Comparative advantage of potato production in seven regions of South Africa

The focus of this research was to investigate the comparative advantage of the potatoindustry in seven potato production regions in South Africa. Potatoes are the most importantvegetable crop produced in South Africa. In 2008 it contributed more than 40% to the totalproduction of vegetables in South Africa and it accounted for more than 20% of the value ofall fresh produce sold on all the major national fresh produce markets. This study uses theResource Cost Ratio (RCR) methodology that provides an explicit indication of the efficiencywith which production alternatives uses domestic resources to generate or save foreignexchange. The Nominal Protection Ratio (NPR) and Effective Protection Coefficient (EPC)were also calculated.The results show that current policies that affects the input market for potato production inSouth Africa is constraining the potato industry. This was confirmed by the results obtainedfrom the NPR and EPC analysis, and the size of the policy distortions was shown through thecalculation of market and economic profitability. If current policies prevail potatoproduction in the Eastern Free State will not have a comparative advantage, but in theabsence of such policies all production regions have a comparative advantage.