Supply Constraints, Export Opportunities and Agriculture in the Western Cape of South Africa

AbstractThe availability of land imposes constraints on the ability of agricultural industries to respond to opportunities that may accompany trade and policy liberalization, and hence limits the benefits that may be realized. This paper reports results from SAM-Leontief analyses of the impact of policy liberalisation on agriculture in the Western Cape of South Africa when agriculture is supply constrained. The results indicate that liberalisation should have benefited rural communities, especially farmworkers, but the benefits are limited by supply constraints. Relaxing these constraints, through increases in productivity, would increase substantially the benefits for agricultural and food processing industries.