Promoting competitiveness in South African agriculture and agribusiness: The role of institutions

This paper considers private and public institutions that will help promote the competitiveness of commercial farms and agribusiness firms, and enhance the productivity of communal farmers and the competitiveness of emerging farmers in South Africa. Commercial agriculture and agribusiness are creating institutions (such as food safety standards and strategic partnerships), adopting existing private and public institutions (e.g. TQM, ISO 9000 and HACCP) or restructuring to add value to products and services, reduce costs and gain access to export markets. Government should focus its relatively scarce resources on providing physical and legal infrastructure (such as secure property rights and contract enforcement) to reduce transaction costs, including risk, so that markets work efficiently. A major challenge for local agricultural economists is to provide information about institutions that will promote the productive use of land in communal areas, and the competitiveness of emerging farmers on redistributed commercial farmland.