This case study examines the effect of deregulation and trade reform on South Africa’s agriculture sector, which is highly dualistic consisting of a developed commercial sector and a subsistence farming sector. Deregulation and trade reform has led to substantial changes in innovation in the commercial agriculture sector, such as wine and fruit, leading to a large change in composition while innovation seems to have been more limited in subsistence agriculture, which lacks absorption capacity. Legal uncertainties related to land reform may also be a factor which can negatively affect innovation in the commercial farming sector. Keywords: innovation, deregulation, trade reform, South Africa, agriculture, wine, fruit, field crops, foreign investment, absorption capacity.
The aim of this paper is to assess the amount of "policy space" available to increase tariff protection in South African agriculture. To this end, formal definitions for agricultural produce, actual import data, applied tariff data and bound tariff rates and tariff quota information were used to investigate the extent to which it is possible and feasible to increase tariffs. The analysis shows that in general the policy space available to South African agriculture is limited because of, among others, WTO binding and treaty obligations under the EU and SADC agreements. Furthermore, it does not make policy sense to increase protection on most other products. Copyright (c) 2008 The Authors. Journal compilation (c) Economic Society of South Africa 2008.
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