Competitiveness of South Africa's agri-food commodities

Yonas T. Bahta; Yonas T. Bahta

doi:10.3934/agrfood.2021057

AIMS Agriculture and Food

2021, Volume 6, Issue 4: 945-968. doi: 10.3934/agrfood.2021057

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Research article

Competitiveness of South Africa's agri-food commodities

Yonas T. Bahta ^,

Department of Agricultural Economics, University of the Free State, 205 Nelson Mandela drive, Agricultural Building, P.o.box.339, Internal box 58, Bloemfontein, 9300, South Africa

Received: 15 July 2021 Accepted: 26 October 2021 Published: 12 November 2021

This research aims to determine the competitiveness of South African agri-food products and the factors that influence them. The study applied a comparative advantage (RCA) index, Lafay Index (LFI), Export Diversification Index (EDI), Major export category (MEC), Hirschman index (HI), and regression analysis. The study revealed a mixed result of RCA and LFI of agri-food commodities during 2000–2018. Some commodities such as tobacco and rawhides have a comparative advantage. On the other hand, vegetables, fruit, and coffee showed a comparative disadvantage. At the same time, the LFI revealed a significant comparative advantage from 2000 to 2003 for agri-food commodities of fish and sugar, sugar preparations, and honey. EDI was near zero for all commodities, indicating that the trading structure was less concentrated. Hirschman index (HI) demonstrated that all commodities showed a reduced concentration throughout the study period. The results of regression analysis on factors that influence the competitiveness of agri-food commodities were varied. Agriculture productivity and GDP per capita had a favorable impact on comparative advantage. Macroeconomic stability had a mixed result, with agri-food commodities having positive and negative effects. South Africa had a less concentrated trade structure and did not depend on international trade from the agri-food industry. These evaluations provide policymakers with information on agri-food competitiveness and the factors that influence the industry's competitiveness.
- agri-food industry,
- competitiveness,
- revealed comparative advantage,
- Lafay Index,
- land productivity,
- labour productivity
Citation: Yonas T. Bahta. Competitiveness of South Africa's agri-food commodities[J]. AIMS Agriculture and Food, 2021, 6(4): 945-968. doi: 10.3934/agrfood.2021057

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Abstract

This research aims to determine the competitiveness of South African agri-food products and the factors that influence them. The study applied a comparative advantage (RCA) index, Lafay Index (LFI), Export Diversification Index (EDI), Major export category (MEC), Hirschman index (HI), and regression analysis. The study revealed a mixed result of RCA and LFI of agri-food commodities during 2000–2018. Some commodities such as tobacco and rawhides have a comparative advantage. On the other hand, vegetables, fruit, and coffee showed a comparative disadvantage. At the same time, the LFI revealed a significant comparative advantage from 2000 to 2003 for agri-food commodities of fish and sugar, sugar preparations, and honey. EDI was near zero for all commodities, indicating that the trading structure was less concentrated. Hirschman index (HI) demonstrated that all commodities showed a reduced concentration throughout the study period. The results of regression analysis on factors that influence the competitiveness of agri-food commodities were varied. Agriculture productivity and GDP per capita had a favorable impact on comparative advantage. Macroeconomic stability had a mixed result, with agri-food commodities having positive and negative effects. South Africa had a less concentrated trade structure and did not depend on international trade from the agri-food industry. These evaluations provide policymakers with information on agri-food competitiveness and the factors that influence the industry's competitiveness.

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