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An evaluation of the competitiveness of the agribusiness sector in South Africa.

EXECUTIVE SUMMARY

The objective of this paper is to conduct a comprehensive analysis on the competitiveness of the agribusiness sector in South Africa. Three instruments emerged from this viz the AGRIBUSINESS COMPETITIVENESS STATUS (ACS) index; the AGRIBUSINESS EXECUTIVE SURVEY (AES); and the AGRIBUSINESS CONFIDENCE INDEX (ACI). The framework developed in this paper combines quantitative and qualitative analyses to develop strategies to enhance the competitiveness of the sector. This study can act as a basis for strategic planning, policy development and strategic positioning by the agribusiness sector in South Africa and will allow for future monitory and anal) sis of competitive performance.

Keywords: Competitiveness, Confidence, Agribusiness, Porter Analysis, Relative Trade Advantage, Sooth Africa

INTRODUCTION

In today's global economy, where agribusinesses worldwide face an increasingly competitive trade and production environment, many questions are being asked about the competitiveness of the South African agribusiness sector. For example: "What is competitiveness?"; "How competitive are the sector?"; and, "How can it be measured practically?" The competitiveness of the agribusiness sector in South Africa furthermore depends on a number of technological, sociopolitical and economic factors. One of the most pervasive influences is that of the external environment, and in particular, the set of policies which operate in the market for agricultural goods. These factors have also a direct influence on the business confidence of agribusinesses in South Africa. Appropriate adjustments could therefore contribute to changing negative situations into positive status. It will however, be important to identify the particular set of factors which needs to be adjusted.

The main question to be answered by this paper is: "Can the South African agribusiness sector successfully compete on a sustainable basis within the global environment?" The result or outcome of being in a position to successfully compete will clearly be manifested in a number of propositions. These will include acceptable levels of profits and returns on resources invested in the South African agribusiness activities and the concomitant ability of such economic activities to consistently attract resources from other (non- agribusiness) economic activities to sustain the sector.

Five secondary questions are locked into this main question. The first question to be answered is: "How is competitiveness defined and measured?" The second question to be answered is: "How competitive is the South African agribusiness sector globally?" The third question that needs to be examined is: "What are the key success factors and what are the main constraints impacting on the competitiveness of the South African agribusinesses sector?" The fourth question to be considered is: "How favourable is the decision-making environment in which South African agribusinesses operates?" Knowing the state of competitiveness and the factors impacting on competitiveness the last question can be answered: "How can the competitiveness of the South African agribusiness sector be enhanced?" (I.e. the strategic approach to achieve and sustain competitiveness).

These questions are well motivated by Michael Porter (1998): "A firm must understand what (it is about its home nation that) is most crucial in determining its ability or inability to create and sustain competitive advantage in international terms."

In order to meet the challenges imposed by this situation, economic analysis have an important contribution i.e. to pinpoint inefficiencies and weaknesses in the business systems, whilst emphasizing elements that could provide a sustainable competitive advantage to the agribusiness sector in South Africa with regards to both the challenge of global competition, the satisfaction of customer demand and the incorporation of socioeconomic and equity considerations--and thus developing new competitiveness strategies to respond to these dynamic challenges.

DEFINING COMPETITIVENESS AND ANALYTICAL FRAMEWORK

A framework consisting of five steps was developed to answer the first question: "How is competitiveness defined and measured?" The five steps of the framework developed, consist of the following (see also Figure 1):

Step 1: Defining competitiveness: This step is important as it focuses the competitive measurement and analysis of the agribusiness sector in South Africa. The definition of competitiveness guides the choice of methodology and consequently the data needed and the gathering process. Four notions of competitiveness emerged, after a comprehensive study of the evolution of the competitiveness theory, as important in the context of agribusinesses operating for gains in the new globalized world economy, namely:

(i) The ability to trade for gain by competing at both export and import levels under real world conditions such as uneven economic "playing fields," distorted economies and different regimes.

