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Government meddling in garlic and ginger prices will backfire â economists
Ina Opperman
‘When a government cannot do what it should, it starts doing things that it can. This is what is happening with this price investigation.’ â Professor Jannie Rossouw of Wits Business School.
After the National Consumer Commission (NCC) announced with big fanfare that it would investigate seven major suppliers of garlic and ginger, economists are questioning if this is a sensible thing to do.
Garlic and ginger are not staple foods, while there are questions about whether government should get involved in food price increases at all.
The NCC said on Monday the investigation into allegations of price gouging followed an outcry by consumers about excessive prices of these products. Price gouging is defined as an unfair or unreasonable price increase that does not correspond to the increase in the cost of providing goods or services.
[LISTEN] Basic Food Basket in SA Now Costs Over R 4,000, More than the Basic Minimum Wage
Feb 02, 2021
The Pietermaritzburg Economic Justice and Dignity Group says the food basket which is part of the household affordability index shows that between September last year and January this year, the cost of forty three food items has increased by almost R 200 or 5.1%.
The latest Household Affordability figures, painted a grim picture of South Africans who are struggling to afford even the most basic of foods because of the rise in prices and inflation.
The January 2021 House Affordability Index finding has just been released by the Pietermaritzburg Economic Justice and Dignity Group
Core foods driving increases
Unfortunately, the prices show that the main foods driving the higher increases in the food basket over the past five months are still the core foods most South African households reasonably expect to have in their homes and required for all basic food preparation to avoid hunger, with a 15% increase in maize meal, 3% for rice and cake flour, 5% for white sugar, 33% for sugar beans, 7% for samp, 4% for cooking oil and potatoes, 2% for onions and 4% for bread.
According to the report on the latest prices, high levels of inflation on these foods are concerning because people must buy these core foods regardless of price increases.