RESTRICTED
WORLD TRADE IMA/INV/9/Rev.2
6May1997
ORGANIZATION(97-1961)
International Bovine Meat Agreement
INTERNATIONAL MEAT COUNCIL
Inventory ofDomestic Policies andTrade Measures
South Africa
Parties haveagreed to"provide information ontheirdomestic policies andtrade measures
including bilateral andplurilateral commitments inthebovine meatsector, andshallnotify assoon
aspossible anychanges insuchpolicies andmeasures thatarelikely toaffect international trade in
bovine meatandliveanimals" (Article III:3). TheSecretariat "shall draw upandkeepuptodatean
inventory ofallmeasures affecting trade inbovine meat andliveanimals, including commitments
resulting from bilateral, plurilateral andmultilateral negotiations" (Article III:4).
Thedocumentscontainingtherepliestothequestionnaireondomesticpoliciesandtrademeasures
arecirculated under theseries IMA/INV. They willberevised asandwhen changes arenotified.IMA/INV/9/Rev.2
Page2
PART F
Inventory ofDomestic Policies andTrade Measures andInformation on
Bilateral, Plurilateral orMultilateral Commitments
Since theearly 1980s there hasbeenasubstantial shiftinagricultural marketing policy. The
trend towards amore liberalized economy andgreater exposure tomarket forces intherestoftheworld
demanded change -alsoinSouth Africa. Inthisregard mostofthecontrol boards including theMeat
Board havebeeninvolved invarious deregulation exercises andtherigorous control andintervention
isinmost cases becoming partofhistory.
Following theinternational trend towards liberalization ofintervention aswellasother factors
suchasthegrowing gapbetween producer andconsumer prices ofagricultural products andtherapid
riseinfoodprices, anumber ofreports haveemanated since 1992 dealing withthese factors and
suggesting solutions. These include theBoard onTariffs andTrade, Committee ofInquiry intothe
MarketingAct(KassierCommittee)andAgriculturalMarketingPolicyEvaluationCommittee(AMPEC).
Subsequent tothese reports anewWhite Paper forAgriculture hasbeen approved. The
philosophy ofafreermarket withlimited intervention isalsocontained inthisdocument. Inorder
toimplement thesuggestions made bythedifferent committees, theguidelines contained inthenew
White Paper andtheprinciples setoutintheReconstruction andDevelopment Programme, theMinister
ofAgriculture appointed aworking group todraftanewMarketing Act.TheMarketing ofAgricultural
Products Act,1996, came intooperation on1January 1997. ThisActsupports amore liberalized
agricultural marketing dispensation.
TheActwasdrawn upagainst thebackground ofthedynamic environment inwhich agriculture
currently finds itself. Certain principles contained intheConstitution wereaccommodated toensure
thecompatibility oftheActwiththeConstitution. TheConstitution provides conditionally thatevery
person shallhavetherighttofreely engage ineconomic activity andtopursue alivelihood anywhere
inSouth Africa. While there isamovement towards afreermarket, thenecessity forlimited market
andauxiliary intervention remains. ThenewAct,which isanenabling Act,makes provision forsuch
interventionifsufficientsupportbyallaffectedpartiesandmotivationthereforecanbeproven.Provision
isalsomade forbodies which canimplement andmonitor suchintervention. TheMinister remains
thepolitical custodian oftheActandisresponsible forallactions taken interms thereof.
South Africa 'spolicy with regard tomeat hasalsoundergone changes following the
implementation ofWTO commitments.
1. Production
Beefproduction forms inmostpartsofSouth Africa anintegral partofamixed farming system.
Income derived from thisbranch offarming contributes largely totheeconomic viability offarming
enterprises andthesustainment oftherural population. Beefrepresents approximately 68percent
(1996) ofallredmeatproduced inthecountry. During 1996, beefproduction contributed approximately
11.4percenttothegross value ofallagricultural production andapproximately 68.6percenttothe
gross value oftotalredmeatproduction. Beefproduction islargely dependent onnatural grazing and
cultivated pastures although atpresent 60percentofallslaughtered stock ismarketed through feed-lot
operations.