(ii) The ability to sustain the gains achieved through the consistent mobilization and attraction of scarce economic resources from other, less competitive economic endeavours, thus allowing it to reinvest, innovate, expand, and perform in a sustainable and profitable manner.

(iii) The ability to predict change correctly and act upon such predictions in an innovative manner to mobilize rents and returns.

(iv) Competitiveness is not a clear theoretical economic notion but a business concept depending on profits, business strategies, corporate culture, etc. and also non-economic issues such as innovation, ethics and political stability. Economics has sometimes a too narrow scope on competitiveness. Competitiveness is a holistic viewpoint on the continuously ability of companies to exploit the market reality for gain. Therefore a situation whereby government, for example, positions a particular firm to compete favorably must be accepted. However, such action may not be sustainable as markets will be distorted leading to inefficiencies and eventually uncompetitiveness.

Furthermore, a business that operates in a country where education, science and infrastructure is not upgraded continuously or social and political stability is lacking, will not be able to compete in the long-term, despite having a mere perfect business strategy or making sufficient short-term profits. Competitiveness should thus not be defined in economic terms; however, the notion of sustainability clearly requires that competitiveness be contextualised by an economic framework to ensure a sustainable process.

From these notions competitiveness was defined as the ability of a sector, industry or firm to compete successfully in order to achieve sustainable growth within the global environment while earning at least the opportunity cost of returns on resources employed. To compete means to try to gain or win something by defeating other competitors.

From the definition, five aspects emerged as being important to focus the competitive measurement and analysis of the agribusiness sector in South Africa, namely:

* Competitiveness is a dynamic and involved process, instead of an absolute state of affairs.

* Competitiveness can only be assessed Within a relative sense.

* Competitiveness is a tool for agribusinesses to continuously exploit the local and/or global market reality, including uneven economic "playing fields," for gain relative to other competitors. Competitiveness can therefore only be measured by the gains from this trade.

* Competitiveness is a holistic viewpoint on the ability to sustain the gains achieved through trade and is dependant on key success factors and constraints that must be identified.

* In order to sustain competitiveness it is important to predict change correctly and act upon such predictions in an innovative manner m mobilize and attract scarce resources from other economic endeavours.

Step 2: Measuring the competitiveness status: The second step is to measure whether the South African agribusiness sector can compete internationally. To determine which of the South Africa commodity and product chains can compete in the global market, the Revealed Comparative Advantage model as developed by Balassa (1977, 1989) and extended by Volrath (1991) to the Relative Trade Advantage (RTA) method, was used. This method supports the definition developed on competitiveness. To measure how competitive the agribusiness sector in South Africa is, it is necessary to determine how successfully the sector sold its products over time in the local and global market. The RTA-method allows for the measurement of competitiveness under real world conditions such as uneven economic "playing fields," distorted economies and different trade regimes and are therefore the most suitable method for measuring competitiveness status.

Step 3: Analyzing the competitiveness status: The challenge is to determine how the competitive performance of the agribusiness sector in South Africa is achieved. The aim is to determine the key success factors that established a competitive advantage and the constraints that impacted negatively on the competitiveness of agribusinesses. The determinants of competitiveness, as described by Porter (1990, 1998), are used as basis. The focus of this institutional analysis is at the firm level i.e. individual firms are requested to participate in the data gathering process through questionnaires. Thus executive opinions are gathered through an Agribusiness Executive Survey (AES).

Whereas the hard data in step 2 of the framework was used to measure competitiveness status over a specific period, the survey data measured competitiveness as it is perceived. The survey responses reflected different perceptions on factors influencing competitiveness by business executives who are dealing with global business situations. Their responses are more recent and closer to reality since there is no time lag, which is often a problem with hard data. The Executive Survey offered a unique measure and captured the informed judgments of business leaders and decision-makers in the agribusiness sector of South Africa on issues that influence their sector's competitiveness.

