The current system has no domestic market support interventions or export subsidies. Border measures, applied on Southern African Customs Union (SACU)1 common borders, are the only price support policy for all commodities except sugar.
Import protection for agricultural and food products is based on specific and ad valorem tariffs. The average applied Most Favoured Nation (MFN) tariff for agricultural products is around 9%, well below the average bound tariff on agricultural products of 39%. Tariff rate quotas (TRQ) exist for a range of agricultural products under the WTO minimum market access commitments. The zero import-tariff for maize applies since 2007.
The Sugar Agreement of 2000 (between agents in the sugar production chain) permits exports of raw sugar only through a single-channel industry arrangement and allocates quotas to individual producers for sugar sold on the domestic market.
Other policy instruments include input subsidies, mainly in the form of a diesel tax rebate; programmes supporting new farmers benefiting from land reforms; and general services provided to the sector, mainly research, extension and inspection services. The National Land Care Programme (NLP) is a community-based and government-supported approach promoting sustainable management and use of natural agricultural resources.
During the reforms concerning land restitution and land redistribution (launched in 1994) a range of programmes (Comprehensive Agricultural Support Programme, Illima/Letsema projects and Micro-agricultural Financial Institutions of South Africa [MAFISA]) were implemented to create an enabling environment for previously disadvantaged farmers (subsistence, smallholders and commercial), such as input subsidies, capacity building, provision of information services and infrastructures.
Reviews of the Land Redistribution for Agricultural Development (LRAD) projects, carried out in 2004-07, indicated that a number of projects were not economically viable. The Department for Rural Development and Land Reform (DRDLR) amended the Land Reform regulation in 2009 to rationalise the land redistribution process and assist vulnerable projects. The Agricultural Land Holding Account (created in 2009) is responsible for land acquisition, and recapitalisation and development of distressed land reform projects through the Recapitalisation and Development Programme. Beneficiaries may dispose of the land after an agreed lease period, provided the project is economically viable.
The Integrated Food Security Strategy (IFSS), introduced in 2002 based on public and private civil society partnerships, focuses on household food security as the building block for national food security. One of the strategic approaches increases household food supplies by providing production support services to households’ own food production. The food security objective is further supported by Fetsa Tlala, an integrated food production initiative, introduced in 2013, which aims to produce staple foods on fallow land with agricultural potential in communal areas.
The Ilima/Letsema Programme implemented in 2008 aims to increase food production, particularly by smallholder farming. Through provincial departments, it finances mostly conditional grants for projects such as upgrading irrigation schemes and other infrastructure and on-farm investments to strengthen production capacity.
The Comprehensive Agricultural Support Programme (CASP) focuses on: on- and off-farm infrastructure and production inputs; targeted training, skill development and capacity building; marketing and business development and support; information and knowledge management; technical and advisory services; regulatory services; and financial services.
The Comprehensive Rural Development Programme (CRDP) launched in 2009 supports the development of rural areas through two main programmes, both related to the agricultural sector. The Rural Infrastructure Development (RID) programme promotes investment in rural infrastructure. Expenditure increased significantly due to increased funding for projects providing access to basic services, particularly sanitation, irrigation and roads. The Rural Enterprise and Industrial Development (REID) programme assists in co-ordination and facilitation of rural enterprise development, industrial development, and support to rural communities to produce their own food.
South Africa is a founding member of the Southern African Customs Union (SACU), a full customs union with a common external tariff. In 1994, South Africa became a member of the Southern African Development Community (SADC).2 From 2012, the SADC free trade agreement (FTA) was fully implemented.
South Africa is also a beneficiary of the US African Growth and Opportunity Act (AGOA), a non-reciprocal trade preference programme that grants eligible Sub-Saharan Africa countries duty-free, quota-free (DFQF) access to the United States for selected export products. AGOA was enacted in 2000 for eight years. The Act was extended to 2015, and further to 2025. AGOA has a positive impact on some of South Africa’s agricultural sub-sectors, in particular exports of wine, macadamia nuts and oranges.
A signatory to the 2016 Paris Agreement on Climate Change, the South African Government committed to reducing greenhouse gas (GHG) emissions by 34% by 2020 and 42% by 2025 relative to 1990 levels (National Climate Change Response Policy 2011), through the approval of a carbon tax on 16 August 2017. This is integral for implementing government policy on climate change. It should enable South Africa to meet its Nationally Determined Contributions commitments, and reduce the country’s GHG emissions in line with its National Climate Change Response Policy and National Development Plan. South Africa implements the carbon tax through a phase-in approach. The current Phase 1 is set for 2019 to 2022 and exempts primary agriculture from the carbon tax. However, this exclusion may be reconsidered for Phase 2 (from 2023).