Transcript total unprocessed agricultural products

Impact of trade agreements
on the agricultural sector
Elaine Alexander
Chairperson: Agri SA
Commercial Policy Committee
Content
• About Agri SA
• Some economic realities in SA
agriculture
• Producer Support Estimates (PSE)
• SA Agricultural trade
• Trade Agreements
• Costs and Trade Factors Impacting
Agricultural Value Chains
Agri SA
• Agri South Africa is a federal organisation
which promotes, on behalf of its members, the
sustainability, profitability and stability of
commercial agricultural through its
involvement and input on national and
international level
• Represent commercial and emerging farmers
through:
– 9 provincial unions
– 24 commodity organisations
Economic Realisties in SA
Agriculture
Number of farming units
Source: Stats SA, 2007
The cost squeeze for SA farmers,
2008 to 2012 (2005 = base year = 1)
Source: DAFF
Agriculture’s linkages with the rest of
the economy
• Backward linkages
– Purchases of goods such as fertilizers, chemicals
and implements
• Forward linkages
– Supply of raw materials to industry and the food
supply chain in general
• Approximately 70 percent of agricultural
output is used as intermediary products in
other sectors
7
Agriculture’s linkages with the rest of
the economy
• GDP multiplier for agriculture is 1.51. (Mullins ,2004)
– Increase of one rand in agric production will result
in an R 1.51 increase in the GDP of the country.
– On par with the GDP multiplier for the total
average economy of 1.58.
• Labour multiplier of 24.17 outweighs all other
sectors (Mullins, 2004)
– Well above the same multiplier for the economy as
a whole of 8.16.
8
Minimum Wages versus employment in
agriculture, forestry and fisheries (2003-2013)
Producer Support Estimates
(PSE)
The Producer Support Estimate (PSE)
is an indicator of the annual monetary value
of gross transfers from consumers and
taxpayers to support agricultural producers,
measured at farm gate level, arising from
policy measures, regardless of their nature,
objectives or impacts on farm production or
income.
Producer Support Estimates as % of gross
farm receipts, 2009-11 average
OECD Members
Producer Support Estimates, 2012
Emerging
Economies
Estimates of support to agriculture (PSE) in selected
non-OECD and OECD countries (2011)
China*
17.4
Ukraine*
5.5
Brazil*
South Africa*
4.5
2.2
Norway
58.0
Switzerland
54.0
Korea
53.0
Japan
52.0
Iceland
44.0
Turkey
20.0
OECD
19.0
EU
18.0
Canada
14.0
Israel
14.0
Mexico
12.0
USA
8.0
Chile
4.0
Australia
New Zealand
3.0
1.0
Source: OECD, Agricultural Policy Monitoring and Evaluation, 2012
0.0
5.0
10.0
15.0
20.0
25.0
30.0
* 2010 Info
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
Producer Support Estimate by commodity,
South Africa, OECD
Source: OECD
SA Agriculture trade
South African Agricultural exports and imports,
1990-2012
Source: DAFF
EXPORT AND IMPORT VALUE OF AGRICULTURAL PRODUCTS
(F.O.B) (R’million)
EXPORTS
TOTAL S.A. PRODUCTS
2005
2006
2007
2008
2009
2010
2011
2012
327 125.4 393 046.7 463 237.9 635 315.0 513 864.1 590 053.6 693 945.3 720 011.4
TOTAL AGRICULTURAL PRODUCTS
26 141.2 26 977.5 30 666.8
46 943.7 47 459.4 46 400.2 50 813.2 52 578.9
TOTAL UNPROCESSED
AGRICULTURAL PRODUCTS
11 073.3 10 460.4 12 530.1
20,992.6
TOTAL PROCESSED AGRICULTURAL
PRODUCTS
AGRICULTURE AS % OF TOTAL
EXPORTS
15 067.9 16 517.1 18 136.7
25 951.1 46 468.8 29 378.6 38 004.0 36 237.1
8.0
6.9
6.6
7.4
990.6 17021.6 12809.2 16 341.8
9.2
7.9
7.3
7.3
IMPORTS
TOTAL S.A. PRODUCTS
TOTAL AGRICULTURAL PRODUCTS
TOTAL UNPROCESSED
AGRICULTURAL PRODUCTS
TOTAL PROCESSED AGRICULTURAL
PRODUCTS
AGRICULTURE AS % OF TOTAL
IMPORTS
Source: DAFF
349 163.7 465 215.7 484 837.5 627 450.3 541 173.4 585 547.4 621 327.7 832 917.2
16 286.4 2 0 588.5 29 304.5
3 205.1
4 625.8
5 971.1
13 081.3 15 962.7 23 333.4
4.7
4.4
6.0
38 427.5 35 039.2 34 626.8 44 926.4 53 071.0
6 023.8
3 517.4
32 403.7 31 521.8
6,1
6,5
5.9
7.2
6.4
Regional composition of South Africa’s
export basket in 2012
South Africa’s Export Basket in 2012
Contribution by Agriculture to total South
African trade, 1990-2011
Increase after
deregulation and
liberalisation
Agricultural trade slower than
overall trade
Trade Agreements affecting SA
agriculture
Various trade agreements
• In place
– SACU
– AGOA
– SADC/EU Economic Partnership Agreement (EPA)
– EU TDCA
– EFTA
• Envisaged
– SA-India
– SADC-COMESA-EAC Tripartite FTA
– BRICS
AGOA
 The United States imported:
• $285 million (2012) worth of South African agricultural products;
• wine, macadamia nuts, citrus fruit and other consumer-oriented
food products
 South Africa’s imports of agricultural products from the
United States (2012):
• $287 million - intermediate goods for further processing locally and
consumer-oriented food products.
