‘Trade competitiveness must be beefed up’

South Africa’s negative trade balance could be improved if better systems were in place to aid exports.

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Speaking at the department of agriculture and Agbiz trade competitiveness conference, Ernst Janovsky, head of Absa AgriBusiness, said that SA must improve its trade efficiencies by looking at new trade agreements. “We need to negotiate new phytosanitary measures and start using trade dispute resolutions.”

Dr John Purchase, CEO of Agbiz, added that biosecurity measures were not addressed adequately and SA’s problems with foot-and-mouth disease had a negative impact on its meat export potential. He noted that SA was a nett exporter of primary agricultural products, but had a negative trade balance due to nett imports of processed products. Agriculture had been identified as an industry that could help the country move to a positive trade balance.

Lindie Stroebel, Agbiz economic intelligence manager, said government was responsible for half of the 15 most constraining factors inhibiting SA’s competitiveness. “Competence of public sector personnel is a major issue, as are transport costs and burdensome administrative regulations.” Most of the factors enhancing agribusiness, were formulated by industry itself. This included investment in human resources, and building relationships and networks within the industry, she said.

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Stroebel noted that agribusinesses struggled to adhere to BEE regulations, and added that although SA had improved in its overall competitiveness this year, it was not sustainable. She pointed to the fact that the country ranked 132 on health and primary education and 113 on labour market efficiency, out of a total of 144 countries. Agbiz’s 2012 results on the agribusiness confidence index also showed that efficiency was reducing within the sector.

Stroebel said the availability of skilled labour would decrease, while at the same time the need for unskilled labour was decreasing due to mechanisation. Janovsky said the Competition Commission also contributed to making the sector less efficient, as critical information could no longer be declared.

He said that agriculture in Africa would grow faster than consumption, making exports crucial to the continent’s success, and it was vital to develop “deep-sea trade”. He added that the industry had to look at greater efficiency to be sustainable. “Prices are not so much the issue as efficiency,” he said.

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