Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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5.5 South Africa
The purpose of this country case study is to firstly introduce South Africa’s general agricultural
market system (5.5.1), after which a selection of institutions will be evaluated into more
details (5.5.2 and 5.5.3). As opposed to the country case studies for Tunisia, Uganda, and
Indonesia, no need assessment has been constructed for South Africa as it concerns a best
practice non-OIC Member Country. Therefore, conclusions and lessons learnt may be
generalized and serve as inspiration to OIC Member Countries (5.5.5).
5.5.1 Overview of Agricultural & Food Sectors and Markets
The following section briefly describes the current situation of the five stages of South Africa’s
agricultural market system as explained in the Conceptual Framework. The selected
agricultural market institutions (Section 5.5.2) typically intervene in one or more of these
stages. The five stages include:
 Production;
 Handling and storage;
 Processing and packaging;
 Distribution and market; and
 Consumption and trade.
Production
Despite its relative shortage of arable land, South Africa is one of the largest producers of
agricultural goods in Africa, and its largest exporter. The 1.2 million small subsistence-based
farmers accounts for about 14% of the agricultural land, while 40,000 well-developed
commercial farms occupy about 86% of South Africa’s agricultural land.473
Cereal production is highly variable, as much production is rain-fed, but the 2016-17 growing
season is expected to produce record yields of both maize and wheat. Exports of maize, the
main staple and feed grain, are expected to reach about 1.0 million metric tonnes during 2016-
17, based on higher yields and production volume. This contrasts with imports of 3.5 million
metric tonnes in 2015-16, as drought reduced production by some 40%. South Africa’s wheat
imports for 2016/17 are expected to be 5% lower than the previous year, due to an expected
increase in local production, while rice imports are expected to increase by 10% because of
increased demand. Wheat and rice imports could reach about 2.0 million tonnes and 1.0
million tonnes, respectively, as a function of increased demand.474
South Africa is a major producer and exporter of fruit and vegetables, dairy, and meat. It is
virtually the only African producer of citrus and tree fruits. South Africa is also the 7th-largest
wine producer in the world, with 2016 production of 420 million litres (representing 20%
growth over the past four years) and exports of . The wine industry contributes 2% of GDP, or
473 WTO (2015), Trade Policy Review: Southern Africa Customs Union, Geneva: World Trade Organization.
474 Esterhuizen, D. (2017), “South Africa, Republic of: Grain and Feed Annual,” USDA Foreign Agricultural Service, Global
Agricultural Information Network Report, March 24,
Accessed June 2017].