South Africa’s food security future buckles under electricity crises

“Sellers say breeders can’t produce bigger birds in bigger numbers because it’s now harder, costlier to do so,” Baloyi tells The Africa Report.

State failure in South Africa is eating into the dinner plate for both farmers and consumers – and debilitating mass riots in July 2021 were partly blamed on rising hunger.

“South Africa faces major infrastructure challenges which impacts the competitiveness of our agricultural sector,” Johann Pretorius, the CEO of Karan Beef, the country’s biggest cattle producer says, telling The Africa Report that it is now “a challenging environment”.

Eggs and crises

Eggs, live chickens, potatoes, beef, fruit, onions, and all types of household basic foods are under increasing threat of vanishing from markets in South Africa, one of the world’s biggest food-producing countries.

Food chain players pin down these fears to multiple crises that range from historic electricity shortages, a collapsing currency, and inflation, to militant threats from far-left parties to grab prime commercial land for redistribution to supposedly landless Black South Africans.

“In South Africa we are currently in a Catch-22 situation with high inflation, leading to high interest rates, while economic growth does not look good. However, several factors hurting the [food] economy [such as Eskom loadshedding] and investor trust in South Africa are driving the value of the rand down,” Frikkie Maré, the head of agricultural economics at University of the Free State, in South Africa’s corn belt, tells The Africa Report.

Food shortages in South Africa are no longer considered a far-fetched possibility, Gareth Ackerman, the chairperson of PicknPay, South Africa’s second biggest food retailer, warned in May.

“I feel compelled to caution that the entire food industry is under existential threat. The probability of social unrest relating to food shortages and possible store closures [is] now heightened,” he said, laying the blame at power blackouts and governance failures.

South Africa’s food consumers are already buying downsized portions of food as the country’s dying economy pummels both food producers, retailers and households, Pieter Engelbrecht, the CEO of Shoprite, said in March, underlining the predicament faced by working-class food buyers like Baloyi.

Proud food legacy

South Africa has a proud legacy of being one of the world’s biggest food producers for domestic consumption and export. Experts say while the core of its food supply chain is still reasonably performing, clouds are quickly darkening on the future. South Africa still produces 15m tonnes of corn per year, thus making it the continent’s second biggest producer.

The country’s most exported food products also include fruit, sugar, and increasingly, beef. In value terms, now nearly 50% of food production is shipped abroad, thus making the country a key player in global food chains.

Despite this proud food supply legacy, troubling indications are emerging that South Africa’s domestic food consumers are buying less; 34% of food produced by farmers is lost to waste and 45% of the entire food supply – domestic and imports – is being lost.

Eskom is ‘major problem’

The causes are numerous but the damaging electricity blackouts brought on by Eskom, the national power corporation, feature at the heart of fears over South Africa’s food security.

“The problems at Eskom and the ongoing load shedding to protect the grid is the major problem,” says Maré.

“Load shedding has a significant impact on primary agricultural production,” he adds. The most direct impact is on irrigation farmers who need electricity to irrigate their crops, he says.

High stages of load shedding do not only cause insufficient water supply, as there are simply not enough electricity hours in a day to irrigate, but it also forces farmers to irrigate during peak times, which increase their electricity bill.

Further, in many rural areas, cellphone towers are down when there is no electricity. Since many South African farmers use cell phone and internet technology to manage their irrigation systems, it cannot be done during load shedding. This means that farmers must drive to pumps and pivots to start and stop them and suffer damages if they cannot start or stop a system on time.

Eskom’s dysfunction as a reliable power supplier has also notched a gear up to hit other areas of South Africa’s food supply chain: factories that supply inputs to farmers and cold chains that store fresh food.

“Many factories cannot open on days with four hours or more of load shedding as it is too costly to get labour in for only half a day or less of work. This causes the prices of inputs to increase as the supply is lower,” explains Maré.

However, it is on cold chains required to keep food fresh that Maré expresses the biggest worry on South Africa’s domestic food security.

Food processors must always ensure electricity to maintain the cold chain and therefore need to run generators during load shedding. This has a large impact on South Africa’s domestic food prices as the cost for the generation power must be recovered.

“One, rather small, (food) processor told me that load shedding cost him R360,000 ($18,900) per month in diesel, while his electricity bill is about R60,000 ($3,100) less.  He therefore needs to fork out R300,000 ($15,700) a month extra to maintain the cold chain,” he says.

