Food price inflation
While the drought can result in farms going bankrupt, for the consumer it is estimated that this drought will result in an 11% food price inflation by the end of 2016. It was reported in the media that food prices have already increased by 8%, just three months into this calendar year, and in particular an increase in bread and maize which will hit the poorest people in the country first.
“The drought has certainly highlighted the importance in promoting sustainable agri-practices. With the scarcity of water in our country, farmers can no longer ignore sound conservation farming practices, and I welcome the drive to push conservation farming in the Western Cape.
At a global level, the price index of food is currently lower than that of the 1960’s in terms of real prices. In South Africa however, we do not experience these benefits due to the weakening exchange rate. “Again it is the poor which suffers most as they spend the biggest part of their income or grant funds on food,” Schäfer adds.