ECONOMIC DRIVERS OF SUGAR PRODUCTION AND EXPORT PERFORMANCE: THE CASE OF SOUTH AFRICA WITHIN THE TRIPARTITE FREE TRADE AREA
DOI:
https://doi.org/10.55908/sdgs.v12i4.3019Keywords:
competitiveness, trade restrictions, markets, Michael Porter`s Diamond Model, South AfricaAbstract
Background: The economic performance of any sector is measured by the level of its competitiveness against its competitors. The South African sugar industry, as a member of the Tripartite Free Trade Area (TFTA), faces stiff competition and is therefore challenged to improve its production and export performance to survive and dominate in the market in the long term.
Aim: This study aimed to assess the competitiveness of the South African sugarcane industry by looking at the economic drivers of sugar production and export.
Methods: The study employed Michael Porter`s Diamond Model to assess the competitiveness of the South African sugarcane industry, using primary data collected from a total of 123 sugarcane farmers and 100 key stakeholders. A 7-point Likert scale was applied to indicate the degree to which each of the determining factors is perceived to affect the performance and resulting competitiveness of the sugar industry.
Results: The findings revealed that the major constraints experienced by respondents are the availability of skilled labour; cost of doing business; level of infrastructure development; cost of infrastructure; water availability; climatic conditions; rainfall patterns; availability of financial services; access to credit; crime; and HIV/AIDS. In terms of exports, tariffs were found to be the major constraint along with some of the aforementioned factors. Several factors that are experienced as having a positive effect on competitive success also emerged. These include product design; packaging; labelling and pricing; manager’s willingness to export; level of education and training; length of time in the business; experience; and language.
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