Step 4: Analyzing the agribusiness decision-making environment: One important characteristic of today's modern world is that almost daily changes occur on many terrains. These changes have a direct effect on the business confidence of managers by influencing their next business decision-- short, medium and long term. These business decisions will have a direct effect on the future competitiveness performance of agribusinesses. Business confidence is thus an important measure of the status of the decision-making environment in which businesses operate.

The fourth step of the framework is to develop an Agribusiness Confidence Index (ACI) to determine the confidence of the agribusiness sector in South Africa. The challenge is to develop a measurement of changes in the business confidence of agribusinesses in reaction to the changing environment, in order to make a contribution to competitive analysis and to assist with decision-making in a dynamic world. The goal of the ACI is to determine the business confidence of agribusinesses as accurately as possible. Micro and macro indicators are included in the index.

Step 5: Developing strategies to enhance the competitiveness of the agribusiness sector in South Africa: The previous three steps of the framework combined quantitative and hard data with qualitative analysis and opinion survey data. These steps in the analyses provided a different but complementary viewpoint on the issue of competitiveness, and contributed to the establishment of an enhanced understanding and comprehensive statement on the competitiveness of the agribusiness sector in South Africa. Using this intelligence, strategies can be developed to enhance the competitiveness of the agribusiness sector in South Africa.

This 5 step-framework is coherent with the notions on competitiveness used in this paper and analyzed the ability of the agribusiness sector in South Africa to compete successfully, on a continuous basis, in the global economy.

DETERMINING AND ANALYZING THE COMPETITIVENESS STATUS OF THE SOUTH AFRICAN AGRIBUSINESS SECTOR

The following statements answer the question "How competitive is the South African agribusiness sector globally?"

Marginal competitiveness status: The South African agribusiness sector is generally marginal as far as international competitiveness is rated. Table 1 summarizes the competitiveness status of the agribusiness sector in South Africa. From the table it is clear that RTA values are situated round- about zero (RTA 2003 value = 0.55; RTA 2002 value = 0.46; RTA 2001 value = 0.48), resulting in the competitiveness status being classified as marginal. There are, however, positive Izends in competitiveness from 1994 to 2003. This finding implies that small adjustments are necessary to turn poor positions around, but specific problem links-processing, storage or production, for instance--need to be identified.

Variation in competitiveness between value chains: This generalization of marginally competitiveness status, however, disguises the varying rates of competitiveness between the different value chains of the agribusiness sector. Table 2 summarizes the competitiveness of the primary products and Table 3 summarizes the competitiveness of the value added products in the sector. From Table 2 and Table 3 it is clear that South Africa is competitive in the production, marketing and selling of maize, groundnuts, most fruits, wool, mohair, wine, fruit juices, flour of maize and flour of wheat. South Africa is not competitive in the cotton, soybeans, dry beans and mutton and lamb value chains.

[FIGURE 1 OMITTED]

The notion of decreasing competitiveness in the supply chains: Inter-chain competitiveness for selected products is shown in Table 4. From the table it is clear that the maize, apple, pineapple, grapefruit and mohair chains' primary products are competitive and there is an increasing trend in competitiveness of value-adding in the chain. The wheat, tobacco, pork meat and chicken meat chains are marginally competitive. These chains, however, also show an increase in competitiveness when moving from the primary to the value added products in the chain. However, most chains (sugar, groundnuts, oranges, grapes, wool, plums, eggs, hides and skins, potatoes, sunflower, tomatoes, milk, soybeans) have a decreasing trend in competitiveness in the value adding activities in the chain.

This implies that beneficiation, or "value adding," opportunities in South African agribusinesses are restricted. Primary products in the agribusiness sector, on the other hand, are relatively or marginally competitive. One possible explanation for this could be the high rates of returns recorded for farm level applications of technology for most primary commodities.

Positive trends over time in competitiveness: The trends in the competitiveness of the agribusiness sector in South Africa from 1961 to 2003 can be divided into five phases (see Figure 2). The first phase is during the 1960's and early 1970's. South Africa's agribusiness sector was relatively competitive, with an RTA value above one. This was mainly as a result of relatively low interest rates and low inflation. Subsidies and high protection from government also contributed to making the sector more competitive during this period.

