Implications of increasing world oil scarcity for national food security in South Africa

ABSTRACT

Economic and social stability depend on a healthy, functioning and affordable system of agricultural production and food distribution. In recent years, however, international and domestic food prices have risen considerably, partly as a result of rising oil prices. A growing body of literature indicates that world oil supplies will become increasingly scarce and expensive in the coming years, due to the depletion of easily extractable reserves. This poses a significant threat to agricultural production in South Africa, which is overwhelmingly derived from oil-intensive commercial farming. To mitigate the risk of serious disruptions to food production and distribution, the agriculture sector may require government support in the form of temporary fuel subsidies and, possibly, prioritised fuel access in order to cope with oil price shocks and potential fuel scarcity. Furthermore, to boost resilience and improve sustainability for the longer term, the agriculture sector should embark on a programme aimed at gradually reducing the reliance on petroleum products by adopting practices such as conservation agriculture and agro-ecological farming methods. In addition, since the current food distribution system is heavily reliant on road transport, and thus exposed to fuel price and supply shocks, the mitigation strategy should aim at a partial relocalisation of agricultural production and consumption, for example, by developing urban agriculture.

Keywords:

• national food security
• oil dependence
• oil shocks
• sustainable agriculture
• relocalisation

JEL CLASSIFICATION:

• Q180
• Q400