Trade and Industry

Friday, 10 July 2009

The 2007/8 Food Crisis: The Case of Maize and Maize Taxation in Southern Africa

  • Year: 2009
  • Organisation: TIPS, BIDPA; Trade and Pro-Poor Growth Thematic Working Group
  • Author(s): Roman Grynberg;Maseddi Motswapong
  • Countries and Regions: South Africa, Southern Africa Customs Union (SACU), Southern African Development Community (SADC)

Maize is the most important staple cereal product consumed in the Southern African region. The purpose of this paper is to examine the origins of the global 2007/8 food price crisis and the impact this had on the trade in maize within the SACU customs union as well as to consider the impact on consumer prices of maize. The reason why maize is central to this issue is not simply because of its roles as the principle staple food product of the SACU region but because much of the global crisis that occurred in 2008 had its origins in changes in US ethanol policy which were related specifically to the maize sector. The paper also considers whether in fact changes in VAT policy with appropriate and targeted poverty alleviation programs will achieve the objective of decreasing poverty in the SACU region. Lastly the paper considers duty on maize meal and processed maize products which serves to raise the import parity price for meal in an already oligopolistic market.