Duetothemixednatureoffarmingareasonableestimateofthenumberofcattlefarmsisdifficult
toestablish. However, atypical beeffarmis3,800 hectares inextent withabeefherdofapproximatelyIMA/INV/9/Rev.2
Page3
380animals. Thetotalcattle population inthecommercial sector ofthecountry isabout 8.4million
units. (Accurate figures forthesubsistence andsemi-commercial sectors arenotavailable.)
AsSouth Africa isgenerally adeficit beefproducer, beefproduction isprimarily domestically
orientated. During October andNovember 1990, quantitative restrictions onmeatimports werereplaced
withtariffs. TheMeat Board istherefore nolonger animporter ofmeatandanyperson canimport
meat, provided thattheapplicable import duties arepaid.
(a) Factors influencing theevolution ofthebeefindustry
1. Theeconomic implications ofchanging weather conditions.
2. Productions costs.
3. Improved technology andmanagerial skills.
4. Competition from alternative farming enterprises.
5. Population growth, which iscurrently 2.15percentperannum, affects demand.
6. General availability ofother meats. Broiler production andimports areatahighlevel
andpoultry meatissubstituted forredmeatbyconsumers.
7. Steadily rising income levels during thepastdecade coupled withanincome elasticity
ofdemand substantially greater thanunity among thelower income groups.
(b) Policies andmeasures oftheGovernment
1. Research byGovernment Institutions anduniversities andguidance toproducers
inrespect ofbreeding andpasture management, disease control andgeneral management
practices.
2. Drought andflood schemes operated bytheGovernment.
3. Theslaughtering ofcattle andthemarketing ofbeefaresubject tohealth and
sanitary standards imposed bytheGovernment. Intheclassified abattoirs governmental
classification regulations andinspection services arealsoinforce.
4. TheGovernment isfurthermore involved inschemes fortheprevention and/or
eradication ofanimal diseases, e.g. amandatory dipping scheme andpreventative
measures inrespect ofthespreading offootandmouth disease from adjoining territories.
(c) Present functions oftheMeat Board (Interms oftheMarketing oftheAgricultural
Products Act,1996, allcontrol boards, including theMeat Board, which wereestablished in
terms oftheMarketing Act,1968, willbeterminated in1997.)
1. Management information
Toestablish areliable management information function addressing alluserneeds as
cost-effectively aspossible through theappropriate collection, processing, evaluation
anddistribution ofinformation sothatinformed management decisions canbetaken
byallrole-players intheindustry.IMA/INV/9/Rev.2
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2. Product promotion
Toestablish adynamic product promotion function thatisconstantly intouch with
thechanging marketing environment soastopromote theconsumption ofredmeat.
3. Market development
Todevelop themarket forredmeatinboththeformal andinformal markets.
4. Liaison function
Tofacilitate andpromote effective liaison between allrole-players intheindustry.
5. Production promotion
Toestablish aneffective production promotion system soastostabilize andsatisfy
allneeds withregard toproduction intheredmeatindustry inSouth Africa.
(d) Structure oftheMeat Board
Duetothechanging external environment andthedynamic nature oftheBoard, the
functions oftheBoard aremanaged bywayofanorganizational strategy adapted andupdated
atleastonceevery year, depending onchanged objectives andaction plans. Interms ofthe
newMarketing ofAgricultural Products Act,theMeat Board willbephased outbytheend
of1997. Itisnotclear whatwillhappen regarding thepresent functions oftheBoard.
