Import tariffs on food in line for comeback in south africa
Thématique :
sud afrique
By Donwald Pressly and Tom Robbins / Business report /October 30, 2008
Cape Town - The department of agriculture and land affairs and the department of trade and industry were studying the possibility of increasing some import tariffs to protect local farmers in this time of global financial crisis, agriculture director-general Njabulo Nduli said yesterday.
Nduli confirmed that Southern African Development Community governments were discussing the possibility of building strategic grain stockpiles to boost regional food security.
While acknowledging that South Africa was very much part of "a globally competitive market", she said the current tariff structure for many food products encouraged imports of certain items.
This was particularly acute with regard to diary products in recent years. In effect, imports had battered the domestic diary market, she said.
Coupled with protective measures of certain product lines - which she said could include soya beans and flour - would be encouragement to add value to food products.
Nduli spoke to Business Report after appearing before the joint budget committee of parliament, co-chaired by ANC MPs Lorato Mabe and Mshiyeni Sogoni, during which she reported that R11 billion had been added to the adjustments to the agricultural budget last week.
Nduli said there was still no clarity on whether this was for agricultural support or if it included school feeding and other programmes to provide food support in the current global crisis.
She said South Africa was still strong in the production of certain commodities, "but our problem is processed foods, where we are a net importer".
An example was the export of tomatoes, which were reimported in cans from Italy or other EU states.
She said interventions were needed to reverse the trend of South Africa importing more than it exported. The focus of the department would be to create "one village, one product".
Agroparks were the way to go, with infrastructure supporting the beneficiation of one raw product, such as mangoes, into many different products, such as fruit juice and chutney.
"An agropark is a concept we are developing where your production is linked to the new product and its processing, which in turn is linked to your agrologistics and your markets. You produce locally and add value locally," Nduli said.
Meanwhile, the National Agricultural Marketing Council (NAMC) said it was investigating the possibility of the government holding strategic grain reserves.
Strategic grain reserves would be used primarily to deal with food shortage emergencies, but in addition, "buffer stocks can be used for price stabilisation", according to the NAMC's Food Cost Review, published this week.
Strategic reserves for stabilising the prices of volatile soft commodities implies that the government would prevent the price falling below a floor level by buying from the market.
"If the price goes above the ceiling price, then the government sells grain in the market by depleting its stocks until the price is driven down to below the ceiling level," said the government-established body.
Dawie Roodt, the chief economist at the Efficient Group, said yesterday that there was some merit in holding emergency reserves, but he was concerned about the state getting involved beyond that point.
"My biggest concern is that politicians get involved in the market and get it wrong, which could give the consumer a bigger price shock than if it were left to the market," Roodt said.
A second concern was that once politicians started to get involved in the economy they would not stop, particularly as pressure from the Left had increased, he added.
Kobus Laubscher, the chief executive of Grain SA, said he would like to see an inclusive investigation about what to do with the current maize surplus.
Laubscher said government intervention in the market could bring about price stability "if played correctly, but could be detrimental if not".
The government would need a skilled team.
Laubscher added that market interventions did not always lead to an optimal allocation of resources.
Other recommendations by the NAMC include ramping up investment in agriculture, including irrigation systems and other technology.
According to the NAMC, total investment in agriculture hit a high of more than R10 billion in the early 1980s, falling to R6 billion last year in real terms.
Investment in tractors, other machinery and implements showed a "significant" fall from 1982 to 1992, "after which it moved more or less sideways".
Investment in the fixed improvement component declined less dramatically from 1982 to 1992, "after which it shows a steady but slow increase".
The NAMC said: "The trends described are contrary to what is expected in a country where agriculture plays a major role in sustaining rural economies, where land reform is a major government imperative and access to food is regarded as a constitutional right."
Cape Town - The department of agriculture and land affairs and the department of trade and industry were studying the possibility of increasing some import tariffs to protect local farmers in this time of global financial crisis, agriculture director-general Njabulo Nduli said yesterday.
Nduli confirmed that Southern African Development Community governments were discussing the possibility of building strategic grain stockpiles to boost regional food security.
While acknowledging that South Africa was very much part of "a globally competitive market", she said the current tariff structure for many food products encouraged imports of certain items.
This was particularly acute with regard to diary products in recent years. In effect, imports had battered the domestic diary market, she said.
Coupled with protective measures of certain product lines - which she said could include soya beans and flour - would be encouragement to add value to food products.
Nduli spoke to Business Report after appearing before the joint budget committee of parliament, co-chaired by ANC MPs Lorato Mabe and Mshiyeni Sogoni, during which she reported that R11 billion had been added to the adjustments to the agricultural budget last week.
Nduli said there was still no clarity on whether this was for agricultural support or if it included school feeding and other programmes to provide food support in the current global crisis.
She said South Africa was still strong in the production of certain commodities, "but our problem is processed foods, where we are a net importer".
An example was the export of tomatoes, which were reimported in cans from Italy or other EU states.
She said interventions were needed to reverse the trend of South Africa importing more than it exported. The focus of the department would be to create "one village, one product".
Agroparks were the way to go, with infrastructure supporting the beneficiation of one raw product, such as mangoes, into many different products, such as fruit juice and chutney.
"An agropark is a concept we are developing where your production is linked to the new product and its processing, which in turn is linked to your agrologistics and your markets. You produce locally and add value locally," Nduli said.
Meanwhile, the National Agricultural Marketing Council (NAMC) said it was investigating the possibility of the government holding strategic grain reserves.
Strategic grain reserves would be used primarily to deal with food shortage emergencies, but in addition, "buffer stocks can be used for price stabilisation", according to the NAMC's Food Cost Review, published this week.
Strategic reserves for stabilising the prices of volatile soft commodities implies that the government would prevent the price falling below a floor level by buying from the market.
"If the price goes above the ceiling price, then the government sells grain in the market by depleting its stocks until the price is driven down to below the ceiling level," said the government-established body.
Dawie Roodt, the chief economist at the Efficient Group, said yesterday that there was some merit in holding emergency reserves, but he was concerned about the state getting involved beyond that point.
"My biggest concern is that politicians get involved in the market and get it wrong, which could give the consumer a bigger price shock than if it were left to the market," Roodt said.
A second concern was that once politicians started to get involved in the economy they would not stop, particularly as pressure from the Left had increased, he added.
Kobus Laubscher, the chief executive of Grain SA, said he would like to see an inclusive investigation about what to do with the current maize surplus.
Laubscher said government intervention in the market could bring about price stability "if played correctly, but could be detrimental if not".
The government would need a skilled team.
Laubscher added that market interventions did not always lead to an optimal allocation of resources.
Other recommendations by the NAMC include ramping up investment in agriculture, including irrigation systems and other technology.
According to the NAMC, total investment in agriculture hit a high of more than R10 billion in the early 1980s, falling to R6 billion last year in real terms.
Investment in tractors, other machinery and implements showed a "significant" fall from 1982 to 1992, "after which it moved more or less sideways".
Investment in the fixed improvement component declined less dramatically from 1982 to 1992, "after which it shows a steady but slow increase".
The NAMC said: "The trends described are contrary to what is expected in a country where agriculture plays a major role in sustaining rural economies, where land reform is a major government imperative and access to food is regarded as a constitutional right."
