South African wheat producers reject decision to retain current tariff framework
Grain SA says the government’s decision fails to address rising production costs and delays in the tariff system.
SOUTH AFRICA – South Africa’s wheat producers have strongly criticised the government’s decision to keep the current wheat tariff framework unchanged, warning that the move could weaken confidence in the country’s wheat sector and place further pressure on local farmers.
The dispute follows confirmation in the Government Gazette that the Dollar-Based Reference Price (DBRP) for wheat will remain at US$279 per tonne. Authorities also rejected a proposal to introduce an automatic trigger mechanism that would speed up the implementation of tariff adjustments.
Grain SA and the South African Cereals and Oilseeds Trade Association (SACOTA) had jointly applied for the reference price to increase from US$279 per tonne to US$289 per tonne. The industry groups also sought changes to reduce delays between tariff triggers and implementation. The government approved neither request.
Grain SA Chief Executive Officer Dr Tobias Doyer said the decision does not reflect the conditions wheat producers face across the country.
“We are not satisfied with this outcome, and we do not accept the reasoning on which it is based,” said Doyer. “The decision fails to reflect the reality on wheat farms across South Africa. Producers are under pressure from rising input costs, volatile markets, high financing costs, logistics challenges and unfair international competition.”
According to Grain SA, local wheat farmers compete against producers in other countries that often receive government support and subsidies, while South African farmers must manage increasing production costs without similar assistance.
The organisation also raised concerns about the impact of the decision on wheat quality. Grain SA said South African wheat enjoys a strong reputation among millers and processors, yet producers receive little reward for the extra costs involved in maintaining those standards.
Grain SA Chairperson Richard Krige expressed disappointment that the National Chamber of Milling opposed the tariff application.
“It is deeply disappointing that the very value chain that benefits from local wheat quality would oppose a measure aimed at keeping that production viable,” said Krige.
He warned that farmers may shift their focus away from quality if market conditions continue to offer limited returns.
“If producers cannot be paid for quality, they will have no choice but to focus on yield and quantity simply to survive,” he said.
The Government Gazette stated that the current framework continues to provide effective support and that the domestic wheat industry remains profitable. Grain SA rejects that view, arguing that costs linked to fertiliser, fuel, chemicals, labour, financing, mechanisation and logistics have risen faster than producer prices.
Despite its disappointment, Grain SA said it will continue engaging with authorities while pursuing further options to challenge the decision. “Wheat producers are not asking for special treatment,” said Doyer. “They are asking for a fair chance to survive, compete and continue producing food for South Africa.”
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