(e) Levies collected for1996
TheMeatBoard operates aspecial fund, within theMeatMarketing Scheme, which isfinanced
fromspecial levies paidbyproducers, i.e.distinguished fromordinary levies imposed tocover
administration costs. Aspecial levyisimposed onallcattle slaughtered andmarketed inthe
Republic ofSouth Africa. Thelevies aredeposited inaspecial levyfundfrom which the
functions oftheMeat Board arefinanced. Thespecial levyratefor1996 wasasfollows:
Cattle - 352cpercarcass
Calves - 74cpercarcass
Sheep andgoats - 34cpercarcass
Pigs - 334cpercarcass
(f) Average returns toproducers for1996
Auction markets -average auction price forcattle -786c/kg.
Returns toproducers comprise theabove auction price plusproceeds from thesaleofoffal
andhides, lessmarketing andtransport costs. Thereturn toproducers for1996 was
approximately 747c/kg.IMA/INV/9/Rev.2
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2. Internal prices andconsumption
(a) MeatconsumptionisstimulatedbypromotionalactivitiesoftheMeatBoard.Expenditure
inthisrespect amounted toapproximately R11.9million for1996. Inthepastthe
Meat Board operated asurplus removal system. During periods ofoversupply, the
Board purchased carcasses which could notbesoldatprices above theguaranteed
minimum prices. Thisfunction oftheBoard wasterminated in1993.
(b) Entrants tothetrade aresubject tohealth regulations ofthelocalauthorities.
(c) Generally, theretail mark-up isintheorder of100percentonwholesale prices.
(d) Factors influencing localconsumption
(i) Actual beefprices andtheirrelationship toprice levels ofcompeting meats
andother protein foods.
(ii) General availability andinputs ofbeefandother meats. Broiler production
andtheimportation thereof playanimportant role.
(iii) Changing levels ofpersonal disposable income, especially inrespect ofthe
lower income groups.
(iv) Income elasticity ofdemand oflower income groups issubstantially greater
thanunity.
(v) Population growth. Thiscurrently exceeds 2percentperannum.
(vi) Advertising.TheMeatBoard'sexpenditureonthepromotionofbeefamounted
toapproximately R5.7million in1996.
(vii) Health consideration ofredmeatasperceived byconsumers.
3. Measures atthefrontier
Tariff line Description ofproduction Applied rateofduty
02.01.00.00
02.01.10.00
02.01.20.00
02.01.30.00MEAT OFBOVINE ANIMALS, FRESH ORCHILLED
Carcasses andhalf-carcasses
Other cutswithbone in
Boneless40%
40%
40%
02.02.00.00
02.02.10.00
02.02.20.00
02.02.30.00MEAT OFBOVINE ANIMALS, FROZEN
Carcasses andhalf-carcasses
Other cutswithbone in
Boneless40%
40%
40%IMA/INV/9/Rev.2
Page6
Tariff line Description ofproduction Applied rateofduty
02.03.00.00
02.03.10.00
02.03.11.00
02.03.12.00
02.03.19.00MEAT OFSWINE, FRESH, CHILLED ORFROZEN
Fresh orchilled:
Carcasses andhalf-carcasses
Hams, shoulders andcutsthereof, withbone in
Other:15%
15%
02.03.19.10
02.03.19.90Rib
OtherFree
15%
02.03.20.00
02.03.21.00
02.03.22.00
02.03.29.00
02.03.29.10
02.03.29.90Frozen:
Carcasses andhalf-carcasses
Hams, shoulders andcutsthereof, withbone in
Other:
Rib
Other15%
15%
Free
15%
02.04.00.00
02.04.10.00
02.04.20.00
02.04.21.00
02.04.22.00
02.04.23.00
02.04.30.00
02.04.40.00
02.04.41.00
02.04.42.00
02.04.43.00
02.04.50.00MEAT OFSHEEP ORGOATS, FRESH, CHILLED OR
FROZEN
Carcasses andhalf-carcasses oflamb, fresh orchilled
Other meat ofsheep, fresh orchilled:
Carcasses andhalf-carcasses
Other cutswithbone in
Boneless
Carcasses andhalf-carcasses oflamb, frozen
Other meat ofsheep, frozen:
Carcasses andhalf-carcasses
Other cutswithbone in
Boneless
Meat ofgoats40%
40%
40%
40%
40%
40%
40%
40%
02.06.00.00
02.06.10.00
02.06.10.10
02.06.10.90
02.60.20.00
02.06.21.00
02.06.22.00
02.06.29.00EDIBLE OFFAL OF BOVINE ANIMALS, SWINE,
SHEEP, GOATS, HORSES, ASSES, MULES OR
HINNIES, FRESH, CHILLED ORFROZEN
Ofbovine animals, fresh orchilled:
Liver
Other
Ofbovine animals, frozen:
Tongues
Livers
Other30%
Free
Free
30%
Free
16.02.50
06.02.50.30
16.02.50.40
16.02.50.90Canned beef
Tripe
Other dehydrated, inimmediate packings ofcontent
of5kgs.ormore
OtherFree
Free
40%IMA/INV/9/Rev.2
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(b) Exports ofbeef, vealandpork, cattle, calfandpigoffal andallmeat products
manufactured from theabove-mentioned excluding canned meat products are
subject tostatistical monitoring interms ofSection 87oftheMarketing Act.
