7 December 2012

South Africa: Small-Scale Mills 'To Lower Food Prices'

The launch of the small-scale Kuvusa Maize Mill in KwaZulu-Natal province will go a long way towards promoting food security, beneficiation and job creation in South Africa, Trade and Industry Minister Rob Davies said at the mill's launch in Durban on Thursday.

The mill forms part of the government's Industrial Policy Action Plan (IPAP) small- scale maize milling initiative, which aims to improve food security in the country by reducing the cost of maize meal by at least 20%.

"Food security is not only about the available quantity of food, it is also about the affordability of foodstuffs. The food price inflation has been higher than the overall rate of inflation in this country," Davies said.

"A very large section of our population is living on very low income, [and] that kind of an increase of a commodity that is a higher proportion of their shopping basket is devastating.

"Localised production is the appropriate solution to our challenges in regard to food security in this country."

Contributing to industrialisation, job creation

The project will also contribute to the industrialisation of the country, as well as create jobs in Durban and the surrounding areas - 27 direct and 120 indirect jobs having already been created as a result of the project.

"There is an agreement among African ministers of trade and industry that for Africa's industrialisation to become a reality, we need to promote value addition and industrialisation of our agricultural products that we produce in our continent," said Davies.

The maize-meal produced at the mills will be marketed at prices below prevailing market rates.

According to the Department of Trade and Industry, this will introduce competition into a highly concentrated sector which has an unfortunate history of uncompetitive practices which have directly impacted on poor consumers' ability to feed themselves and their families.

There are also plans to open more small-scale mills in rural locations in 2013, said managing director of African Micro Mills and co-founder of Kuvusa Mills, Sé Higgins.

"Essentially by establishing these mills in rural areas we will be negating the rising cost of logistics by creating a parallel track of decentralised facilities wherein rural areas are incorporated into the main stream value chain," Higgins said.

"In addition to job creation and simultaneous provision of a route-to-market for emerging farmers, these commercially viable projects have important implications for lowering maize meal prices in rural areas by as much as 20%."


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