SouthAfrica has undergone profound policy changes since the end of Apartheid. While the major policy changes withrespect to agriculture were dominated by an expensive land reform policy, thegovernment has also implemented major changes in the agricultural economy. Thecountry opted for import tariff as a means to control imports and enters intopreferential trade agreements with neighboring countries under the SouthernAfrica Custom Union and outside the region. Under its WTO commitments, alltariffs schedules are below bound rates and the average unweighted tariff wasreduced to 9.1%.
Corn and Sorghum
á South Africa does notprovide a minimum guaranteed price for corn as the corn market isderegulated.
á Import duty atR84.24/MT ($0.38/bu) on January 2005 is free as of Dec 8, 2006.
á South Africa has bannedcorn imports under its SPS regulation for imports of genetically modified corn.
á The applied tariff ratefor sorghum is 3%.
á South Africa does notproduce rice and does not apply any duty with respect to rice imports.
á Soybean production isincreasing in South Africa. Thisis due to less production risk compared to corn, an increasing demand ofsoybean meal for animal feed, an increasing demand for soybean oil as tableoil, and the emergence of biodesiel production.
á Current imports aresubject to an 8% import tariff.
á Prices are determinedby a pooling mechanism under the control of the South Africa Sugar Association.The Association operates as a state trading enterprise and has sole controlover exports.
á The country applies aflexible (variable) import tariff system based on a formula that yieldsdifferent rates depending on domestic market conditions. For instance, if a high world priceinduces a rise in exports of South African sugar, the formula kicks in and thetariff rate falls to encourage imports to satisfy the needs of the domesticmarket.
á The sugar tariff was55c/kg ($0.25/lb) then fell to 23.3c/kg ($0.11/lb) then to zero because ofhigher world price.
á Import tariff mayremain at this level because of the ethanol effect on sugar price.
á As of July 2005, theSouth African government applies a 2% tariff on imports.