(c) Interms ofActNo.35of1984, theAnimal Diseases Act,allimports ofanimals and
animal products intoSouth Africa aresubject toaveterinary import permit issued by
theDirector ofAnimal Health oftheDepartment ofAgriculture. Thepurpose ofthis
legislation istheprotection ofSouth Africa from aveterinary health point ofview.
Interms oftheAbattoir Act(No. 121of1992) anymeat plant inacountry wishing to
export meattoSouth Africa mustbeapproved bytheDirector ofMeatHygiene inSouth Africa.
Fresh meatisimported intheform ofanatomically recognized cutsofmeatormechanically
recovered meat(MRM). Onarrival inSouth Africa thephysical condition, temperature and
bacterial counts ofthemeataremonitored. Consignment notcomplying withSouth African
standards arecondemned andmust bereturned tothecountry oforigin orused forthe
manufacturing ofpetfoods under Departmental supervision.
TheAgricultural Product Standards Act,1990 (ActNo.1219 of1990), makes provision for
theimposition ofquality standards. ThePerishable Products Export Control Board (PPECB)
isassigned, under Section 2oftheAct,toperform theexport inspection function onbehalf
oftheDepartment ofAgriculture.
Theneighbouring States traditionally supply alarge share ofthecountry 'simports ofbeefin
theformoffrozen andchilled quarters andlivecattle. These imports aresoldinSouth Africa
onthesame basis asdomestically produced beef.IMA/INV/9/Rev.2
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PART G
Description ofBilateral, Plurilateral andMultilateral Agreements
(a) TheTrade Agreement between South Africa andMalawi allows allgoods grown, produced
ormanufactured inMalawi, including meatandmeatproducts, tobeexported under permit
toSouth Africa freeofacustoms duty.
(b) TheTrade Agreement between South Africa andZimbabwe provides forimports, under permit,
freeofcustoms dutyoratarebate ofduty, covering awiderange ofproducts, including the
following: cattle, beef, vealandother edible products produced fromthecarcasses ofcattle,
excluding meatextract, meatpaste, meatpowder, potted meatandcanned meat.
(c) TheSouthern African Customs Union Agreement (SACUA) wasoriginally signed in1910
afterSouth Africa became aUnion. TheSACU includes Botswana, Lesotho, Namibia, South
Africa andSwaziland.
TheSACUprovidesforfreetradeinagriculturalproductsonconditionthatagriculturalmarketing
arrangements inforce inthedifferent regions ofthecommon customs areashould beapplied
onanequitable basis tosimilar commodities produced inanyother region, andmarketed in
theregion where themarketing arrangement isinoperation. TheAgreement alsoprovides
forconsultations onmatters affecting production andconsumption ofagricultural products,
aswellastheimprovement andextension ofmarketing arrangements. TheAgreement is
currently under revision andanewrenegotiated Agreement should hopefully befinalized during
1997.