Reductions in the terms of trade results in shifts in relative profitibility and thus in economic activity. Import substituting industries are benefiting relative to export industries. Since the mid seventies there were deteriorations in the international terms of trade and the domestic terms of trade of RSA's agriculture, especially that of agricultural primary products. The deterioration of the RSA exchange rate were since 1983 sufficient to compensate for inflation differentials, but agriculture experienced increasing financial pressure. More refinement of agricultural products may benefit agriculture. The South African agriculture has to concentrate on qualitative competition.