C.J. van Rooyen

An inquiry into factors impacting on the competitiveness of the South African wine industry

Abstract This article is aiming to provide a comprehensive and understandable statement about the competitiveness of the South African wine industry. A measurement of the competitive performance of the South African wine industry—the WINE COMPETITIVENESS INDEX (WCI)—indicates that South Africas wines are internationally highly competitive with a sustainable and increasing positive trend over recent years. The wine industry in South Africa also shows positive trends in competitiveness in the long run and it should not lose its competitiveness status in the near future if its dynamic ability to continue to trade is sustained. An analyse of the key success factors that established competitive advantage and constraints that impacted negatively on competitiveness of the wine industry through the—WINE EXECUTIVE SURVEY (WES)—indicates that for the present intense competition in the market, the production of affordable high quality products, stringent regulatory standards in the industry, efficient supporting industries, and the availability of internationally competitive local suppliers of primary inputs are the major success factors to the competitiveness of this industry. The major factors that impact negatively on the competitive success of this industry are the strong Rand, fluctuations in the exchange rate, trust in the political support system, competence of personnel in the public sector, crime, South Africas labour policy and the growth and size of the local market. These factors should be crafted into a Strategic Plan for the industry.

PROGRESS WITH DIFFERENT LAND REFORM OPTIONS IN SOUTH AFRICA

The land reform programme of the South African government has three focus areas, namely restitution of land rights to the victims of forced removals, redistribution of land to the disadvantaged and tenure reform aimed at promoting security of tenure for all. In realising a programme of rapid and effective land reform it is important that all possible options of land transfer to previously disentitled South Africans should be pursued. This paper briefly describes the different options for land reform in South Africa and discusses the progress made in implementing the land reform programme of the government and each of the options outside the programme. Based on current trends in the land redistribution programme and private land and a number of other assumptions it is estimated that around 0.39% of commercial farm land in South Africa could be transferred through a combination of models to less advantaged groups by the end of 1996.

Strategic focus areas and emerging trade arrangements in the South African agricultural industry since the demise of the marketing boards

Abstract This paper investigates the responses of agribusiness managers to drastic changes in the policy and marketing environment of South African agriculture. The process of deregulation and liberalisation of agricultural markets exposed agribusiness managers to international trends, which required new institutions and relationships. Based on a survey conducted among business managers, we explored emerging growth strategies, strategic focus areas and coordination preferences. Results suggest that managers prefer a growth strategy based on market penetration and market development. Important strategic drivers are value-adding and power drive. Managers expressed their preference for increased coordination and cooperation resulting in relation-based contracts and equity-based alliances.

CONTRACTUAL RELATIONSHIPS BETWEEN SMALL- HOLDER SUGARCANE GROWERS AND MILLERS IN THE SUGAR INDUSTRY SUPPLY CHAIN IN SWAZILAND

Abstract This paper proposes and analyses a model of relationships between smallholder sugarcane growers and millers in the Swaziland sugar industry supply chain. In particular, it identifies the behavioural factors that contribute to the level of satisfaction that sugarcane growers perceive in their relationship with the millers. Using recursive models and multiple regression analysis, the results indicate that higher levels of trust lead to higher levels of cooperation that, in turn, lead to higher levels of commitment by the smallholder growers to the business relationship. Cooperation is also an antecedent of the benefits and of the satisfaction that these growers gained from the relationship. These results agree with a priori theory that trust, cooperation, strategic benefits, commitment and absence of opportunistic behaviour are essential elements for a successful relational exchange. The findings imply that both cane growers and millers need to focus on initiating, signalling and disclosing their behaviours in an effort to improve their relationship with each other. A relationship founded on trust and mutual respect is more likely to succeed than a relationship of convenience supported by legal contingencies. Therefore, relationships characterised by trust and physical and psychological commitment as well as cooperation between exchange parties is more important for mutual benefit and good quality relationship.

