Agricultural Export and Import Status: South Africa - Example

Products South Africa is one of the developed countries in Africa with a service area of 1.22 million km2 and a population of 46.9 million people plus a per capital gross domestic product of USD 3530.It has a variety of products which are exported to other countries. South Africa has a dual agricultural economy whereby it has both the well developed commercial farming plus the subsistence based productions which are produced at the deep rural areas mostly. You find in South Africa, most of the agricultural land covers an area of 1.2 million square kilometers of land. It is also a one eighth of the size of the United States whereby it has seven climatic regions which range from the Mediterranean region to the subtropical desert and the semi desert regions. The presence of the coastline which covers an area of 3,000 kilometers with also seven ports has made the agricultural sector in South Africa to be well good hence it can produce a high quality of commercial agricultural products which can be exported to other countries hence leading to its economic growth. Some of the agricultural products in South Africa include cereals, meat plus tuber pulses, sunflower seeds, corn products, nectarines, wine among other exported products. For e3xample, report tells us that it produces 85% of all the meat which is consumed in South Africa hence meaning that its one of the world exporters of meat to other countries. The agricultural sector is the leading sector in South Africa whereby there are around 4,300 milk producer hence providing employment opportunities to most of the people. Agricultural sector is the largest employer whereby it employs 60,000 farm workers to work in their farms hence meaning that it has made majority of the people in South Africa to have increased standards of living since it employs so many people per year to work in their farms. (Anderson, Martin, and van der 2005). Other products found in South Africa are mineral products which arte said to be quite abundant. There are so many resources in South Africa which have led the country to the increased economic performance. Some of the minerals which are extracted include minerals like gold, copper, natural gas, platinum, coal, iron, nickel, phosphates, manganese, tin, ore, antimony, chromium, uranium, and diamond. These are some of the mineral products which are extracted and then exported leading to the increased growth of the economy. Gold is the leading mineral which is produced in South Africa unlike in other countries who do not have the gold mines. It has been in a position to improve since it mostly exports its gold to most of the developed countries hence leading to the economic growth of the country. (Anderson, Martin, and van der 2005). Another category of products which is produced in South Africa is the domestic food products. For decades, South Africa has remained an exporter of domestic foods whereby some of the domestic foods which are produced and then exported at a large scale include nuts, fruits, tubers, bulbs, animal produc5ts like meat and milk. An example of the milk producers in this country is Khoisan group domestication of cattle which is one of the leading producers of milk producers in Africa. It has a high production of milk and its by-products. (Anderson, Martin, and van der 2005). Stages of economic development The current major industries in south Africa is the automobile industry, mining, textile, iron, steel, fertilizer, food staffs, chemicals among other leading industries which has come up as a result of its growth in the economy. You find that most of these industries are in to the primary levels whereby they are manufacturing services, agriculture and mining sectors. The government has tried so much to help some of the new industries which have risen recently and in order for the government to achieve its objective, it has tried to provide some of the support services that are aimed at strengthening most of the social plus the economic foundations in to democratization. SA in this case is also promoting the economic integrations and the regional corporation like the involvement in many trade agreements say the WTO, SADC trade protocol, Africa growth and the opportunity Act, EU-SA free trade agreement, EU_SA wine and spirit agreements, SA customs union among other trade agreements. SA is also at the same time encouraging for development plus the liberalization of trade in goods and services and also integrating SA in to the world economy. It is due to this that the economy will be in a position to grow as a result of the globalization process. (Brown, Deardorff, and Stern, 2002). Agricultural export and import status The agricultural exporting firms in South Africa are the leading exporters in the country. They are too improving on their competitiveness hence in a position to compete with other world exporters of the agricultural products like the meat, sugar, wine, grapes, nectarines, citrus and nuts which are exported at a large scale. This is according to the World Bank report which was produced in the year 2002. For example out of research, it is known that it is the world exporter of avocados, ostrich products, tangerines, it is also the second biggest exporter of grape fruits which are grown at large scale here, it is also the largest biggest exporter of pears and plums in the world and also the fourth largest exporter of table grapes. It is due to this factor that it is the more developed country in Africa since it has a wide variety of products which are exported to other countries unlike other countries in Africa. On the other hand, gold is the leading mineral export. In all, farming in South Africa only contributes 8% of the economic activities which are done there whereby the largest group of the exported product is wine, citrus, maize, fruit, some of the delicious fruits such as pears, apples and apricots. The below