Opinion: A basic income grant is our most potent weapon in the fight against hunger

By Neil Coleman

See original post here.

A shocking 64.7% of all South African households have expenditure on food per person that is below the food poverty line. Hunger creates a ticking time bomb which can be devastating when the fuse is lit.

Much of the discourse on hunger in South Africa tends to be about food systems. While important, this misses a critical issue: the relationship between hunger and income poverty. 

Before addressing this, it is worth making some general observations about the politics of hunger in South Africa (and globally):

• There is sufficient food in South Africa to feed everybody. But hunger is widespread. Hunger, globally and in South Africa, is man-made;
• Hunger can be eradicated, or massively reduced in a short time. President Lula da Silva showed this with the Zero Hunger campaign in Brazil, which took that country off the UN hunger map;
• At its most extreme, hunger is used as a weapon of war, and in the case of Gaza, a weapon of genocide;
• The ravages of hunger in South Africa may be less obvious and brutal, but they are no less real, resulting in thousands losing their lives (malnutrition being the underlying cause of a third of child deaths in South Africa), and many more permanently scarred;
• High unemployment, income poverty, low wages and lack of adequate social security is a toxic combination that breeds hunger and malnutrition; and
• Hunger and food security is complex – it also relates to food systems, retail monopolies, eating habits, etc. Such factors need to be addressed. There is nevertheless a stark reality: if people don’t have enough income to buy sufficient food, they will constantly face the spectre of hunger.

 The relationship between hunger and social protection 

Imagine if every South African was guaranteed a minimum income floor sufficient to meet their basic food needs. 

The Institute for Economic Justice conducted a study on the relationship between hunger, income poverty and social protection and reached the following four basic conclusions: 

• Food insecurity in South Africa is closely tied to income poverty, with millions of households struggling to access sufficient nutrition despite the country producing enough food for everyone;
• Expanding social protection, particularly through a Universal Basic Income Grant (UBIG), is key to addressing hunger;
• By reducing income poverty, a Universal Basic Income can help ensure that people have the money to buy enough food, improving overall health and well-being; and
• Over time, reducing food insecurity not only benefits individuals and families but can also support sustainable development by creating a virtuous cycle where improved nutrition leads to higher productivity of the economy, better educational outcomes, and inclusive economic growth.

 Income poverty and hunger in South Africa 

We have a crisis of income poverty in the country that underpins the crisis of hunger. This is based on certain key realities:

• Astronomical levels of unemployment: an expanded unemployment rate of more than 42%, with 12.2 million out of work. More than 80% of the unemployed are long-term unemployed, and three million have given up looking for work;
• High levels of working poverty, with many people earning too little to afford a basic diet. A 2023 Wits University hunger study showed that 40% of households with an income of between R2,000 and R5,000 experienced food insecurity or were at risk of hunger; and
• Social grants which are below the food poverty line. The R530 Child Support Grant is about two-thirds of the food poverty line of R790 per month. The R370 Social Relief of Distress (SRD) grant for adults is less than half the food poverty line.

The HSRC finds that a shocking 64.7% of all households have expenditure on food per person that is below the food poverty line (FPL). This means that nearly two-thirds of South Africans are food-insecure. 

There are serious challenges with definitions in the literature as to what constitutes hunger, food insecurity, etc, and therefore with measuring the depth of the problem. This needs to be addressed. 

How do people feed their children and themselves, given these dire realities? 

• The 2023 Wits hunger study found one in five South African households sends a member of the family out to beg for food regularly. When I point to this study people say that can’t be possible in a wealthy country like South Africa! But this is the reality;
• Many people take on debt to buy food (40% of South Africans borrow to buy food), or borrow from friends and family; and
• Many others simply don’t cope, and face extreme hunger, with some resorting to desperate measures to deal with their situation, including crime and suicide. Mental illness arising from the stress of hunger is rife.

 So what do we do? 

Systemic interventions are needed, including through transforming food systems; combating concentration and profiteering in the food chain, particularly retail; controlling the prices of basic foods, and ensuring their accessibility in poor communities through markets and public outlets; and ensuring a particular focus by the public sector on nutrition for young children through school meals, etc.

Many of these proposed interventions were contained in the Food for All commitments in the ANC 2009 Manifesto, but most haven’t been implemented. Such interventions are important, but many of them will take considerable time. 

However, we don’t have the time. We need rapid high-impact interventions that will end the scourge of hunger. Critical here is to ensure people have adequate income for their basic food needs.

Too many interventions being proposed to combat hunger, while well-meaning, fail to address the fundamental challenge of income poverty. These include food vouchers, subsidies to retailers and even expanding VAT exemptions on basics.