COMPETING AT THE "CUTTING EDGE": OPPORTUNITIES FOR AGRIBUSINESS PARTNERSHIPS AND CO-OPERATION IN THE SOUTHERN AFRICAN REGION

What are the opportunities for agricultural business, trade and co-operation in Southern Africa and, in particular, South Africa and Zimbabwe—two of the most significant economies in the SADC region? The competitiveness status of agribusiness -from a global viewpoint -in sixteen food and fibre supply chains in Zimbabwe and South Africa is determined in this study using the Revealed Trade Advantage method of Balassa. Based on this status, there is potential in certain agro-food chains for supply chain integration and co-operation between agribusinesses in South Africa and Zimbabwe. Such partnerships will improve competitiveness and will allow agribusinesses to compete at the “cutting edge” in the global environment.

DETERMINANTS OF COMPETITIVENESS IN THE SOUTH AFRICAN AGRO-FOOD AND FIBRE COMPLEX

The competitiveness of the South African agro-food and fibre complex depends on a number of factors: technological, socio-political and economic. This paper attempts to identify and analyse such factors by using a framework of analysis proposed by Michael Porter (1990). Appropriate measures to increase competitiveness are proposed. These include improved supply chain management, cost reduction, contractual pricing and the establishment of a clear “agribusiness development policy”.

The informal food marketing system in urban environments: Case studies of Kagiso and Orange Farm

The rapid development of urban townships and the failure of the formal sector to meet the township demand have led to the emergence of informally organised marketing systems, which have certain advantages over their formal counterparts. This note presents the findings of a study on the informal marketing of vegetables and fruit in two townships of Gauteng Province, namely Kagiso and Orange Farm. The data collection procedures are discussed first and then the results are presented with regard to the kinds of vegetables and fruit sold, their pricing, supply and transport, and the constraints faced by informal traders.

EQUITY SHARING AS A (UNIQUE) LOCAL AGRARIAN REFORM EXPERIENCE: PERCEPTIONS OF FARM WORKERS / AANDELEVERDEUNGAS 'N(UNIEKE) PLAASLIKE LANDELIKE HERVORMINGSONDERVINDING: PERSEPSIES VAN PLAASWERKERS

This paper explores progress with the initial practical experience with agrarian reform in South Africa with special focus on the new ‘equity sharing’ model. It particularly discusses the current understanding and perceptions, and expectations of the beneficiaries, namely farm workers. A qualitative survey was done on two sites, one in Grabouw in the Western Cape, and the other in Badplaas in Mpumalangal, where equity schemes are currently at a pre-implementation phase.

CHALLENGING THE PARADIGM: HOW TO EXTEND CONVENTIONAL AGRICULTURAL ECONOMIC ANALYSIS TO SUPPORT AGRIBUSINESS IN THE NEW GLOBAL ECONOMY

Agribusinesses in the global agricultural and food system are experiencing formidable competitive pressures. Agricultural supply systems are exhibiting innovative production arrangements, contracts, and closer vertical marketing arrangements to increase efficiency and profitability through greater market co-ordination. The complexity of the emerging agricultural marketing structures necessitates an appropriate research paradigm to analyse and understand these changes. Constructivism is proposed as an applicable research paradigm and a potential research framework for the analysis of supply chains is discussed.

A STRATEGIC ANALYSIS OF THE INFORMAL AGRIBUSINESS SECTOR: A CASE STUDY OF THE PRETORIA CUT FLOWER STREET-SELLERS

“You can see them on every comer, colouring the streets of Pretoria and giving the city an enjoyable atmosphere.” (World Bank Study, 1995) Informal cut flower street-sellers in Pretoria, South Africa, were interviewed to answer questions such as: Where do they come from? Where do they obtain their flowers from? What is their market share? What do they earn?, What support do they require? etc. The main findings show an income distribution per seller of between R125—R1992 per week; the major problems relate to quality and reputation of flowers; a weak support structure and infrastructure and constrained capacity to sustain the business effort. The major strategies proposed focus on solving these problems.