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Trade Liberalisation, Efficiency and South Africa's Sugar Industry

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  • McDonald, Scott
  • Punt, Cecilia
  • Leaver, Rosemary

Abstract

This paper reports the results of a computable general equilibrium (CGE) analysis of the South African sugar industry. The study was inspired by analyses of the EU South Africa Free Trade Agreement that indicated the importance of sugar exports to the welfare gains from agricultural trade liberalisation and by the increasing pressure upon OECD countries to reform their sugar (trade) policies. In addition to the effects of trade liberalisation this study also considers the implications of increases in the efficiency with which sugarcane is converted to raw sugar, which is an important determinant of the competitiveness of sugar production and exports. The results indicate that there would be substantial welfare gains across all household groups and that overall agricultural producers in South Africa should benefit; however there are substantial variations in the impact upon agricultural producers in different provinces, with farmers in some provinces facing reductions in the profitability of farming.

Suggested Citation

  • McDonald, Scott & Punt, Cecilia & Leaver, Rosemary, 2004. "Trade Liberalisation, Efficiency and South Africa's Sugar Industry," Working Paper Series 15634, PROVIDE Project.
    • Handle: RePEc:ags:provwp:15634
    DOI: 10.22004/ag.econ.15634
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    References listed on IDEAS

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    1. John C. Beghin & Ataman Aksoy, 2003. "Agricultural Trade and the Doha Round: Lessons from Commodity Studies," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 03-bp42, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    3. Michael Matsebula, 2001. "Key Issues facing Sugar Industries in the Southern African Development Community," Working Papers 01050, University of Cape Town, Development Policy Research Unit.
    4. Pursell, Garry & Gupta, Anju, 1998. "Trade policies and incentives in Indian agriculture : methodology, background statistics, and protection and incentive indicators, 1965-95," Policy Research Working Paper Series 1953, The World Bank.
    5. Mitchell, Donald, 2004. "Sugar policies opportunity for change," Policy Research Working Paper Series 3222, The World Bank.
    6. Pyatt, Graham, 1988. "A SAM approach to modeling," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 327-352.
    7. Kilkenny, Maureen, 1991. "Computable General Equilibrium Modeling of Agricultural Policies: Documentation of the 30-Sector FPGE GAMS Model of the United States," Staff Reports 278539, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Jo Lorentzen & Anton Cartwright & Charles Meth, 2010. "Trade Liberalization, Rural Poverty and the Environment: A Case Study of Sugarcane Production in the Incomati River Basin in Mpumalanga, South Africa," Chapters, in: Jonathan A. Cook & Owen Cylke & Donald F. Larson & John D. Nash & Pamela Stedman-Edwards (ed.), Vulnerable Places, Vulnerable People, chapter 6, Edward Elgar Publishing.
    2. AfDB AfDB, 2008. "Working Paper 95 - Agricultural Trade Policy Reform in South Africa," Working Paper Series 2228, African Development Bank.
    3. AfDB AfDB, 2008. "Working Paper 95 - Agricultural Trade Policy Reform in South Africa," Working Paper Series 2308, African Development Bank.
    4. Margaret Chitiga & Tonia Kandiero & Phindile Ngwenya, 2008. "Working Paper 95 - Agricultural Trade Policy Reform in South Africa," Working Paper Series 230, African Development Bank.
    5. Chitiga, Margaret & Kandiero, Tonia & Ngwenya, P., 2008. "Agricultural trade policy reform in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(1), pages 1-26, March.

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    More about this item

    Keywords

    International Relations/Trade;

    JEL classification:

    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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