Thursday, May 21, 2009

The Days of Cheap Food Are Over

SHOOT: Farmers were paid 30% more for what they produced, but only produced 12% more. The difference was not pocketed as profit, but went into rising expenses, like fuel and fertiliser.

Higher prices for food and other agricultural goods was the reason SA farmers were paid almost 30% more for their total production during 2008 compared with the previous year - despite producing just 12% more.

Price increases throughout the economy meant farmers spent a whopping 140% more on fuel, 57% more on fertiliser, 30% more on dips and sprays and 24% more on seeds and plants.

In horticulture, however, the sharp fall in terms of trade comes after a flat period since a fall in 2005. This might indicate that fruit and vegetable prices will have to rise to remain viable for farmers.

Though farmers of animal products gained in 2007 in terms of trade, they more than lost those gains last year. This will increase upward pressure on meat and milk prices. Though input costs will come down, the days of cheap food are certainly over.

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2 comments:

Anonymous said...

Years ago farmers were considered wealthy, how things have changed!

Nick van der Leek said...

I believe we are heading back towards those days. Here's how it will happen. as energy prices increase it will wipe out warehouse on wheel type industries (shipping, Pick 'n Pay, Walmart.) When that happens, local industries will resurge as their killers will have been slain. The result, the return of the farm as a powerful industry in and of itself, and btw, manual labor will return to the farm.