South Africa becomes a net importer of processed foods

"The South African agricultural sector has been witnessing a drop in employment related to the importation of processed foods. Lindie Stroebel, Economic Intelligence Managed [sic] at the Agricultural Business Chamber said that historically SA was a net exporter of primary agricultural products, but since 2006 it has become a net importer of processed products. The Agricultural Business Chamber, in its agribusiness confidence index, listed a lack of skills and professional workers as one of the main factors inhibiting the sector's competitiveness.

"Despite the prospects and projections regarding the opportunities for agricultural growth in Africa, the sector is beleaguered with numerous challenges that must be resolved. These include, but are not limited to: under-investment, imports, non-competitiveness, and human capacity constraints."

Implications:

Economists have spent generations and generations debating the positive and negative affects of open trade. While increased trade may lead to expanding markets and increased profits, it can harm smaller non-competitive markets. This is exactly what we are seeing evidence of in South Africa.

As mentioned in the newsletter, the potential for SA's agricultural growth is being undercut by bigger more competitive markets. This is not just a problem in SA, but a common issue within every developing country and needs to be addressed if we want to make any great strides towards helping poor and marginalized people gain opportunities within their own homes.