Dirk Esterhuizen

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.

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”.

Measuring the agribusiness decision environment: Constructing an agribusiness confidence index for South Africa

Abstract South African agribusinesses are experiencing far reaching changes. Economists have developed indicators, generally known as indexes, to measure relative change in the industry. In this article the methodology to construct a business confidence index for agribusiness in South Africa is discussed. The objective of such an index is to determine the business confidence of agribusinesses as accurately as possible. Some 80 agribusinesses in South Africa are at present participating in the AGRIBUSINESS CONFIDENCE INDEX. For the first quarter of 2002 the index points to a 20% improvement in the business confidence of South African agribusinesses compared to the same period the year before, while in the second quarter the index was up 14% on the previous year. This increase in confidence goes hand in hand with some other positive trends in the agricultural sector of South Africa regarding competitiveness and investment.

THE COMPETITIVENESS OF THE AGRICULTURAL INPUT INDUSTRY IN SOUTH AFRICA

The South African agricultural industry is consistently challenged to increase it, competitiveness. The agribusiness supply chain starts with the input sector. The objective of this paper is therefore to determine the competitiveness of the various agricultural input industries in South Africa by using Balassas method of Repealed Comparative Trade Advantage. This status will then be related to performance of the agricultural industry as a whole. South African manufacturing of farming requisites as a whole are relative marginally competitive in the international area. However, positive trends in competitiveness is observed. The agricultural machinery industry is not competitive but is improving. The fertiliser industry is becoming increasingly more competitive while in the pesticides industry there is a decrease in the ability to compete internationally. From 1995 there is a relatively high and positive correlation between the competitiveness of the input industry and the agro-food industry in South Africa. This relationship substantiates tile claim that fundamentally the South African agricultural economy is more competitive today then a decade ago.

KARNAL BUNT: THE ECONOMIC RISK IMPOSED AND THE ECONOMIC IMPACT OF QUARANTINE AS CONTROL MEASURE

Abstract The aim of this article is to estimate the risk imposed by Karnal bunt and then to explore the economic impact of both quarantine as control measure, and of regulation concerning Karnal bunt, on the South African wheat industry. This disease occurred in South Africa for the first time during the 2000/01 wheat production season on a farm near Douglas in the Northern Cape. The economic impact of various control measures and regulations with regard to Karnal bunt can be assessed by means of an efficiency analysis using a cost-benefit approach. It was found to be economically acceptable to implement quarantine on the Douglas area in only a “worse case” scenario. In all other scenarios it did not made any economic sense to impose a quarantine on the Douglas area.