded a 16,9percent increased yearly profit of more than R1,4 billion this year, have not yet been challenged.

This might soon change.

Duarte told Sowetan that it was "highly unlikely that cartels don't exist among the big retailers. Ninety nine percent of the retailers have a relationship with each other.

"In a normal retail market the consumer would be able to shop around for lower prices, yet now the prices increase almost at the same rate everywhere," she said.

The food price crisis has also drawn responses from unexpected quarters.

Development Bank of South Africa (DBSA) chairman Jay Naidoo told the Global Alliance for Improved Nutrition in Brussels last week that high food prices had nothing to do with food shortages but were a result of "greedy companies making super profits and putting at risk the lives of millions of men, women and children".

Naidoo told Sowetan after his speech: "It is a fact that this [food price crisis] is not caused by any worldwide shortages. It is a fact that some companies are making spectacular profits."

It is indeed encouraging that powerful institutions such as the government, labour movement and DBSA have shown interest in a matter that mostly affects the poor.

But there has been criticism against the government and the ANC's position on price controls.

The Cape Town Action Forum against High Prices, which includes the group of small bakers who blew the whistle on price fixing by the big bread companies last year, maintains that food price controls are a simple matter.

The organisation says the government would only have to determine the price of basic foodstuffs and make it punishable by law for producers and retailers to sell above this.

Political analyst Dale MacKinely also takes a dim view of Manuel's explanation of the food price crisis. Manuel, says MacKinley, has tended to explain the food crisis as the result of global forces beyond the control of ordinary citizens.

Among these factors are the internationally increasing price of fuel and the recent trend by countries in the North towards planting maize to manufacture biofuel.

"Climate change, rising oil prices and biofuel production are not the causes of the crisis," McKinley says.

"They are products of a system that has institutionalised mass land dispossession, monopolisation of capital ownership, environmental destruction, consumerist addiction and unequal terms of trade and production."

He urges the government not to see price controls and grants as quick-fix solutions that only provide short-term relief, but to look at these as complementary measures to long-term solutions such as land reform.

"States must intervene in the market by placing price controls on food - this will force the corporations to accept that they cannot continue to profit at the expense of the vast majority of humanity," McKinley says.

Rajeev Patel is a research associate at the University of KwaZulu-Natal's School of Development Studies and author of Stuffed and Starved, a new book investigating the international food crisis.

He makes the case that there is enough food in the world to feed everyone.

"Many are going hungry because the market imposes the rule that if you can't pay, you don't eat," Patel says.

He recommends that "production needs to increase in sustainable ways and poverty needs to be tackled simultaneously. Income transfers to the poor are very important. Food stamps and cash transfers are urgently needed".

The Landless People's Movement agrees and says the priority must be land redistribution so that people can produce their own food.

The movement also calls on the government to give grants to support people's gardens in the urban and rural area.

Duarte agrees that current land and agrarian reform programmes must be speeded up.

She says "a strong voice coming from the summit was against sale of public land for speculative purposes. We must see guaranteed usage of land for food production".

lAnna Majavu is a freelance writer in Cape Town.


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