International comparison of agricultural exports : South Africa and the Cairns Groups

Mosoma, Khutsi Peace Wellington (2004-12)

Thesis (MScAgric)--Stellenbosch University, 2004.

Thesis

ENGLISH ABSTRACT: The study addresses two important research questions which are in essence motivated by the trade policy reform that took effect in the 1990s to reverse decades of inward industrialisation strategies towards outward industrialisation strategies to promote economic growth and development. This raised the expectation that a movement away from low-demand growth products towards commodities with stronger demand growth and buoyant price trends would be encouraged. The first central question that this study addresses is the extent to which South African agricultural exports are moving up the value chain relative to the agricultural exports of the other members of the Cairns Group. The second research question that the study addresses is to determine whether South Africa's movement up the value chain (value adding activities) in agricultural exports is more competitive than the other members of the Cairns Group. To adequately address the first research question data from the Food and Agricultural Organisation (FAO), Trade and Industrial Policy Strategies (TIPS) and World Trade Organisation (WTO) databases were used to examine their trade perspectives. The second research question was addressed by applying Relative Comparative Advantage (RTA) using data from the FAOSTAT 2002 to determine each country's competitive status in selected agro- food chains. The results show that South Africa managed to surpass all other members of the Cairns Group, except Chile, Philippines and Bolivia, whose export structures are highly dominated by high-value products relative to South Africa in terms of the movement up the value chain in agricultural exports. This is the case despite the fact that countries such as Argentina, Australia, Brazil, Colombia, Costa Rica, Indonesia, New Zealand, Thailand and Uruguay have managed to increase their percentage export value of high-value agricultural products and that South Africa has experienced a decrease in the percentage export value of high-value products. The results also clearly show that the food chains in Costa Rica, Paraguay, Thailand and South Africa are generally marginally competitive, whilst the food chains in Canada, Chile, Colombia, Indonesia and Uruguay are only just marginally competitive as many of their RTA values are situated around zero. The food chains in Guatemala, Malaysia, New Zealand and Philippines are internationally uncompetitive. And the food chains in Argentina,Australia and Brazil are internationally competitive. The analysis also reveals that competitiveness decreases in all these countries when moving from primary to processed products in the agro-food chains which implies that value-adding opportunities are constrained.

AFRIKAANSE OPSOMMING: Hierdie studie spreek twee belangrike navorsingvraagstukke aan wat in wese gemotiveer is deur die handelsbeleidshervormingsproses wat in die 1990s 'n aanvang geneem het. Dekades van intern-gerigte industrialisasiestrategieë is na ekstern-gerigte industrialisasiestrategieë omgeskakel om sodoende groei en ontwikkeling aan te moedig. Hierdie proses het die verwagting geskep dat 'n beweging weg van produkte met lae groei in vraag, na goedere met 'n sterker groei in vraag en veerkragtige prystendense sal aanmoedig. Die eerste sentrale probleem waarop in hierdie studie gefokus word is die mate waartoe Suid- Afrikaanse landbou-uitvoere in die waarde-ketting op beweeg het relatief tot die landbouuitvoere van die ander lede van die Cairns Groep. Die tweede vraag wat die narvorsig aanspreek is an vas te stelof Suid Afrika se waardeletting oktiwiteite in landbou uitvore meer kompeterend is as die van onder lede van die Cairns Groep. Om die eerste navorsingsprobleem voldoende aan te spreek, is data van die Voedsel en Landbou Organisasie, Handel en Industriële Beleidstrategieë en die Wêreldhandelsorganisasie gebruik. Hierdie organisasies se databasisse is gebruik om handelsperspektiewe te bepaal. Die tweede navorsingsprobleem is aangespreek deur die toepassing van die Relatiewe Vergelykende Voordeel (RVV) op die data bekom van die FAOSTAT 2002. Hierdeur is elke land se mededingende status in sekere geselekteerde agri-voedselkettings bepaal. Die resultate wys dat Suid Afrika daarin geslaag het om die ander lede van die Cairns Groep verby te steek, met die uitsondering van Chilli, die Filippyne en Bolivië, waar uitvoerstrukture gedomineer word deur hoë waarde produkte relatief tot Suid Afrika. Hierdie tendens is ten spyte daarvan dat lande soos Argentinië, Australië, Brasilië, Colombië, Costa Rica, Indonesië, New Zealand, Thailand en Uruguay daarin geslaag het om hul persentasie uitvoerwaarde van hoë waarde landbouprodukte op te stoot, en dat Suid Afrika, daarenteen, ervaar het dat die uitvoere van hierdie produkte afgeneem het. Die resultate toon duidelik dat die voedselkettings in Costa Rica, Paraguay, Thailand en Suid-Afrika oor die algemeen marginaal kompeterend is, terwyl die voedselkettings in Kanada, Chile, Colombië, Indonesië en Uruguay tot 'n mindere mate marginaal kompeterend is aangesien hul RVV-waardes rondom nul lê. Die voedselkettings in Guatemala, Maleisië, Nieu-Seeland en die Filippyne is internasionaal nie-kompeterend, met die voedselkettings in Argentinië, Australië en Brasilië wel internasionaal kompeterend. Die analise wys ook dat die mededingendheid afneem in al hierdie lande wanneer hulle van primêre na geprosesseerde produkte beweeg in agri-voedselkettings, dit impliseer dat waarde toevoeging geleenthede tot produkte beperk is.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/49994
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