 Aiming to increase trade with Southern Africa
 The US Department of Agriculture reports that 2012 US
exports to South Africa of dry peas, lentils and chickpeas
rose to 9,340 MT, a massive increase of 170% over 2011.
EPA negotiations between the SADC EPA
Group and the EU
• SA requested improved access to the EU on 21 agricultural products, of
which the EU made an offer on 17 products
• The EU for its part also requested reciprocal access to the SACU market in
a number of product groups.
• At the level of SACU, we have made progress in meeting the EU demands,
and this is likely to be closely linked to one of the major outstanding areas
in the negotiations, a specific agricultural safeguard clause.
• SADC EPA Group’s request for a special agricultural pre-dates the surge in
poultry imports for the EU.
• Other areas which potentially affect the agro-food sector:
– Rules of origin
– Tripartite FTA and all-Africa FTA
– Export taxes
– The most favoured nation (MFN) clause.
Trade relations and agreements
with South-South Partners
Costs and Trade Factors Impacting
Agricultural Value Chains
2017-03-21
ELAINE ALEXANDER
Global Economic Crisis
Shift in Economic Power
New Political Alliances
Global Political Unrest
Global Terrorism
Tradability of Agri !
Failure of DOHA!
Inputs, Labour
Energy,
Regulation, Ports,
Compliance,
Freight, Credit
Exchange
Research
Costs
Increasing Regionalisation of Trade
Food Security –access & nutrition
Sustainability
Changing Consumption Patterns
Trans National Retail
Corruption
Trade
Drivers
Trade
Factors
?
VALUE CHAIN
Vineyard
Packhouse /Inspection
Transport
Container
Coldstore
Inland Depot
Container
Loading
Consumer
Export port /Coldstore
Ship
Supermarket
Import port
Transport
Transport
Coldstore
Discharge
Depot
Trade factors
• Tariffs & Non Tariff Measures, infrastructure, finance,
exchange rates, power factors of chain stakeholders
(private standards)
• PROTECTIONISM - Complexity Rules – RED Tape
• Barriers to trade 2007-08 47 new trade restrictions
2009 – 66 trade restrictions - 47 trade restricting
measures.
• Employment - EU EPA, Indonesia licensing
• Consumer – Sanitary barriers (Chemicals usage) non
science – EU
• Phyto sanitary access processes – lengthy - China,
non science - Japan
Protectionism
•
•
•
•
•
•
•
•
•
Russia - EU Pig ban (cattle and sheep virus?)
Russia – MRL Residues 0.03% ?
Indonesia – Port of Jakarta closure
China – Irish Pork Ban, Belgium Chocolate Ban?
Thailand – SA Deciduous Fruit Ban!
Subsidies – US $ 100m grant to Agriculture 2012
Export subsidies – EU,US, Japan, South Korea
Developed nations subsidise !
Developing restrict !
Trade/Market Access: Processes & Structures
Dept. of Trade &
Industry
Dept. of Agric
Traceability
Issues
(EU 178/ SA GAP)
Grading Stds
Directorate: Plant Health,
Quality and Food Safety
W groups
**SPS & Market
Access Working Group
Directorate: Int. Trade &
Business Dev.
NAMC
**Industry Working
Groups
*Agric. Trade Forum
SPS food
safety work
group
SPS MRL
work
group
SA PIP
Steering Comm.
Commercial Agric.
Provinces
Industry MRL
work groups (x2)
*WTO/Free Trade agreements/Policy, etc.
**Phytosanitary/Food Safety/MRL/Traceability/
SPS/TBT Policy Issues/PRA’s
SA/EU PIP
Priorities
Industry Phytosanitary
work group
Research Framework
/ Strategy
More stringent SPS Rules?
• EU – Ethephon MRL reduced 2010
– Reduced MRLs for pesticides
– lost 30 to 40 actives etc.
•
•
•
•
USA – FCM issues - irradiation
Brazil – ban on certain fertilizer etc. usage 2011
Indonesia – health certificate, closure of Port
Vietnam/ Cambodia / Kazakhstan – Pest Risk
Analysis required 2011
• Russia – Food safety
• China – Special steri markets – HK
E Alexander
33
Regional Fresh Produce SPS Notifications:
01/01/12 – 30/09/12
TOTAL = 316
F/S = 44.3%
P/H = 6%
TOTAL = 60
F/S = 33.3%
P/H = 3.3%
TOTAL = 40
F/S = 10%
P/H = 12.5%
TOTAL = 25
F/S = 20%
P/H = 4%
GLOBAL TOTAL = 950
Food Safety = 26.6%
= 14.8%
TOTAL = 271 Plant Health
TOTAL = 12
F/S = 15.5%
P/H = 32.5%
2017-03-21
F/S = 8.3%
P/H = 16.7%
ELAINE ALEXANDER
TOTAL = 124
F/S = 18.5%
P/H = 4%
TOTAL = 47
F/S = 14.9%
P/H = 17%
TOTAL = 55
F/S = 20%
P/H = 20%
What can be done?
• Take the lead
• Invest in building NTM capacity – Integrated communication and response systems
– Sound Domestic institutions – policy etc.
• IPAP 2 Quality and Safety Standards (Food
Control Body)
– Use available support mechanisms to develop best
practice production and market systems (Green box
and Amber box support)
• Build partnerships – pvt. and public e.g. Australia HAL,
Chile – Prochile
• Develop expert capacity
• Multilateral tool box – WTO, FTA’s, CODEX FVO
Thank you
Elaine Alexander – [email protected]
Dawie Maree – [email protected]