The second phase is from the mid-seventies to the mid-eighties. Sanctions were introduced in this period that resulted in a huge drop in competitiveness. Interest rates were also relatively high and the marketing of agricultural products were regulated by marketing boards. Note also the negative impact of the drought years of 1973/74, 1983/84 and 1984/85 on the competitiveness of the agribusiness sector in South Africa.

The third phase is from the mid 1980's to the early 1990's. This increase in the competitiveness of the agribusiness sector in South Africa can be attributed to the first phase of deregulation that was introduced. The fourth phase is the sharp decline in competitiveness in the early 1990's that was mainly because of the drought and the political uncertainty before the first democratic election in South Africa.

The fifth and current phase is the definite positive trend in the competitiveness of the agribusiness sector in South Africa from 1992 onwards. The competitiveness index for the South African agribusiness sector increased from--0.16 in 1992 to 0.55 in 2003. This increase can be largely attributed to the improved business know-how of South African agribusinesses; the second phase of deregulation of the agricultural sector, which resulted in a change in business form from co-operations to companies; the elimination of non- competitive business; the delivery of quality products and an increase in labor productivity in the agribusiness sector (Kirsten & Vink, 1999).

The period from 1992 also indicates the start of the sharp and continuous decrease in the value of the Rand against the US$. Although the devaluation of the Rand plays an important role in making the prices of South African products more competitive, this is not the only reason for the improvement in competitiveness (Esterhuizen & Van Rooyen, 2001). Agribusinesses in South Africa clearly began to focus on right competitive factors. This included the production of differentiated products to serve consumer preferences more effectively in "niche" markets, effective production systems, etc.

[FIGURE 2 OMITTED]

THE DETERMINANTS OF COMPETITIVENESS OF THE SOUTH AFRICAN AGRIBUSINESS SECTOR

In analyzing the determinants of competitiveness of the South African agribusiness sector the third competitive question "What are the key success factors and the major constraints impacting on the competitiveness of the South African agribusiness sector?" is answered. Primary data was obtained through the AES which was done in 2000, 2002 and 2004 (Esterhuizen, 2006).

Major constraints: The cost of crime, inflexible labor policy in South Africa and the competence of the personnel in the public sector are some of the major factors constraining the competitiveness of the agribusiness sector in South Africa. The factors constraining the competitive success of the agribusiness sector in South Africa for the different determinants of competitiveness, as described by Porter, are as follows: Factor conditions: The quality of unskilled labor and availability of skilled labor. Demand conditions: Local market size and market growth. Firm strategy, structure and rivalry: The difficulty to start a new business. Government: Administrative regulations, land reform policy, the tax system in South Africa, BEE policy, the labor policy in South Africa, the competence of the personnel in the public sector and the trust in the political systems. Chance: Aids, crime, the strong Rand and developments in Zimbabwe.

Key success factors: The production of affordable high quality products, intense competition in the local market and continuous innovation are some of the most important key success factors enhancing the competitiveness of the agribusiness sector in South Africa. The factors enhancing the competitive success of the agribusiness sector for the different determinants of competitiveness, as described by Porter, are as follows: Factor conditions: The quality of infrastructure, the availability of unskilled labor, the availability of capital and the quality and availability of technology. Demand conditions: Local buyers that are knowledgeable and demanding and buy innovative products and local buyers that are concerned over ethics and production methods. Related and supporting industries: Internet service providers, electricity supply, specialized information technology services, and the availability, quality and sustainability of local suppliers of primary inputs. Structure of sector: Regulatory standards in the sector, the flow of information from the customer to the company, information flow from the primary suppliers. Rivalry: Intense competition in the local market, entry of new competitors, the source of competition. Firm strategy: Unique products, services and processes, affordable high quality products, the production of environmentally friendly products, strategies to employ quality technology, investment in human resources and continuous innovation. Government: The macro economic policy and environmental regulations in South Africa. Chance: Biotechnology.

