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THE
GRAIN AND OILSEED INDUSTRY
OF SOUTH AFRICA – A JOURNEY THROUGH TIME
ႄ
FOOD SECURITY
Food security is an item that was not really high on the
agenda of the ANC government after 1994, with indications
that food that could not be produced in South Africa could
simply be imported.
However, in 2007/2008 a food crisis arose in the world as a result of a dramatic rise
and instability in food prices. Food prices doubled and even tripled over a period
of approximately two years. Between 2006 and 2008 the global price of wheat and
maize increased by 136% and 125% respectively.
The initial causes of the increase in prices were, among other things, the prevail-
ing droughts in many grain-producing countries and considerable increases in
crude oil prices. The latter led to the general increase in the cost of fertiliser,
transport and intensive grain production. The increased demand for agricultural
crops for a growing biofuel industry and speculation by hedge funds probably
also played a role.
The food crisis led to riots and revolts, especially in Africa and parts of Asia, as well
as in South Africa. However, the biggest unrest was in Tunis, Algeria, Burkina Faso,
Cameroon, Senegal, Mauritania, the Ivory Coast, Egypt and Morocco. In some of
the countries it had serious consequences and eventually led to the governments
being overthrown. Policy makers took careful note and in South Africa it was real-
ised that it was necessary to find a realistic balance between land reform and food
security.
In June 2008 the
Food and Agricultural Organisation
of the United Nations held a
high-level conference in Rome where the food-price crisis was discussed. Mr Jan-
nie de Villiers of Grain SA, together with the Minister of Agriculture at the time, Ms
Lulu Xingwana, attended. In the midst of a large number of presentations reason-
able agreement was reached that greater investments in agriculture and higher
global productivity were vital to food security.
The importance of agriculture, and especially food security, in a global context
suddenly achieved a new status. It was realised once more that joint action was
essential and that aspects like increased investment in agricultural research and
development and infrastructure, as well as the amendment and development of
the supporting policies, had to be actively addressed.
Until then, producers in South Africa had been advised not to plant grain crops at
times when their prices were low. When this happens, a shortage is created, which
eventually leads to higher prices. Examples of such cases were mentioned earlier
in this publication.
As a result of the food crisis and the conference in Rome the great responsibility rest-
ing on the shoulders of the agricultural sector to produce sufficient food was realised
once more. Producers were encouraged to produce grain with the premise that new
markets had to be found for surplus production rather than reduce production.
In the development of its biofuel policy the South African government decided that
for reasons of food-security maize may not be used for the manufacturing of biofuel.
The government thought that the increase in international maize prices in 2007/2008
could largely be attributed to the fact that the USA, which produces 50% of the
world’s maize, channelled 25% of its crop into the manufacturing of ethanol. A short-
A cartoon from the
SA Graan/Grain
magazine of March 2006 portrays the ex-
citement of the grain industry about the
prospects of a biofuel industry. >>>
Dawning of an era of