According to the latest CPI inflation data, the price of food and non-alcoholic beverages increased by 7.1% year on year in June, contributing 1.1 percentage points to June's CPI inflation of 5%.

But Du Plessis said that, when compared with food inflation of between 8% and 13% in Brazil, Russia, India and China, there is still room for food inflation and prices to increase in SA.

"For farmers to be sustainable and keep on producing, it is critical that producer prices enable them to survive," he said.

Du Plessis referred to research about discrepancies between the prices that producers get for produce and what consumers pay.

According to the National Agricultural Marketing Council's Food Price Monitor, two litres of fresh, full-cream milk cost R14.83 in April this year. The average producer price was R2.89/l, or R5.78 for two litres. That means the farmer received only 38% of the retail price.

Du Plessis said an apple farmer received about 32% of the retail price of apples, while a wheat farmer gets 20% of the price a consumer pays for a loaf of bread.

A 2009 study by Vinpro shows that a grape farmer made a profit of 44c on a bottle of wine while a profit of about R1.07 per bottle is the sustainable minimum.

"Farmers carry the largest risk in the agricultural value chain," Du Plessis said.

"It is therefore important for consumers to understand the complexity of the agricultural value chain. The chain has many participants and it is not easy to blame any specific one (for higher prices)," he said.

Rising international food prices have been a risk to domestic inflation, although the strong rand has helped to buffer SA consumers from effects of these rising prices.

In announcing the latest decision on interest rates last week, Reserve Bank governor Gill Marcus referred to the food price indices of the IMF and the Food and Agricultural Organisation flattening out since the start of the year.

But Nkanyiso Hlongwa of the Bureau for Economic Research, said a lag between global and domestic food prices meant flattening international food prices would not show up in domestic figures immediately.

Stats SA's producer price index (PPI) data for June this week showed agriculture producer prices increased by 5.1% year on year in June, contributing 0.4 percentage points to June's PPI inflation of 7.4%.

John Purchase, the CEO of the Agricultural Business Chamber, said while international agricultural prices seemed to have stabilised they were set to remain relatively high and volatile due to uncertainty on commodity markets.

Du Plessis said foreign competition meant local producers' share of the consumer rand has been declining.

Last year SA imported 57% of its wheat and while this is expected to decrease to 50% due a rise in local production, Du Plessis said wheat import tariffs were not enough to protect the local industry.

"There needs to be more engagement between government and the industry to see if import tariffs can be lifted," he said.

"The playing field is not level for SA farmers who compete with imports. If the government is serious about agriculture and rural development, more protection needs to be investigated."