From the analyses it is also apparent that the South African agribusiness sector demonstrates a positive trend in the determinants of competitiveness. Figure 3 and Figure 4 illustrates this positive trend. In Figure 3 the six main determinants (Porter--diamond) of competitiveness are illustrated. In Figure 4 selected factors influencing the competitiveness of the agribusiness sector in South Africa are illustrated. From both figures it is clear that the 2004--line is on the outside of the graph for most determinants, indicating a positive trend in these determinants' ability to enhance the competitiveness of the agribusiness sector in South Africa.

Factor and demand conditions indicate positive trends in terms of its impact on the competitiveness of the agribusiness sector in South Africa, but it still needs improvement. Firm strategies, industry structure and the local rivalry, combined with the supporting industries, with a score of 2-3 in all three years, are the key factors that provide the agribusiness sector in South Africa with a global competitive edge.

The government indicates a decreasing trend in its ability to influence the competitiveness of the agribusiness sector in South Africa in a positive manner. A score of between 1 and 2 in 2004, government, through its policies and attitudes, is constraining the competitiveness of the agribusiness sector in South Africa. Chance factors also influence the South African agribusiness sector's competitiveness in a negative manner, which indicates the vulnerability of businesses in South Africa against local and global shocks. It also indicates that agribusinesses in Sooth Africa are not flexible enough to exploit business opportunities that originate from a changing environment.

[FIGURE 3 OMITTED]

Specific factors that show a positive trend in their ability to enhance the competitiveness of the sector are: factor conditions--labor, infrastructure, capital and technology; demand conditions-- market size and market growth; local suppliers of primary inputs; South Africa's trade policy and a decreasing trend in the cost of doing business in South Africa.

Factors that indicate negative trends in their impact on the competitiveness of the agribusiness sector in South Africa are: financial institutions, scientific research institutions and electricity supplies.

[FIGURE 4 OMITTED]

ANALYZING THE DECISION-MAKING ENVIRONMENT OF THE AGRIBUSINESS SECTOR IN SOUTH AFRICA

Change in virtually every stratum of society is a feature of our time. These changes have a direct effect on the business confidence of managers and it influences their next business decisions. In order to measure these changes, economists have developed indicators, generally known as indexes (Steyn, Smit, Du Toit & Strasheim, 1996). Until now, there has not existed an index to measure the business confidence in the agribusiness sector in South Africa. The measurement of business confidence is important, as it reliably indicates the current and expected state of the economy. The ACI is determined on a quarterly basis to answer the question "How favorable is the decisionmaking environment in which South African agribusinesses operate?"

Ten factors were identified that will give a true reflection of the business confidence of the agribusiness sector in South Africa. These are: the expected turnover of the business; the expected net operating income of the business; the employment trends in the business; the trends in capital investment by the business; expected economic growth in South Africa; the amount of export by the business; the general agricultural conditions in South Africa; the trends in market share by the business; the increase or decrease in debtor provision for bad debt by the business, and the increase or decrease in financing costs. The importance of these factors was also determined through a survey. Weights were allocated to each factor according to the survey results (Esterhuizen, 2006).

Trends in the business confidence of agribusinesses in South Africa from 2001 to 2004 can be divided into three phases (see Figure 5). From the 1st quarter of 2001 to the 4th quarter of 2002 there was a definite positive trend in the confidence of agribusiness. The devaluation of the Rand against the major currencies that resulted in a sharp increase in the prices of commodities played a major role in this positive trend.

The second phase in the business confidence of agribusinesses in South Africa is the sharp decline since the 4th quarter of 2002. This decline in business confidence was largely driven by the persistent drought that affected large parts of the country. The increase in the value of the Rand also had an impact.

