Trade, Rural Poverty & the Environment Project Profiles

South Africa

In South Africa, a team affiliated with the School of Development Studies, University of KwaZulu-Natal, investigated how trade liberalization can lead to increasing demands on a scarce resource, exacerbating conflict and underlining the importance of strong and effective governance. Specifically, they focused on the economic and environmental implications of the recent liberalization of the European Union sugar market for the Incomati River Basin. The project highlights crucial trade-offs linked to South Africa’s response to trade reform, rural poverty alleviation, and environmental integrity, and proposes a rationalization of SADC sugar production and trade.

The Incomati Basin, in northeastern South Africa, is one of the country’s major sugar-producing areas. It is also a severely water-stressed area, and sugar farmers share water with other agricultural producers, rural communities, and downstream claimants, particularly in Mozambique. South Africa's new Water Act has recognized access to water as a basic human right and ecological necessity and has brought a wide range of competing claimants into the process of deciding how to apportion a scarce resource at the local level. This approach to mediating trade-offs will be tested further as demand grows for South African sugar with the reduction of international sugar subsidies and the increase in global demand for biofuels.

The study underlines the informational constraints under which policymakers operate, especially with respect to the impact of economic changes on the very poor. It suggests which data would be needed to improve our understanding of a very complex situation, and how they could be generated. It also recommends how in the meantime the policy regime might safeguard vulnerable members of rural communities and ecological integrity against possible adverse consequences of economic change.

The project includes an outreach component aimed at engaging stakeholders in an analysis of the research findings, and ensuring appropriate strategy formulation around this and future trade events. This work is conducted by McIntosh Xaba & Associates. Working with the national water ministry, local government, farmers, and other groups, the team will seek to generate recommendations for achieving better resource governance and the management of tradeoffs between sugar farmers and downstream users.

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