Maize import protection request attracts vehement opposition

A request by Grain
SA for import
protection – to
safeguard the local
industry from what it feels
is unfair competition – has
attracted opposition from
various quarters.
While the International
Trade Administration
Commission (Itac) said the
investigation into the current
maize import duty structure
was only in its
“preliminary
phase”, the
National
Chamber of
Milling (NCM)
has been vocal
in its “vehement
opposition” to
the application.
“Why do we
need protection
for a commodity
that we are so
self-sufficient with?” said NCM
executive director, Boikanyo
Mokgatle. “We cannot shy
away from the fact that it could
actually end up being a cost to
the consumer.”
He also contended that an
import duty could raise local
milling and production costs.
Mokgatle also questioned Grain
SA’s timing, asking why it had
only submitted an application
late last year when it had
become apparent that SA would
need to import large quantities
of maize to meet
local demand.
Grain SA
CEO, Jannie de
Villiers, refuted
this, pointing
out that the
agricultural
body had
prepared its
request in
June and July
last year –
long before
the drought had hit and
had severely impacted local
production.
According to De Villiers
it is “common knowledge”
that almost all the big
maize-exporting countries’
governments are subsidising
their farmers. “South African
farmers get almost no
assistance from government
and we have requested that we
get protection against these
governments.”
He said local prices for corn
had almost doubled and were
now going for US$348 per
tonne, while in United States
– the world’s biggest producer
of corn – prices had dropped
to US$145 per tonne. “Should
global prices fall further, due
to a production glut, South
African producers will not
be able to compete,” said De
Villiers.
Higher maize prices
would, however, impact other
agricultural sectors. Johan
Willemse, an agricultural
economist at the University of
the Free State, told FTW that
livestock farmers already could
not afford to feed their cattle.
“If import duties are imposed
on maize, it will add to the cost
of meat production, making
that industry less competitive,”
he commented.
It is “irresponsible” to look at
trying to protect a local industry
while the country is facing a
shortage, said Willemse.
Grain SA, according to
De Villiers, informed “all
stakeholders” that it was happy
for Itac – should it find in
favour of the maize farmers’
request for protection – to only
implement the duty tariff in
May 2017.
An Itac spokesperson
could not say how long
the investigation would
take but did say it could be
“several months” before any
kind of recommendation
could be made.
INSERT & CAPTION
South African
farmers get almost
no assistance from
government.
– Jannie de Villiers
CAPTION
Local maize production has decreased dramatically because
of the drought, putting pressure on the agricultural sector.