From the 4th quarter of 2003, agribusiness confidence began to indicate a slight turnaround--the start of the third phase in the agribusinesses confidence index. This positive increase in agribusiness confidence can largely be attributed to an improvement in the general agricultural conditions, as well as a sharp increase in agribusinesses' expectations for positive economic growth in South Africa. The lower interest rates also impacted positively on the confidence of agribusinesses in South Africa.

This trend in the business confidence of agribusinesses in South Africa goes hand in hand with some other trends in the agribusiness sector regarding competitiveness, investments, exports, and economic growth (Esterhuizen, Van Rooyen & Doyer, 2002; Esterhuizen & Van Rooyen, 2001).

Given the direct impact of confidence on the competitive performance of businesses (Vealey, 2001)--the decrease in the confidence of the agribusiness sector in 2003 and 2004 will have a negative impact on the competitiveness status of the agribusiness sector in South Africa. One can expect that the competitiveness index will decrease from 2003 onwards.

[FIGURE 5 OMITTED]

STRATEGIES TO ENHANCE THE COMPETITIVENESS OF THE AGRIBUSINESS SECTOR IN SOUTH AFRICA

The competitiveness of the agribusiness sector in South Africa will enhance when the business environment of agribusinesses in South Africa become dynamic, stimulating, and intensely competitive. On the other hand, agribusinesses will experience a negative trend in competitiveness if the local business environment excludes agribusinesses from innovation and productivity.

Using the analyses of the previous steps in the framework the last competitiveness question was answered "What strategies are needed to enhance the competitiveness of the South African agribusiness sector?" A range of strategies at business, government, and sector levels were derived to increase the ability of the agribusiness sector in South Africa to continuously compete in a global environment.

Role of government: From the analysis in this study it is clear that government does have a central role in promoting competitiveness performance in the agribusiness sector through a particular set of rules, policies, and initiatives. Specific policy approaches for the South African government to enhance the competitiveness of the agribusiness sector, include the following:

* Focus on specialized education and knowledge development.

* Avoid intervening bluntly in factor and currency markets.

* Enforce strict product safety and environmental standards.

* Promote sustained investment.

* Fight crime.

* Promote competition, avoid monopolies.

* Support fair trade in an unfair environment.

Role of agribusinesses: Ultimately, only the companies themselves can achieve and sustain competitive advantage. In particular, they must recognize the central role of innovation--and the uncomfortable truth that innovation grows out of pressure and challenge. From the analyses in the previous steps in the framework, a number of key focus areas emerge for success at firm level. These include the following:

* Create internal pressures for innovation.

* Increase productivity.

* Increased flexibility.

* Embrace domestic rivalry.

* Participate in supply Chain Management.

* Drive for quality.

* Lower the cost of production.

* Know and understand the size of the world economy and its markets.

* Design for social responsibility and successful Black Economic Empowerment.

* Managing for competitive advantage.

Responsibility at sector level: The complexity of creating a competitive and equitable South African agribusiness sector is far reaching. Collective action will be required to initiate, focus, align, coordinate, monitor, and evaluate initiatives. Value adding through collective action should guide the choice of sector level initiatives. The following activities were considered:

* Develop a strategic partnership between government and the agribusiness sector.

* Generic action to improve the national diamond.

* Towards an "Agribusiness Development Policy" for South Africa.

CONCLUSION

Compete or perish! That is the harsh reality of today's world. We're living in the midst of a global explosion of competition. In every profession, in every area of life, the competition is getting stiffer and fiercer. The number of competitors has increased faster than the number of jobs, resources, andd opportunities. The pressure is on. To become a winner today is an ever more demanding task--it demands more talent, more guts, more preparation and more "savvy."

