Reserva Local de Infraestructuras (RIL)

Spain is the leading producer and exporter of citrus globally. The production of fresh products is estimated at 18 million tonnes, of which 11,112,427 tonnes are destined for foreign markets (King, 2014). Exports of fresh fruit account for approximately half of the industry turnover, with a total value of €9.641 million in 2012. The country is also forecast to experience a growth of twenty percent annually in production compared to 2015 (King, 2014). In addition to being the largest producer of citrus, it is also the primary orange producer in the European Union. The leading varieties that are grown are navels, salustines, valencias, navelates and sanguinelios (King, 2014). Exports represent the highest share, with almost 50% of citrus produced destined for international markets. The country

42 is the main exporter of oranges to markets such as the European Union, China, Brazil, United Arab Emirates, Saudi Arabia and until recently, Russia (King, 2014).

The Spanish citrus industry stands out mainly because of large diversity of production areas, an extensive commercialisation calendar that covers the entire year, great innovation capability and close integration of production and commercialisation at the point of origin (King, 2014).

Compared to the citrus industry of South Africa, Spain has the upper hand in terms of the country’s production scale; export overland due to shorter market distances, production technology and government policies. The country has a large diversity of production areas meaning the production volume of citrus compared to that of South Africa is much more vast, for instance, a total area of 64 510 hectares was under citrus production in South Africa in 2014 (Department of Agriculture, Forestry and Fisheries, 2015), whereas a total area of 146 700 hectares was under production in Spain (Valverde, 2016). The majority of Spain’s citrus exports remain with the European Union, which means there is close access and shorter distance to the market. Citrus is exported overland, using cold trucks and low volumes are exported via water transportation (Cronje, 2017). Since a lower percentage of Spain’s citrus products, for example, oranges, are exported to the United States of America, less money is spent on cold sterilisation protocols. For South Africa, significant sums of money are spent on cold sterilisation protocols for shipments to the US, thus increasing production costs. This may also be attributed to the fact that the Northern American market has potential for growth hence South Africa’s continual exportation to the continent. Another advantage that Spain has over South Africa is governmental policies and support. According to the United States International Trade Commission (2006), Spain’s citrus industry is supported by the European Union’s long- standing production programs and related agricultural policies. For citrus growers and producers, the primary support mechanisms include compensation for withdrawals, which are funds paid to remove the product from the market place in an effort to stabilise prices. Other support mechanisms include export refunds, compensation to encourage fruit processing and co-financing of operational funds for producer organisations. Such policies can be considered to provide a competitive advantage to Spain’s citrus production (United States International Trade Commission, 2006). Other competitive factors between the two countries are shown in Table 4.

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Table 4: Competitive factors between Spain and South Africa’s citrus production

COMPETITIVE FACTORS

SPAIN SOUTH AFRICA

Natural Endowments Spain’s Mediterranean climate is

optimal for growing citrus, variable rainfall and periods of drought can negatively affect production. Soil quality in Spain can be very poor, characterized by low fertility and low nutrient levels. This raises the cost of growing citrus.

Many areas of major citrus production are frost free, and frost prevention is not of concern to growers. The Limpopo and Mpumalanga states within the region have some of the most fertile lands in the world under citrus production. However, water in South Africa is extremely scarce in most regions.

Water Issues Spain’s inconsistent supply of fresh

water is the key factor limiting its competitiveness in the citrus market. However, Citrus producing regions tend to have higher percentages of irrigated land. Under the EU’s rural development program, citrus farms have been provided funding to switch to more efficient drip irrigation systems.

The importance of water rights is reflected in land values. Water is rationed through a transferrable quota that can take over one year to obtain if not purchased with the entitled land.

Pests and Diseases Spain has significant problems with tristeza and medfly. Numerous programs are implemented to help combat these pest and disease conditions.

South Africa has a wide range of pests and diseases. The three main concerns to South African producers relate to export restrictions due to the presence of 1) citrus blackspot, 2) false coddling moth and 3) fruit flies. This has made cold storage become an important and necessary part of exports to protocol markets like the US.

Seasonality Spain’s citrus varieties enable its

growing season to extend almost year- round

South African citrus season is counter- seasonal to that of the northern hemisphere. The season generally runs from the end of March to the beginning of October

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Government policies Supported by EU’s long-standing

production programs.

Government assistance to the South African citrus industry is minimal. The government established an industry financed levy on citrus production to fund the CGA. Other government activities are limited to such areas as phytosanitary regulations and trade negotiations.

Source: United States International Trade Commission, 2006