Prior to the tariff, domestic consumers are willing and able to purchase more chicken at the lower world price (Pw) of R14 per kg. Local producers (in aggregate), however, are only able to competitively produce small volumes of chicken at this price (S1). This results in excess demand in the local market, which is filled by imports. Under the no tariff scenario consumers benefit due to the price constraint imposed by imports on domestic prices.

In order to increase local production, the South African government imposes a tariff of 62% per kg. The effect of this is illustrated in Figure 1 The import price increases to approximately R23 per kg[6] (Pw+t), which is just below the price at which domestic producers would be able to meet all domestic demand. Producers respond by raising their own prices to match the more lucrative price of imports, while also increasing production from S1 to S2. Imports subsequently fall from D1 to D2 as they are substituted by locally produced goods.

The effects of the import tariff on the domestic economy can be both positive and negative. To illustrate the respective losses and gains of such an import tariff, quantities have been assigned to the supply and demand curves, with S1= 500, S2 = 750, D1 = 1000 and D2 = 1500, tons, respectively[7] .

With the import tariff consumers pay higher overall prices (and also consume less) when compared to the no-tariff scenario[8] . This consumer loss is represented by areas a+b+c+d in Figure 1 and is equal to R11250[9] .

For local producers, the import tariff raises the price of imports in the domestic market. At the new higher price, local producers increase the quantity supplied. The import tariff therefore enables producers to sell at much higher prices than would be possible under the no tariff scenario. This gain to producers is represented by area a in Figure 1[10] , and is equal to R5 625 under this scenario[11] .

For Government, the increase in the tariff implies that for every unit imported government obtains revenue equal to the number of imported units multiplied by the tariff. This is represented by area c in Figure 1 and is equal to R2 250[12] . 

Areas b and d in Figure 1 represent the efficiency loss brought about by the tariff. The higher prices leads consumers to “under consume” and domestic producers to oversupply. These supply and demand imbalances lead to a sub-optimal use of resources (in this case, our desired consumption of chicken), which results in a so-called “deadweight loss” to society of R3 375[13]

Whilst the use of tariffs, in the short run, may support and protect industries, this protection is achieved mainly at the expense of consumers. Moreover, the use of tariffs can also impose a longer-term cost to society, as shown by the deadweight loss. Arguably this presents an opportunity for the use of other interventions, which could bring about similar benefits, with overall lower implicit costs. This could include, for example, incentives for training and R&D activities in the poultry sector, as well as interventions targeted at improving production efficiencies.