diagrams summaries South Africans export from the year 1999-2003. (Brown, Deardorff, and Stern, 2002). South Africa Exports 1999 2000 2001 2002 2003 Ave Total South Africa products(millions) R165 R220 R245 R315 R275 R242 Total agricultural products(millions) R14.8 R15.8 R20.1 R25.5 R23.0 R19.8 Agriculture as % of total exports 8.95 7.53 8.18 8.37 8.08 8.18 Source: (Brown, Deardorff, and Stern, 2002). Competitive advantages South Africa has a number of competitive advantages which has led the country to compete well with other countries hence leading to the increase in its economic growth. Of its competitive advantages is the world class infrastructure whereby it has three deep water ports which has made shipping of its agricultural products to be quite effective. It has also three international airports whereby most of its perishable products like fruits can be easily exported to other countries as quickly as possible unlike other African countries. It has also a network of many roads and railways. South Africa has also a counter seasonality to Europe whereby Europe in this case provides a ready market for South Africa horticultural products. Due to the issue of globalization process, SA has been in a position to benefit so much since it exports most of its agricultural products to Europe which has provided a ready market for its products. The issue of its biodiversity has also contributed a lot since it has seven climatic regions which have mostly favored the farming sector. The trade agreements in SA are another factor. Most of the agricultural plus the agri- business activities are benefiting a lot from the increased market access to most of its key trading partners and a good example is the EU countries and US through a number of trade agreements and one of the trade agreements is the WTO. (Hertel, and Keeney, 2005). Political links to other countries A good example to explain this is the long term bilateral agreement with the European Union on trade and development. It was after joining to the EU union that the economy of SA has been in a position to grow hence leading to the growth of the economy. You find that the EU has been trying to support SA so that it can strengthen its economic and social foundations. It is through its economic link to the EU countries that South Africa has been in a position to export most of its agricultural and mineral products hence making a ready market for most of its products. This is one of the good initiatives since we know that the EU countries are on of the developed countries and hence having political and economic links to such countries will mean that trade will be effective hence leading to the realization of its competitive advantage. EU Corporation with SA has also led to the development and also trade liberalization of its goods, services plus capital hence integrating SA to the world economy. (Hertel, and Keeney, 2005). Position in the WTO negotiations SA share in to the WTO has declined for a number of years from the year 1960s when it used to be a strong member of WTO since most of the traded commodities in WTO are just a few commodities and that is why its participation in to this trade agreement has declined so much. You find that SA is one of the countries which is highly affected by the market fluctuations and the major reason to explain this phenomena is its little contribution to the world trade as long as its socialist economic policies. Most of the political and the civil instabilities are example of the causes of these low developments in SA. But due to this there are negotiations of participating and also improving its policies as far as WTO policies are concerned. Its review in some of the trade policies will in one way or the other help in improving the economic growth in SA. Its major challenge in this case is to diversify its exports to include exporting to other countries but not only to the EU and US only. You find that SA trade policies are not admirable in that they are pulling the economy down. One of these policies is the issue of trade tariffs for most of the African countries which have fallen relatively low. You find that there are set barriers and these are trade tariffs which have been imposed on the African exports such as wood and clothing hence leading to poor development. Expensive transport plus the telecommunication services have also pulled the economy low. (Hertel, and Keeney, 2005). Agricultural policies Since the abolition of the SA apartheid policy, the economy of SA has been in a position to develop extensively through the many policy reforms which are geared towards establishing of an open and a more oriented market economy. These policy reforms are geared towards ensuring that there is increased production plus the increasing the internationally competitive agricultural sectors through the provision of incentives and the issue of the reduced tariffs to most of the local producers so that they can be in a position to compete well with the large scale farmers. Partial reforms were made that could address the domestic markets to cater for the needs of the domestic farmers. (Word Bank Report. 2002). Conclusion SA is the leading developed country in Africa. This is because of its geographical location which has made it to effectively trade with the EU countries hence making the country to have its improved economic growth. Reference Anderson, K. Martin, W. and van der M. (2005): Doha Merchandise Trade Reform http://www.worldbank.org/trade/wto. Brown, D. Deardorff, A. and Stern, R. (2002): Computational Analysis of Multilateral Trade Liberalization. University of Michigan Discussion Paper 490, December 12, 2002. http://www.spp.umich.edu/rsie/workingpapers/wp.html. Hertel, T. and Keeney, R. (2005): The Relative Importance of Import Barriers, Export Subsidies and Domestic Support. Washington: World Bank. Word Bank Report. (2002): Agricultural exports and import status in South Africa. South Africa. Read More