Comparative analysis of the impact of food prices on household food security : evidence from the North-West and KwaZulu-Natal Provinces, South Africa.

Abstract

The prevalence of household food insecurity in South Africa is not a result of a shortage of food but of a lack of access to food. Contributing to this are the rising food prices that adversely affect the rural poor, as most of them are net buyers of food. Due to the higher food prices, poor households are forced to spend a large proportion of their income on food. The objectives of this study are to determine socio-economic characteristics that influence household perceptions of food prices and to evaluate the impact of food prices on rural household food security in South Africa. The study considers two rural areas that have different food price regimes, namely, Jericho in the North-West Province and Swayimane in the KwaZulu-Natal Province. The results are based on household level data collected from a sample of 300 households using structured questionnaires. The Ordered Logit Regression (OLR) model was used to evaluate the impact of food prices on rural household food security status, using the Food Expenditure Income (FEI) ratio as a household food security indicator. The ratio indicates the proportion of household income spent on food. Its components are directly linked to two of the four aspects of food security, namely food stability and food accessibility. According to Engel’s Law, the proportion of income spent on food declines as income increases. This implies that low income households spend a large proportion of their income on food, resulting in a high FEI ratio. The findings of the study indicated that households in Swayimane are more likely to be “well-off”, compared to those in Jericho. Location, gender of household-head, number of permanently employed household members and total household income significantly influenced household food security. Food price perceptions influence buying and consumption patterns of households. Using the Tobit regression model, households’ socio-economic characteristics that determine household

perceptions of food prices were identified. A Food Price Perception (FPP) index was generated using principal components analysis and was used to evaluate the relationship between food price perceptions and household food expenditure patterns. The results showed that households in Jericho had higher perceptions of food prices and that location, total household income and the number of permanently employed household members influence a household’s perception of food prices. Another finding was that households with a higher perception of food prices were low-income households that spend a large proportion of their incomes on food. The study recommends that policy priorities should be focused on the establishment of retail outlets in rural communities. Establishment of new employment opportunities and increased wages will also help improve household food security through increased food affordability.