The Industrialization of Freshness and Structural Transformation in South African Fruit Exports

Abstract

Abstract Economists have historically tended to identify industrial processes and technological sophistication with manufacturing, and not with agriculture. This chapter illustrates the substantial scope to apply sophisticated technologies and industrial processes necessary to shift resources out of low-productivity activities into higher-productivity activities, i.e. to generate ‘structural change’ in the production of ‘fresh’ agricultural export production. Leveraging the concept of the ‘industrialization of freshness’, this chapter uses evidence from South Africa’s fresh-fruit industry to show how advances in technology have been a key mechanism through which structural transformation towards high-value fruit has occurred in the industry. The chapter also shows how building capabilities to harness technological changes is necessary for increased market access through enabling producers to keep up with escalating quality standards; to comply with the many—and complex—sanitary and phytosanitary requirements; and to adapt to climate change. However, despite evidence of dynamism in fruit production, effective structural transformation in the South African fruit industry has been limited by widespread underinvestment in infrastructure—ports, rural internet capacity, water infrastructure, and technical capacity.