The DA’s plan to cut food costs

South Africa is in the throes of a hunger crisis. Four out of five households are skipping at least one daily meal while two out of five households say they can’t feed their families anymore, according to a recent survey. As Gift of the Giver’s CEO Imtiaz Suleiman pointed out yesterday, the problem is very serious and growing.

MTBPS

Five weeks ago, I sent President Ramaphosa a set of researched policy proposals for cutting food costs. On Wednesday, the DA took this fight directly to Finance Minister Enoch Godongwana ahead of his medium term budget policy statement next week, which is government’s ideal opportunity to intervene. Godongwana may argue that he cannot afford to take these measures. But the cost of ignoring the hunger crisis will be much higher than the cost of addressing it.

Social harm

This hunger crisis and lack of diverse nutrition is harming our society in terrible ways. Hungry schoolchildren are battling to concentrate and learn. For many, school is the only place they get a meal. Stunting, when a child has significantly low height for age, was already affecting one in four children under age five compromising their immune system, brain function, organ development and life prospects.

Increased malnutrition is leading to reduced productivity in the workplace, obesity (from shifting to a cheaper, high-carbohydrate diet), and diet-related diseases, all of which will cost the fiscus and the health system dearly. Worse still is the increased risk and incidence of death from starvation.

Taxing food

The DA has proposed a review of the current zero-rated list of food items, with a view to dropping the 15% VAT on those items most commonly purchased by the poorest 50% of households, such as bone-in chicken, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, and coffee.

Zero-rating bone-in chicken would cost approximately R3 billion, but experts have suggested it 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 poor 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.

We’ve also recommended dropping import tariffs on pasta and those chicken categories most commonly eaten by the very lowest-income households such as chicken carcasses, which they use to make broth. The benefit to society will far outweigh the negligible impact on our fiscus.

Taxing fuel

The DA has advised government to reduce the tax on fuel. This will decrease the cost of food because the high cost of transporting food is pushing up food prices at the till. Plus lower transport costs for the poor will mean more money for food.

Aiding Cuba

We’ve also advised government to reallocate the planned R50 million “food aid” for Cuba to rather feed hungry people at home. More likely, this money will go to the ANC’s mates in the Cuban government who will pay kickbacks in one form or another to the ANC.

These interventions will bring some immediate relief. But the DA has also recommended policies that will improve food security and affordability in the longer term.

Private title

We are pressuring government to provide private title to all land reform beneficiaries on state land and landholders in communal areas. By making more land productive, the increase in private land ownership will increase food production and improve food security while bringing down the cost of food.

Economic reform

The longer term solution is of course to open our economy for jobs, investment and growth, by implementing the many reforms the DA has for years recommended. 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 hunger.