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Abstract
The maize-oriented agricultural economies throughout Southern Africa are in fundamental
transition. Increased recognition of the costs of historical controls on pricing and marketing
already has led to partial maize market liberalization in several countries in the region.
However, there is still intense debate over the appropriate scope and implementation of future
food market reform. Much of the debate derives from uncertainty over the consequences of
comprehensive and politically risky changes to domestic markets, especially at a time when
regional market conditions are also in flux due to agricultural restructuring in neighboring
countries. There is currently little information on the direction and magnitude of grain trade
between South Africa, Zimbabwe, and other countries in the region under a deregulated external
trading environment. There is also a lack of information on the regional consequences of
alternative domestic maize policy scenarios currently under deliberation in South Africa.
The purpose of this research is fourfold. First, we consider the role of food market reform in
affecting future economic growth and food security in South Africa, and discuss the congruence
between the government's food policy objectives and the existing marketing and pricing system.
Second, trends in maize production, trade, prices and marketing costs in South Africa and
Zimbabwe, the two largest maize traders in the region, are presented. Third, we present four
alternative maize policy scenarios in South Africa, and then estimate their effects on maize
production, gross revenues, consumer prices, and trade flows under various weather and pricing
scenarios in Zimbabwe. A comparison of results across four policy scenarios clarifies the
gainers, losers, and extent of income transfers between various regions and socio-economic
groups within each region. The final section identifies means by which national food policy
objectives in South Africa may be more cost-effectively achieved through harmonization of
policies between South Africa and its regional neighbors.