| Pretoria – Grain SA has strongly rejected the final outcome of the wheat tariff amendment investigation, following confirmation in the Government Gazette that the Dollar-Based Reference Price (DBRP) for wheat will remain unchanged at US$279 per ton and that no automatic trigger mechanism will be implemented.
The application, submitted by Grain SA and the South African Cereals and Oilseeds Trade Association (SACOTA), requested an increase in the wheat reference price from US$279/ton to US$289/ton, as well as a more efficient mechanism to address delays between tariff triggers and implementation.
None of the core requests made by the industry were approved.
Grain SA regards this decision as a severe blow to wheat producers and to the long-term sustainability of South Africa’s domestic wheat industry.
“We are not satisfied with this outcome, and we do not accept the reasoning on which it is based,” said Dr Tobias Doyer, CEO of Grain SA. “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. To suggest that the current framework provides adequate protection is simply not aligned with what producers are experiencing.”
Grain SA will now study all available avenues to challenge the decision and will continue to fight for a fair, workable and economically realistic wheat tariff dispensation.
South African wheat producers are expected to compete in a global market where many international competitors benefit from substantial government support, direct and indirect subsidies, and more favourable policy environments. Local producers receive no comparable support, yet are expected to carry the risk of production, maintain quality standards, absorb cost increases and compete against imports priced in a heavily distorted global market.
“This decision effectively tells producers that they must continue producing under increasingly difficult conditions while receiving insufficient policy support,” said Doyer. “That is not sustainable. If South Africa wants local wheat production, then policy must recognise the realities of producing wheat in this country.”
Grain SA is particularly concerned that the current policy approach undermines the very quality strategy that South Africa’s wheat industry has worked hard to maintain.
South African wheat producers produce high-quality wheat that is highly valued by millers and processors. However, the market does not reward producers adequately for that quality. Producers are expected to deliver quality, but the pricing environment does not support the additional cost and production risk associated with producing that quality.
Grain SA is particularly disappointed that the application was opposed by the National Chamber of Milling, representing an industry that depends directly on the quality wheat produced by South African farmers.
“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. “Millers value South African wheat quality, but producers cannot continue carrying the cost and risk of that quality if the market and policy environment refuse to reward them for it.”
“If quality is not valued and paid for, producers will increasingly be forced to reconsider their production strategies,” said Richard Krige, Chairperson of Grain SA. “South African wheat producers have been encouraged to produce quality wheat, but the market and policy environment are not rewarding them for it. If producers cannot be paid for quality, they will have no choice but to focus on yield and quantity simply to survive. These are basic business principles, not threats. You cannot continue producing quality if there is no market for quality.”
Grain SA warns that this outcome may accelerate a shift away from high-quality wheat production, as producers are forced to prioritise yield, cultivars and production decisions that offer the best chance of financial survival.
The Government Gazette states that the current DBRP continues to provide effective support, enables profitability and that the domestic wheat industry remains profitable. Grain SA strongly disputes this conclusion.
The organisation maintains that the assumptions used in the decision do not reflect the pressure at farm level. Input costs have increased sharply over the past decade, while producer prices have failed to keep pace with the full cost of production. Fertiliser, fuel, chemicals, labour, financing, mechanisation and logistics have all placed sustained pressure on wheat farming businesses. The commission is of the opinion that net farm gate price prices increased more than the increases in input costs.
The decline in planted wheat hectares further contradicts the view that the current system is providing sufficient support. Producers continue to reassess whether wheat remains a viable crop in their farming systems, and policy uncertainty is further weakening confidence.
“The real test of policy is not what it looks like on paper,” said Krige. “The real test is whether producers are confident enough to keep planting. At the moment, that confidence is being eroded.”
Grain SA is also deeply disappointed that government has acknowledged delays in tariff implementation but has failed to provide a practical, immediate solution.
The Gazette recognises that delays between a tariff trigger and implementation can undermine the effectiveness of the tariff and create market distortions. However, instead of approving an automatic trigger mechanism or providing a clear alternative, the final outcome refers the matter for further engagement between government departments (after already deliberating for 19 months).
“This is one of the most frustrating aspects of the decision,” said Doyer. “Government acknowledges that the system is inefficient, but producers are once again left without certainty, without timelines and without a working solution. Wheat producers cannot make planting and investment decisions based on endless future consultations.”
Grain SA believes this decision sends the wrong signal to producers at a time when South Africa should be strengthening local food production, job creation, reducing import dependency and building greater resilience in the agricultural value chain.
A weakening domestic wheat industry will not only affect wheat farmers. It will affect input suppliers, machinery dealers, transporters, storage facilities, millers, rural towns, workers and consumers. Reduced local production increases South Africa’s exposure to international price shocks, exchange-rate volatility, export restrictions and global supply disruptions.
Consumers may believe that limited tariff protection benefits them in the short term, but the long-term consequences of declining local production will ultimately be carried by the entire country.
“The question is not whether South Africa can afford to support its wheat producers,” said Krige. “The question is whether South Africa can afford to lose them.”
Grain SA remains committed to constructive engagement, but it will not remain silent when producer sustainability is placed at risk.
The organisation will continue to advocate for a wheat tariff framework that is fair, responsive and grounded in economic reality. Grain SA will also pursue the necessary avenues to appeal or challenge the outcome and will intensify its engagement with government, industry stakeholders and producers to determine the way forward.
“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. Wheat farmers collectively, as Grain SA, will continue this fight for survival.”
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