Competitiveness of South Africa's agri-food commodities

Abstract

This research aims to determine the competitiveness of South African agri-food products and the factors that influence them. The study applied a comparative advantage (RCA) index, Lafay Index (LFI), Export Diversification Index (EDI), Major export category (MEC), Hirschman index (HI), and regression analysis. The study revealed a mixed result of RCA and LFI of agri-food commodities during 2000–2018. Some commodities such as tobacco and rawhides have a comparative advantage. On the other hand, vegetables, fruit, and coffee showed a comparative disadvantage. At the same time, the LFI revealed a significant comparative advantage from 2000 to 2003 for agri-food commodities of fish and sugar, sugar preparations, and honey. EDI was near zero for all commodities, indicating that the trading structure was less concentrated. Hirschman index (HI) demonstrated that all commodities showed a reduced concentration throughout the study period. The results of regression analysis on factors that influence the competitiveness of agri-food commodities were varied. Agriculture productivity and GDP per capita had a favorable impact on comparative advantage. Macroeconomic stability had a mixed result, with agri-food commodities having positive and negative effects. South Africa had a less concentrated trade structure and did not depend on international trade from the agri-food industry. These evaluations provide policymakers with information on agri-food competitiveness and the factors that influence the industry's competitiveness.

Keywords

• agri-food industry
• competitiveness
• revealed comparative advantage
• lafay index
• land productivity
• labour productivity