Agricultural rebates – who qualifies and why

In line with the objectives of the Tariff Investigations Unit of Itac – to promote domestic production, job creation, and international competitiveness – there are several trade policy instruments in place for products for which detailed separate tariff lines are impractical for tariff administration purposes. These instruments – which include duty rebate and drawback provisions – are designed to provide a customs duty waiver and therefore an availability at world competitive prices of products that attract duties but are not produced or insufficiently produced domestically as an industrial or agricultural input for certain critical applications, as a capital item, or as an agricultural product for consumption. The following rebate provisions are in place for agricultural and fisheries products: Rebate of the duty on certain types of red meat imported for manufacturing/processing purposes, (Rebate Item 304.01) Created to reduce the cost of inputs and to improve the Sacu meat manufacturers’ competitiveness. Manufacturers of meat of sheep or goats, frozen or boneless, qualify for a partial rebate (full duty less 56c/kg) and manufacturers of meat of bovine animals, frozen or boneless, for the manufacture of prepared or preserved meat in airtight metal containers, qualify for a full duty rebate under this provision. Rebate of duty on imported salmon and dried fish for further processing by means of smoking, (Rebate Item 460.01). The rebate of the customs duty on imported salmon used as raw material by SA fish processors was made to avoid the negative impact that the increase in duty would have on employment in the SA fish processing industry. Only fish processors qualify. Rebate of the duty on imported oilcake for the manufacture of animal feed, (Rebate Item 304.07). Created as a result of a rebate provision created for soya beans for manufacture of biofuels. The Commission had already approved a rebate provision for soya beans for Sacu producers of biodiesel, based on the shortages experienced in the Sacu market. It was found that, if a similar rebate provision was not created for soya oilcake, which is also subject to significant shortages, an unfair trading environment would be created, favouring the biodiesel producers in a market removed from their core business area. Only manufacturers of animal feed qualify for a permit under this rebate provision. The provision however has never been used as it is linked to the use of the rebate provision on soya beans which also has never been used. Rebate of duty on imported canned pineapples for consumption and for manufacturing purposes, (Rebate Item 460.04). As a result of the adverse effects of the cadmium contamination due to the fertilisers used by the pineapple growers during the latter part of 2006, the South African pineapple growers were unable to supply the market with pineapples suitable for canning. Only the processors/ manufacturers of products containing pineapples qualify for a full duty rebate. Other consumers will only qualify for a full duty less 20% partial rebate. Rebate of the duty on imported dried, crushed or ground fruits of the genus Capsicum for the extraction of oleoresins of a kind used in the food industry, (Rebate Item 460.02). The rebate was created because sufficient quantities at the required quality of the dried or crushed or ground fruits of the genus Capsicum (specifically dried paprika) are not available in the Sacu. Only the Sacu paprika oleoresin extractors qualify for a permit under this rebate provision. Temporary rebate of duty on mango juice concentrate classifiable under tariff subheading 2009.80.10, (Rebate Item 460.04). Created because there was a shortage of mangoes for the 2008/2009 season and the mango juice concentrate processors were unable to meet the market demand. Only the Sacu mango juice concentrate producers and mango juice producers including downstream mango juice blenders and packers qualify for a permit under this rebate provision. However, permits will only be issued after consultation with the industry stakeholders confirming a shortage of mangoes for production of mango juice concentrates due to unforeseen natural disasters like drought. Application forms available from www.itac.org.za