Determinants of trade patterns and comparative advantage of processed agricultural products of SADC
Mmatlou Kalaba and
No 206516, Working Papers from University of Pretoria, Department of Agricultural Economics, Extension and Rural Development
The Southern African Development Community (SADC) countries in general are facing new challenges of realising the pre-recession economic performance. This is in addition to the normal challenges of reducing food insecurity and poverty, unemployment and to continue improving the living standards. Agriculture is at the centre of most of these activities that have high likelihood of making most contribution given the growing population, demand for food and growth in urbanisation. In addition the sector engages many people in rural areas, has many linkages with other sectors of the economy and utilises unskilled labour force. Therefore a thriving agricultural sector has a potential to have more inclusive growth than any other sector. The trade patterns of agricultural and processed products are evaluated using the Balassa revealed comparative advantage method and the augmented gravity model to determine factors that influence trade. The results show that the share of agricultural trade in SADC is higher than the world average, and thus SADC has comparative advantage in agriculture. However, there are concerns that over time some of the SADC member countries and the have been losing comparative advantage in agriculture. Such advantage in processed and high value agriculture products is low and applicable to few countries. The contributing factors are high trade costs due to poor infrastructure, corruption perception and high administrative requirements. The situation challenges and limits the sector’s potential to contribute further towards the economic growth and development. This also implies that potential gains from trade may not be fully realised.
Keywords: Agricultural and Food Policy; Public Economics (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ags:upaewp:206516
Access Statistics for this paper
More papers in Working Papers from University of Pretoria, Department of Agricultural Economics, Extension and Rural Development Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().