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THE
GRAIN AND OILSEED INDUSTRY
OF SOUTH AFRICA – A JOURNEY THROUGH TIME
ႅႄ
Consequently the Maize Board and the consumer organisations agreed to nego-
tiate jointly for the biggest possible government subsidy with a view to try and
limit the increase in the consumer price for maize products to the inflation rate.
The government was requested to subsidise the industry with R275 million, which
was equal to the bread subsidy, but this was not acceptable to the government.
The government eventually agreed to a subsidy of between R160 million and
R170 million, which was sufficient to finance the Maize Board’s margin, administra-
tive costs and about 50% of the costs of its publicity campaign.
Minister Wentzel’s announcement on 25 April 1985 that the maize price would
not be increased from the previous year’s levels (because of which the NAMPO
members resigned from the Maize Board) caused great dissatisfaction among
producers too, and led to a number of actions by them, discussed more fully in
Chapter 2.
1987: NAMPO members on the Maize Board again
In 1987, two years after the NAMPO members had resigned from the Maize Board
in protest against the Maize Board, Minister Wentzel (Agriculture) announced that
the two parties were negotiating again to try and resolve the situation. It was
subsequently agreed that the producer members of the Maize Board would be
appointed from NAMPO nominees again. It was also agreed with the Minister of
Agriculture that the Maize Board would subsequently set the producer price of
maize annually on the basis and assumption that it had to be to the long-term
benefit of the producers, that price signals had to be released before the planting
season, and that maize would not be exported at a loss again. This also included
that the Maize Board was not entitled to borrow money in order to pay producers
higher prices that could be earned from the market. The agreement involved the
establishment of a single-channel pooled system for the marketing of maize, in
terms of which the producer price was merely the result of a pooling of the Maize
Board’s net income from sales – locally as well as from imports.
The changed system meant that the Maize Board would make a projection of the
market over the next twelve months and calculate what result the total maize crop
in that season could be. The calculations included a margin for unforeseen events.
On the basis of this, an advance price was calculated and paid to the producers.
This changed the maize industry drastically. Producers came under more pressure
to increase productivity, which they did by reducing, among other things, inputs
like fertiliser and labour and converting marginal fields to pasture. The result was a
considerable increase in average yield, with fewer inputs. It also led to the produc-
DURING 1985 THE MINISTER
OF AGRICULTURE, MR
GREYLING WENTZEL, ON
VARIOUS OCCASIONS
MADE IT CLEAR THAT THE
CONSUMER SUBSIDY THAT
THE GOVERNMENT PAID TO
THE MAIZE BOARD WOULD
BE PHASED OUT. THIS
MEANT THAT CONSUMERS
WOULD HAVE TO ABSORB
A PART OF THE MAIZE
BOARD’S COSTS, LIKE
STORAGE, HANDLING
AND FINANCE COSTS.
The maize producers held a mass meeting at the Markotter Stadium in Klerksdorp to discuss
the situation. It was held the day after the appointment with Mr PW Botha at Tuynhuys and
the delegates reported about the meeting.