In an interview with Business Report Chief Commissioner, International Trade Administration Commission of South Africa (ITAC) Chief Commissioner Ayabonga Cawe, explained the commission's recommendation to leave the Dollar-Based Reference Price (DBRP) for wheat unchanged at $279 (about R4,558
The International Trade Administration Commission of South Africa (ITAC) has defended its decision to keep the Dollar-Based Reference Price (DBRP) for wheat unchanged at $279 (about R4,558) per ton, arguing that current farm-gate prices are sufficient to cover producers' costs while continuing to shield the industry from unfairly subsidised imports.
ITAC chief commissioner Ayabonga Cawe told Business Report on Friday that the commission's recommendation was guided by the fundamental purpose of the DBRP, which is to protect South African wheat farmers against distortions caused by heavily subsidised global wheat production.
“The function of that is to provide effective cover against distortion from subsidies in the world market. Such cultural products can have a depressing effect on imported prices of the globally produced commodity,” he said.
“It's produced in certain parts of the world where it's subject to significant subsidies for planting. And that artificially suppresses prices where there is oversupply.”
