October 13, 2003

 

 

South Africa Hasten Change in Grain Import Tariffs to be Competitive

 

The South African (SA) government needs to speed up the time it takes to process changes to grain import tariffs, as this is hampering the competitiveness of the grain value chain, Chamber of Milling's executive director Jannie de Villiers said.

 

"This matter needs to be sorted out," he said at an agricultural outlook conference.

The strengths of SA's grain industry includes its well established nature, with institutions such as the Maize Trust, the Maize Forum, the South African Grain Information Service, the southern African Grain Laboratory and the agri-futures market run by the JSE Securities Exchange SA.

 

"The futures market is working well and the South African sector has quickly adapted to free market circumstances," he said.

 

The wheat and maize milling industry which De Villiers represents was pleased that government had "stuck to its guns" regarding the free market in agricultural products, he said.

 

However, white maize, which is SA's key staple produce, would remain a politically sensitive issue, with a temptation to allow the government to intervene in the market.

 

"The free market has improved the competitiveness of South African agriculture," De Villiers said.

 

On the downside, De Villiers said, SA's grain market remained a "no-grow industry", with both white maize and wheat milling figures on the decline.

 

Another negative was that the local grain market was an immature one with a number of "fly by nights", he said. These included trade agreements SA was considering of establishing with the US, and other major developing countries such as China, India and Brazil.

 

A key contention for De Villiers is the crop estimates committee, which he says has underestimated the country's commercial maize crop repeatedly.

 

In the long term, HIV/AIDS is expected to have a negative effect on demand for wheat and maize products, he said.

 

The lack of service delivery by Spoornet was also a major cause for concern for the domestic grain industry.

 

In 1985, 95% of SA's grain was moved by rail and 5% by road transport, while at least 50% is moved by rail and 50% by road this year, said De Villiers.

 

SA needs to accelerate land reform. The agriculture conference discussed the need to accelerate land reform and settle more empowerment farmers.

 

The current land reform programme is a market-assisted land reform process, which requires partnerships between government and the commercial agricultural sector. "There is a need for improved focus, collaboration and co-ordination between public and private institutions," land affairs department official CarmenVan der Merwe said yesterday. The current redistribution of land in SA is based on a willing buyer, willing seller approach.