The Trumpet Newsletter – Issue 2 – 02 March 2018
Trumpeting: Investment Trends in Africa,
The Trumpet is an economic research newsletter established for stakeholders to access research outputs of the NAMC. This is the second issue of the economic research newsletter. The newsletter seeks to summarise latest research along with communicating information on recent and upcoming events of interest to our stakeholders. We also profile some of the researchers at NAMC with a view to promoting an interactive culture between the NAMC and the readers of this newsletter. Lastly, snippets of important information and statistics on the agricultural sector locally, regionally and globally are presented. The information sharing will not only be valuable to stakeholders, it will also assist in keeping NAMC employees in the loop about MERC division’s activities. This newsletter is available through multiple channels, including email, hard copy, website and social media.
Agricultural Communication; we are stuck!
By: Majara Monamodi
The SA Poultry’s recent passionate plea to save its local market shook the consciousness of the agricultural sector. It bellowed a concern: are South Africans able to distinguish locally produced agricultural products from foreign agricultural products? More importantly,
are South African farmers really in charge of feeding us? The turn of events surrounding the poultry question necessitated an immediate introspection by the sector to start sincerely communicating. It is worthy to note that the agricultural sector enjoys tour de force in foreign markets with the disparities between export promotion and local promotion worlds apart.
WorldTrade Organisation Ministerial: Overview of the issues and outcomes.
By: Stephanie van der Walt
The eleventh Ministerial Conference (MC11) of the World Trade Organisation (WTO) was held in Buenos Aires, Argentina, from 11 to 14 December 2017. The Ministerial Conference is the highest decision-making body within the Organisation and was attended by delegates of the 164 countries which are members of the WTO, as well as a number of observer countries. South Africa was represented by Minister Rob Davies of the Department of Trade and Industry, Minister Senzeni Zokwana, Minister of Agriculture, Forestry and Fisheries and Deputy Minister of Trade and Industry, Gratitude Magwanishe.
Levy Expenditure on Export Promotion.
By: M.H Lubinga, N. Mazibuko, S. Ngqangweni, X.Y Potelwa and B. Nyhodo
South Africa’s industries in the agricultural sector spend some of the statutory levy income on Export promotion and market development (EPMD) activities. However, some industries argue that levy expenditure on EPMD activities generates satisfactory returns on investment. To provide empirical evidence in support of the arguments put forward, a study was undertaken by building a unique dataset based on levy expenditure on EPMD for four industries (citrus, deciduous fruits, table grapes and wine). Furthermore, an assessment of the impact of export promotion on exports, net agricultural income and social welfare over a ten years’ period (2006-2015) was conducted. Study findings suggest that on average, a unit increase in levy expenditure on EPMD leads to an increase in exports by
7.3 percent (table grapes and deciduous fruits), 5.6 percent (wine), 5.25 percent (citrus). Similarly, findings reveal that a unit increase in levy expenditure on EPMD is on average associated with a 7.5 percent, 4.9 percent, 4.3 percent and 3.6 percent increase in agricultural net income for table grapes, citrus, wine and deciduous fruits, respectively. For social welfare, levy expenditure on export promotion was
attributed to social welfare improvement across the four industries, and the improvement ranged from 0.2 percent to 0.4 percent per unit increase in levy expenditure on EPMD.
Assessing selected countries that receive food aid with specific reference to top imported agricultural products.
By: L. Phaleng, T. Ntshangase & B. Nyhodo
Food aid is known to comprise sources of internationally funded food that is provided to tackle hunger, either in emergency situations, or to assist with deeper, long-term hunger alleviation and to achieve food security. It is based on the three different categories that are meant to contribute towards food security, being programme food aid, project food aid, and emergency food aid. Despite the role that has been played by global food aid, there are still many countries that require humanitarian assistance from donors.
Agribusiness, trade and investment trends in Africa.
By: S. Lekgau, C.R Matlou, and H.M Lubinga
Agriculture is a huge business globally due to upstream and downstream opportunities. Africa derives most of the economic opportunities from agriculture compared to the developed and developing countries which derive contributions from the service and industrial sectors. This shows that Africa is still far from development and it will require a significant amount of resources to change the current picture of
dependency on agriculture to the other sectors of the economy.
Impact of European Union generalized system of preferences scheme on fruit and vegetable exports from East Africa.
By: M.H Lubinga, A.A Ogundeji, H. Jordaan and A.J Verschoor
Overall, in this article, a more precise approach for assessing how trade agreements influence trade at commodity level is proposed, and the European Union’s Generalized System of Preferences (EU-GSP) was used as an example on horticultural commodities from East Africa region. In simpler terms, the approach takes cognisance of the fact that trade agreements use various trade instruments, both tariff and non-tariff measures. In most instances (if not all anyway), the assessment of how trade agreements impact on trade flows focuses on tariffs only thereby ignoring the compounding effect of the nontariff measures, such as quotas, entry prices and specific duties, which are always entailed in the agreements.
How has consumer education influenced pork consumption in South Africa?
By: H.M Lubinga, S. Ngqangweni, N. Mazibuko and A. Balarane
Since deregulation, the pork industry collects statutory levies as provided for by the Marketing of Agricultural Products Act, No. 47 of 1996 (MAP Act). On average, an estimated annual levy of R 17.5 million is collected, of which slightly more than 50% is spent on consumer education/promotion. Consumers are educated about the health and nutritional benefits of pork and its products through SAPPO. Again, they are assured of a safe product as a result of the quality assurance and traceability scheme. However, there is uncertainty about the
extent to which the rise in per capita consumption of pork may be attributed to consumer education among other factors. The study evaluates the impact of consumer education on pork consumption in South Africa.
Transformation of smallholder farming to commercial farming.
By: E. Nekhavhambe, P.K. Chauke and E.N Raidimi
The South African government introduced several strategies aimed at assisting smallholders, largely black farming sector, to shift towards commercial farming, with minimal success. Certain programmes employed by government broadening smallholder market participation included the AgriBEE programme; Land reform programme; Strategic Infrastructure project (SIP) 11; Extension Recovery Programme; Statutory Measures and Comprehensive Agricultural Support Programme (CASP). A study was conducted to assess the factors that would
transform subsistence to commercial farmers in the Mutale Local Municipality, Vhembe District of South Africa.
Yolanda Potelwa was previously an Economist within MERC under the Trade focus area. In 2017, she graduated MSc Agricultural economics (University of Pretoria). Her role and responsibilities at NAMC included research, coordinating publications such as
Trade-Probe and Fruit-flow. Yolanda worked on the trade unit with supervision from Mr Bonani Nyhodo. “I am privileged that I have worked with him because I will be able to spread my wings,” she said. She further indicated that Bonani gives a room for growth and to make mistakes.
Watch video clips…
Land Expropriation Without Compensation talks intensify
Seminar – For Sharing Solutions
The NAMC hosted a seminar on the 2nd February 2018, where Mr Lindikaya Myeki from the University of New England (Australia) was sharing a presentation on behavioural change. The presentation was based on a preliminary analysis of business performance data pulled out from a behavioural change survey conducted by the ARC and the NAMC for the Australian Centre for International Agricultural
Research (ACIAR) project titled “High-quality markets and value chains for small-scale and emerging beef cattle farmers in South Africa”.