Grain SA said ongoing delays in South Africa’s wheat tariff review process are placing additional pressure on local wheat producers already struggling against subsidized global competitors and volatile market conditions.
Ahead of a panel discussion at NAMPO Harvest Day titled Trade Wars, Tariffs & Opportunities, the organization said the prolonged wait for final implementation of proposed wheat tariff changes has become a major concern for the grain industry.
Grain SA and the South African Cereals and Oilseeds Trade Association submitted a joint application to the International Trade Administration Commission in June 2024 seeking changes to the wheat tariff system. The proposal called for an increase in the domestic dollar-based reference price for wheat and improvements to the methodology used to implement wheat import tariffs.
According to the organizations, the current tariff structure no longer provides adequate protection against subsidized wheat imports and volatile international markets. Grain SA said delays in publishing and implementing tariffs have reduced the effectiveness of the system at a time when local producers are under mounting financial strain.
The organization said South African wheat producers are competing against countries where governments provide extensive agricultural subsidies, trade protections and other support measures unavailable to domestic farmers.
Grain SA described the wheat tariff mechanism as one of the few tools available to offset distortions created by subsidized imports and maintain the competitiveness of the local wheat industry.
Richard Krige of Grain SA said the tariff system is intended to create fairer competitive conditions rather than serve as a protectionist measure. He explained producers need a tariff mechanism capable of responding quickly to changing global market conditions and warned that prolonged delays are creating economic consequences for farmers making production and investment decisions.
Global trade tensions, export restrictions, regional conflicts and supply chain disruptions are increasing the importance of maintaining domestic agricultural production capacity and reducing dependence on imports.
The organization also warned that the effects of global trade instability are already influencing producer profitability, planting decisions and long-term food security in South Africa.
Although nearly two years have passed since the application was submitted, the industry is still awaiting final implementation of the proposed tariff adjustments.
During that period, global wheat prices have continued to decline while South African producers have faced rising input costs, infrastructure limitations, logistics challenges and uncertainty surrounding trade policy. Grain SA recently cautioned that many wheat producers are operating below sustainable levels.
The organization emphasized that it supports a rules-based and predictable trade system rather than opposing trade itself. Grain SA said the wheat tariff framework is designed to address distortions caused by subsidized international production and abnormal market conditions, not to artificially raise consumer food prices.
According to the organization, historical industry analysis has shown that wheat prices paid to producers account for only a small share of the final retail price of bread, while maintaining domestic wheat production provides broader economic benefits for rural communities and agricultural supply chains.
Source: Grain SA, "Grain SA Warns Wheat Producers can No Longer Wait for Delayed Tariff Decision"