Maize is the most grown staple crop in Africa, and white maize is of particular importance because it is the dominant staple food particularly throughout southern Africa to the extent that maize shortages lead to food security emergencies. These emergencies are compounded by SADC’s limited ability to respond to production and supply shocks. In response to these shocks, SADC countries supplement local maize production with trade and food aid leading to a robust regional white maize market. In an attempt to bolster trade SADC member states sign substantial regional arrangements, with similar objectives and common participants all in the hope of strengthening trade and with it maize trade. This study seeks to find means to improve intra-SADC maize trade relations, through defining the determinants for intra-regional maize trade, and determine if SADC members’ sub-regional groupings have an effect on maize trade. The study makes use of a gravity model to estimate the value of trade; specifically a Tobit model with random effects by Maximum Likelihood Estimation. The partner country population was found to have a positive effect (0.749) on maize trade at 5% level of significance. This suggests that countries that have greater populations and consequently larger market sizes for the regional staple maize tend to trade more. Maize aid distribution was found to be a statistically significant determinant of intra-regional maize trade to the extent that it encourages regional maize trade. Transport infrastructure was also found to positively influence intra-SADC maize trade, as infrastructure transportation systems are critical for the purposes of moving goods and labour to facilitate production and trade. The premise that bilateral maize trade between any two countries is negatively related to the relative importance of economic relationships between the reporter country and the partner countries that are located far away, as opposed to those located nearby, is supported by the negative impact distance has on maize trade (-1.670 significant at 10% level), while the propensity to trade increases if the two trading countries share a common border. The net grain position of member states influences intra-SADC maize trade as shown by the statistically significant positive relationship between trade and a net grain deficit position, suggesting that SADC member states are likely to engage in intra-SADC trade should they find themselves in a deficit trade position presumably from the nearest most accessible surplus state. Sub-regional groups SACU and COMESA were found to have no influence on maize trade.
Dissertation (MSc(Agric))--University of Pretoria, 2013.