A 5-step framework has been developed for measuring and analysing competitiveness in the agribusiness sector of South Africa. Three instruments emerged from this viz the AGRIBUSINESS COMPETITIVENESS STATUS index (ACS) based on the Relative Trade Advantage (RTA) method; the AGRIBUSINESS EXECUTIVE SURVEY (AES) based on the determinants of competitiveness, as described by Porter; and the AGRIBUSINESS CONFIDENCE INDEX (ACI) measuring the status of the decision-making environment in which agribusinesses are positioned to perform

From the measurement it is evident that the South African agribusiness sector is marginally competitive but ever increasing. A definite positive trend is present in the competitiveness of the sector from 1992 onwards. There are, however, varying rates of competitiveness between the different value chains in the sector; some are highly competitive i.e. wine, some are marginally competitive i.e. sunflower and some are not competitive i.e. cotton. A general notion of decreasing competitiveness exists in the value chains-- implying that value adding opportunities in the sector are restricted.

The AES is used to determine the views and opinions of executives in the agribusiness environment on factors constraining and enhancing competitiveness. The high cost of crime, inflexible labor policy and the competence of the personnel in the public sector are some of the factors constraining the competitiveness of the sector. The production of affordable, high quality products, intense competition in the local market, and continuous innovation are some of the important key success factors enhancing the competitiveness of the sector. The sector also demonstrates a positive trend in the determinants of competitiveness.

A clear relationship exists between changes in the decision-making environment and the competitiveness performance of the sector. This relationship influences the sustainability of the competitiveness status of the sector. The ACI analysis indicated that trends in the business confidence of the sector are influenced by a complex set of activities and expectations which includes climatic conditions, changes in the exchange and interest rates, economic growth and changes in turnover and net operating income.

The framework developed in this study combines quantitative and qualitative analyses to develop strategies to enhance the competitiveness of the sector. The analytical and empirical content and the resulting findings therefore enable this study to act as a basis for strategic planning, policy development and strategic positioning by the agribusiness sector in South Africa and will allow for future monitory and analysis of competitive performance.

REFERENCES

Balassa, B. (1989). Comparative advantage, trade policy and economic development. London: Harvester/Wheat sheaf.

Esterhuizen, D. (2006). An inquiry into the competitiveness of the South African agribusiness sector. PhD thesis, University of Pretoria, Pretoria.

Esterhuizen, D, Van Rooyen, C.J & Doyer, O.T. (2002). Investment in South African agro-food and fibre complex: perceptions, evidence and analysis. Agrekon, 41(1).

Esterhuizen, D & Van Rooyen, C.J. (2001). "Winners", "losers" and "turnarounds" in the South African agro-food and fibre industry. Agrekon, 40 (4): 584-592.

Ismea, (1999). The European agro-food system and the challenge of global competition. Rome.

Kirsten, J. & Vink, N. (1999). Agricultural policy in South Africa in the 1990's. Retrieved March 10, 2000, from http//www.np.ac.za/academic/ecoagric.

Porter, M.E. (1990, 1998). The competitive advantage of nations. London: Macmillan.

Steyn, A.G.W., Stair, C.F., Du Toit, S.H.C. & Strasheim, C. (1996). Modern statistics in practice. J.L van Schaik (Eds.). Pretoria: BPK.

Van Rooyen, C.J., Esterhuizen; D. & Doyer, O.T. (2000). How competitive is agribusiness in the South African food commodity chain. In J H Trienekens and P.J.P. Zuurbier (eds.). Chain management in agribusiness and the food industry. The Netherlands: Waginingen Pets, Waginingen.

Vealey, R.S. (2001). Understanding and enhancing self-confidence in athletes. In: Singer, R., Hausenblas, H. & Janelle, C. (Eds.), Handbook of sport psychology. New York: Wiley.

Volrath, T.L. (1991). A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage. Weltwirtschaftliches Archiv 127 (2): 265-280.

