Browsing by Author "Boonzaaier, Johann Du Toit Loubser"

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    An inquiry into the competitiveness of the South African stone fruit industry
    (Stellenbosch : Stellenbosch University, 2015-12) Boonzaaier, Johann Du Toit Loubser; Van Rooyen, Cornelius Johan; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics
    ENGLISH ABSTRACT: The purpose of this study was to undertake an inquiry on the competitive performance of the South African stone fruit industry since the early 1960s, with an emphasis on the more recent years since the mid-1990s, when the industry was deregulated. A comprehensive approach was applied in reaching conclusion in this study by employing a five-step analytical framework, built on well-established approaches by Balassa (revealed comparative advantage, RCA), Vollrath (relative trade advantage, RTA) and the Porter Diamond Model, adapted to accommodate innovative statistical methods to reflect differences in opinions and views more accurately. Competitiveness in this study is defined to give effect to the global trade orientation of the industry as the sustained ability of the South African stone fruit industry to attract investment by trading its produce competitively within the global marketplace, whilst continuously striving to earn returns greater that the opportunity cost of scarce resources engaged. Five phases were identified in the competitive performance of the South African stone fruit industry since 1961, showing the fluctuating nature of the performance of this industry: - Phase I (1961-1982): Increasingly regulated competitiveness - Phase II (1983-1990): Politically constrained competitiveness - Phase III (1991-1999): Economic deregulation and internal rivalry - Phase IV (1999-2007): Towards international competitiveness - Phase V (2007 – present): Increasingly sustained competitiveness The RTA calculations, including both exports and imports, showed that the industry is highly competitive, both internationally – in the Southern Hemisphere where this industry is only out-performed by Chile and locally – compared to other South African (SA) horticultural crops, with plums consistently claiming the top position when individual stone fruit types in the SA deciduous fruit category are analysed. Through the Stone Fruit Executive Survey (SFES), views and opinions of prominent industry role-players were critically employed to interrogate the topic under discussion. A total of 84 factors affecting the competitiveness of the industry were identified, and these were rated on a five-point Likert scale (where 5 were most enhancing and 1 was most constraining). This study expanded the analytical framework used in recent agri-competitiveness studies to verify and cross-check the results and findings through statistical procedures, such as cluster analyses, principle component analyses and Cronbach’s alpha. This broadened the scope of analysis by accommodating the variance in opinion statements from the respondents. As different cluster groupings based on functional value chain positions were analysed, it became clear that there were significant differences between the respondents involved in the primary production and packing/processing of stone fruit and the respondents involved in activities lower down the value chain, such as in pack houses/processors and exporters/marketers. Further down the value chain the respondents expressed more optimistic views and positive statements on competitiveness than those exposed to primary production risks and uncertainties. This confirms the importance to expand competitive analysis to different points in the value chain The rated factors were grouped into Porter’s six determinants and the general scored ratings yielded the two most enhancing determinants, being business strategy, structure and rivalry (3.55 out of 5) and related and supporting industries (3.14 out of 5). Production factor conditions (2.81 out of 5) and demand/market factors (2.76 out of 5) were identified as being less enhancing determinants. Chance factors (2.66 out of 5) and government support and policy (2.35 out of 5) were identified as the two most constraining determinants. The current approach is that the framework of Esterhuizen (2006) is applied to agriculture-related competitiveness studies. This study, however, investigated the extension of the conventional model by adapting the Porter diamond model within the frameworks of the Institute for Management Development’s World Competitiveness Yearbook (WCY) and the World Economic Forum’s Global Competitiveness Report (GCR), which generally focus on the macro-economic situation. It was confirmed that the stone fruit industry is integrated into and forms part of the ‘broader economic picture’. The results and findings of this study were discussed in a number of focus sessions with industry role players. A strategic planning framework was drafted, which consisted out of eleven industry level strategic proposals. Some of the most important strategic improvements to enhance competitive performance argued for in this study are improved industry-based lobby discussions, i.e. to build and strengthen the necessary communication between industry role players and government agencies through an improved strategic intelligence database, by focusing on aspects such as trade agreements, international market development and policy development.