The CEO of Shoprite, the country’s number one food retailer, fumed in February that he is burning nearly ZAR 1bn ($52m) a year on diesel just to keep food fresh in his supermarkets.

Fellow businessman Pretorius of Karan Beef, agrees.

“The diesel required to run our generators comes at a significant additional cost. The biggest impact of load shedding, crime, unemployment, low consumer confidence is on consumer demand for beef products, which impacts the entire industry,” says Pretorius.

Multiple crises

While Eskom alone threatens to tip South Africa’s once-solid food supply chain into an existential crisis, other worrying factors are at play – political threats of land grabs which are frightening some commercial farmers to either emigrate, sell off their holdings or not invest deeply to expand future production.

“Land expropriation without compensation is certainly a factor hurting investment in agriculture, but it does not cause land to go out of production,” Maré says.

The left-faction of the ruling ANC government is toying with the idea of seizing white-owned commercial farms without compensation to settle landless Black South Africans. In September, a land-expropriation bill was passed in parliament.

Jacob Zuma, who is thought to be the RET faction’s godfather, once reprimanded the ANC for failing to join the EFF’s call to change South Africa’s constitution and enable the expropriation of land without compensation.

The far-left Economic Freedom Fighters (EFF) party of Julius Malema, which could enter government in 2024, continues to double down on land grabs rhetoric. It still demands that land ought to be taken away from white commercial farmers without compensation and be redistributed to landless Black South Africans.

“The drums of land grabs are beating louder; investors fear throwing too much future money into agriculture. If grabs do happen, food prices will shoot through the roof,” ecology and sustainability analyst Tapuwa O’bren Nhachi tells The Africa Report.

Maré, who is a specialist in red meat value chain, partially agrees. “Commercial agricultural production is certainly growing in South Africa, although the number of commercial farmers is declining.”

“Although expropriation without compensation may be part of the reason for commercial farmers to leave the industry, the main driver is more economies of scale where farming units must increase in size to survive economically,” he says.

Passing on the pain

Because farmers are struggling under multiple crises of Eskom, a decaying economy and threats of land seizures, the problem is being increasingly passed down on a broke working class which is increasingly borrowing to afford food.

There is a growing silent hunger and malnutrition that is under-reported, especially in South Africa’s sprawling urban townships. Gauteng, the country’s most wealthy metropolitan region, is now the country’s hungriest province according to the latest household food security survey from Statistics South Africa. About 25.3% of all households there are now ‘food inadequate’ and in the city of Johannesburg alone 11.5% of all households are considered hungry.

“It’s a tip of the iceberg – far more Black households are going to bed without eating,” Nhachi says. “Rural districts could be worse off.”

Soaring costs of key potatoes, tomatoes, peppers have made ‘Shisa Nyama’, a common household staple of grilled meat and corn in South Africa, as an extremely unaffordable and out-of-reach meal for many, the Pietermaritzburg Economic Justice and Dignity, a leading anti-poverty non-profit, warned in May.

Upstart farmers like Catherine Daxa who keeps a flock of egg-laying brown hens in her backyard to supply market traders in Soweto, the largest township in South Africa, blames a collapsing currency and punishing inflation that’s making feed for her animals very expensive.

“It’s everything: feed for the hens, electric lights to keep the chickens warm; medicine to keep disease at bay; fuel to ferry the chickens to market – it’s all too expensive for us producers and we simply hike selling prices,” Daxa tells The Africa Report whilst picking crates of fresh brown egg from her informal coops.

Hope

Despite the headwinds of crisis, South Africa’s agriculture still has a bright future, argues Wandile Sihlobo, the chief economist at the Agricultural Business Chamber of South Africa.

“South Africa’s agriculture, its food security and export ability are intact,” an upbeat Sihlobo tells The Africa Report.

Sihlobo leans into the current food inflation crisis and says, there is a lag – between three and five months – with regards to farm and retail prices of some food products, which explains the stubborn food price increases in the country. Unfavourable weather conditions over the past few months have also disrupted production, leading to a pick-up in some vegetable product prices, he adds.

“There could be some moderation (into) the year’s second half,” Sihlobo says of his hopes that food affordability will be saner for South Africa’s consumers.