Food Security is Part of Life. In every society, the daily lives, energy, and productivity levels depend somewhat on the consumption of food as an important basic need. Apart from the health benefits associated with different types of food and/or eating habits, the consumers budget allocation towards grocery/food is particularly crucial, especially when confronted with budget constraints.
By: Mamokgaetji Marius Masoga
Since the start of Covid-19, food prices increased by significant amounts. For instance, The World Bank indicated that the global food price increased by approximately 30% between January 2020 and January 2021. In countries like South Africa, there is primarily a higher risk of food security owing to high unemployment rate and loss of income coupled with skyrocketing food prices. Nevertheless, some households can avoid the worse-case scenario of extreme hunger by re-prioritizing their expenditure. The rate of poverty in the country prompts the need to put more focus on the basics when it comes to food, albeit a certain percentage of the population may still struggle.
The government of South Africa has made efforts aimed to assist citizens to cope with extreme hunger and boost consumption expenditure in the economy. That was (for example) through the increment of social grants, including the so-called: “special grant” of R350 for unemployed citizens. Meanwhile, the South African Reserve Bank (SARB) reduced repo rate, which is a policy tool meant to stabilize the prices. Hence, the inflation rate was low on average in the most part of 2020. Nevertheless, food prices showed relatively high figures, though Stats SA inflation data for February 2021 indicated that food and non-alcoholic beverages moderated to 5.2% in February 2021 from 6.0% recorded in December 2020. The current policy measures do not seem nor prove to be enough to mitigate the devastating effects of Covid-19 crisis, as far as social factors (like poverty and hunger) are concerned. Without proper understanding of financial literacy on the side of consumers to manage spending behavior, the policy measures (fiscal policy and monetary policy) can only produce minor results/progress.
Read More: How Your Body Reacts To The Corona Virus
Major issues and Potential Remedies to Cope with high Food Prices when the shock hits the economy
The fact of the matter is that, every household in the society deal with competing needs and wants to satisfy and enjoy the economic benefits concerned. The growth in commodities and food demand is inevitable. While at the same time, high unemployment rate and low earnings worsens the situation, especially for the destitute. Therefore, people need to maneuver in terms of allocating their resources carefully and making informed decisions. One may need to consider the following, as quoted from Cat Cora: “Purchase items that can be made into several meals, like a whole roasted chicken, or bag of sweet potatoes, and shop the periphery of the grocery store, avoiding the middle aisle full of processed and higher-priced foods”. Meanwhile, the forefront public policy discussions and implementation need to reinforce the free flow of commodities and food across countries. Hence, David Malpass (2021) mentioned in the World Bank blogs, the importance of ensuring that essential goods flows as freely as possible across borders. As most businesses in South Africa (and the global business community is not an exception of course) strive to recover from the aftermaths of Covid-19 pandemic, high production costs may ultimately be felt by those who enjoys the economic benefits of those goods and services (i.e. the citizens/society/consumers). Therefore, the government’s regulatory measures/policies need to be more vibrant to avert a situation where the burden and/or costs are dramatically shifted somewhat to the consumers.