Dirk Esterhuizen, Agricultural Business Chamber and University of Pretoria

Johan van Rooyen, University of Pretoria

Luc D' Haese, University of Antwerpen and University of Gent
TABLE 1
THE COMPETITIVENESS STATUS OF THE SOUTH AFRICAN AGRIBUSINESS
SECTOR

 RTA RTA RTA Trends
 2003 2002 2001 1961-73

The South
African 0.55 0.46 0.48 +
agribusiness
sector

 Trends Trends Trends Trends
 1974-84 1985-90 1991-93 1994-03

The South
African - + - +
agribusiness
sector

Source: Own calculation based on data from FAOSTAT 2003. Notes: '+'
Positive trend; '-' negative trend; '=' constant trend

TABLE 2
THE COMPETITIVENESS OF PRIMARY PRODUCTS IN THE AGRIBUSINESS
SECTOR OF SOUTH AFRICA

Competitive (+) Marginal Not Competitive (-)

Maize; Sugar; Wheat; Potatoes; Cotton seed;
Groundnuts; Oranges; Soybeans; Sunflower Barley; Dry beans;
Apples; Grapes; seed; Sorghum; Tobacco; Mutton and lamb
Pineapples; Tomatoes; Asparagus;
Grapefruit and Green beans;
pomelos; Lemons and Cabbages; Carrots;
lime; Mangoes; Chillies and peppers;
Avocados; Pears; Coffee; Garlic;
Apricots; Peaches and Honey; Hops; Kiwi
nectarines; Plums; fruit; Lettuce; Milk;
Sweet potatoes; Eggs; Pig meat; Onions;
Wool; Mohair; Hides Olives; Papayas;
and skins Mushrooms; Peas;
 Bananas; Beef;
 Strawberries;
 Watermelons; Tea;
 Chicken

Source: Own calculations based on RTA indexes

TABLE 3
THE COMPETITIVENESS OF VALUE ADDED PRODUCTS IN THE AGRIBUSINESS
SECTOR OF SOUTH AFRICA

Competitive (+) Marginal Not Competitive (-)

Wheat flour; Flour of Macaroni; Pastry; Bran of wheat; Soya
Maize; Bran of maize; Bread; Breakfast bean oil; Soya bean
Oil of maize; Sugar cereals; Potatoes cake; Sunflower cake;
refined; Groundnuts frozen; Flour of Oil of cotton seed;
shelled; Groundnut potatoes; Sugar Cake of cotton seed;
oil; Sunflower oil; confectionery; Maple Cotton lint; Malt of
Cigarettes; Essential sugar and syrups; barley; Peas dry;
oils; Orange juice; Soya sauce; Cake of
Apple juice; Dry groundnuts; Prepared
apricots; Grape groundnuts;
juice; Wine; Margarine; Cotton
Pineapple canned; carded combed, Cotton
Pineapple juice; linter; Beer of
Grapefruit juice; Dry barley; Cigars
onions; Eggs liquid; cheroots; Tomato
Wool scoured; Hair juice; Tomato paste;
coarse; Peeled tomatoes;
 Coffee extracts;
 Coffee roasted;
 Canned mushrooms;
 Dried mushrooms; Oil
 of olives; Plum
 dried; Eggs liquid,
 dried; Eggs dry whole
 yolks; Canned
 chickens; Beef
 prepared; Dry cow
 milk; Butter; Cheese;
 Fresh cream; Ice
 cream; Yoghurt;
 Leather; Hides dry
 slated; Hides wet
 salted; Pork meat
 prepared;

Source: Own calculations based on RTA indexes

TABLE 4
INTER-CHAIN COMPETITIVENESS

 COMPETITIVENESS OF PRIMARY PRODUCT

COMPETITIVENESS
OF VALUE-ADDING + MARGINAL -
IN CHAIN

Increasing Maize, Apples, Wheat, Tobacco, Cotton,
 Pineapple, Chicken meat, Pork Barley
TRENDS Grapefruit, Mohair

Decreasing Sugar, Groundnuts, Potatoes,
 Oranges, Grapes, Sunflower,
TRENDS Wool, Plums, Hen Tomatoes, Milk,
 eggs, Hides and Soya beans,
 skins Mushrooms, Olives,
 Peas Reef

Source: Own calculations based on RTA indexes
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Author:Esterhuizen, Dirk; van Rooyen, Johan; D'Haese, Luc
Publication:Advances in Competitiveness Research
Date:Jan 1, 2008
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