While many of these interventions will have a significant cost to the state, and may marginally alleviate the crisis, they are not all guaranteed to trickle down to those who need them most, and don’t adequately address the crisis of income poverty or hunger. 

Improving and expanding basic income support is key to combating hunger. The evidence, in South Africa and internationally, is that the most powerful and direct way to help people to combat hunger is to put income directly into their hands, combined with measures to keep the price of essential foods down and easily accessible to everyone. 

Evidence from a number of studies is that even the very small R350 (now R370) SRD grant has played a significant role in mitigating hunger, and that about 93% of SRD grant beneficiaries spend their grant on food. But the grant remains too far below the food poverty line, currently at R796 per month. 

So, expanding and improving the SRD grant as a basis for a permanent system of basic income support, at least at the level of the FPL, would play a critical role in combating hunger. 

But this needs to be done together with improving other aspects of the social assistance framework. 

The Child Support Grant is not able, at its current level, to eliminate child hunger.

First, because its value is far too low, and is insufficient to cover a child’s food needs. Second, even if the Child Support Grant is raised to the FPL it won’t be able to eliminate child hunger, because, as the evidence clearly shows, the grant is shared within households whose adult members lack sufficient income support, which dilutes the benefit. 

This is why it is so important to have both a system of guaranteed basic income for all members of the household, and to raise the Child Support Grant to the FPL. 

This combination of an expanded and improved SRD/adult basic income, and an improved child grant at the FPL will be able to rapidly eliminate extreme forms of hunger. It is important though that millions who are currently being unfairly excluded from the SRD be brought into the social assistance net. 

The Institute for Economic Justice and #PayTheGrants (#PTG) legal action on the SRD grant seeks to address the unfair exclusion of millions of applicants, and thus secure the constitutional right of SRD grant beneficiaries to social assistance.

But this case is also an action to secure the right to food: up to 18 million South Africans, and more than half the country’s population, if you include dependants, stand to benefit if there is a positive judgment which will enable them to access food for themselves and their families.

Civil society organisations continue to hold the government to its commitments to introduce a permanent system of basic income support. There is broad civil society agreement, expressed by the Universal Basic Income Coalition, that the introduction of basic income should start at the food poverty line as a platform to progressively realise universal basic income set at the Upper Bound Poverty Line (UBPL) over time. 

ADRS modelling conducted jointly with the Institute for Economic Justice shows that progressive introduction of basic income at the UBPL can sustainably be achieved by 2030, with beneficial results to the economy, employment, poverty and inequality. This would massively reduce, if not totally eliminate, hunger in the country.

The cost of basic income support 

The question that is always asked is, would a system of basic income be affordable? There is extensive evidence that with the necessary political will, which requires us to inter alia elevate the fight against hunger to the top of the national agenda, this intervention can both be sustainably financed, and significantly contribute to economic development.

There are multiple avenues for domestic resource mobilisation, and research has shown that there are a variety of financing options that can be used to finance such a grant in South Africa. 

It is important to broaden the lens with which we examine this question. Narrow bookkeeping calculations, which we see so often in the public debate, of the number of beneficiaries multiplied by the value of the grant (the gross cost) neither capture the dynamic economic benefits of this large-scale income transfer to the poorest communities, nor the real costs after the economic returns to the fiscus in the form of increased VAT, and increased corporate tax take, etc (the net cost). The net (or real) cost could be as low as 50% of the gross (nominal) cost. 

Extensive international and local evidence demonstrates that income transfers have a range of economic development impacts, ranging from a stimulus to local economies (particularly those in a depressed economic state), to promotion of small business, promotion of employment, and job seeking.

International evidence suggests that income transfers have particularly high economic multipliers in developing countries and those with high levels of inequality. South Africa clearly ticks these boxes. 

In addition to these economic impacts of income support, there are a range of social benefits that arise in areas such as health and crime, which create significant indirect savings for the state and society. International evidence shows that the cost of poverty is extremely high when you consider, for example, the costs to the health system, including from malnutrition and hunger-related illnesses. A system of basic income could radically reduce these costs.

I conclude on a sobering note: apart from the social price society is paying for hunger in terms of malnutrition and the multiple negative impacts it has on children and adults, hunger creates a ticking time bomb which can be devastating when the fuse is lit.

Costs of the looting and riots in July 2021 exceeded R100-billion (R70-billion in eThekwini alone) – more than the amount required to introduce basic income at the level of the food poverty line.

Nor should it escape us, that while ostensibly “political”, reports clearly suggest that the events of 2021 had a strong element of “food riots”. 

Penny-pinching technocrats need to think more carefully when they make their calculations.