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THE
GRAIN AND OILSEED INDUSTRY
OF SOUTH AFRICA – A JOURNEY THROUGH TIME
ႅႈ
Wheat production commenced in the winter rainfall region of the Western Cape in
the 17th century, shortly after Jan van Riebeeck settled in the Cape in 1652.
Initially the wheat industry experienced very difficult times, particularly because
the local market was restricted and it was difficult to export wheat. In the 19th
century the expansion of wheat production and the wheat industry accelerated
as the population increased. This was further facilitated by the advent of more
advanced equipment, as well as the introduction of import levies on wheat and meal
in 1826 to ensure sustained local provision.
As in the case of other crops, particularly maize, the discovery of diamonds and
gold in South Africa in the latter part of the 19th century suddenly led to a sudden
increase in the number of consumers of wheat as towns and rural centres devel-
oped. This was promoted by the development of the railways and other transport
systems, which made the transport of wheat and wheat products to the new mar-
kets cheaper and more effective, and stimulated the expansion of wheat produc-
tion to the former Orange Free State.
After the Union of South Africa came into being in 1910, wheat production received
more focus, and several reports saw the light, emphasising the necessity for cheap,
reliable food supply and the concurrent promotion of local economic development.
The reports included recommendations that the import tariff on wheat be doubled
and local production be expanded to ensure a reliable bread supply.
With the start of the First World War in 1914 South Africa produced only about 50%
of the local wheat consumption. The rest had to be imported. After the war broke
out, a shortage of tonnage limited imports and increased the shortage of wheat in
South Africa. Because of this, domestic prices increased, which made local wheat
cultivation more profitable and promoted increased production.
After an investigation into wheat supply in 1917 it was recommended that wheat
cultivation be encouraged by providing seed at cost and introducing measures to
make greater quantities of fertiliser and manure available. It was also found that
wheat cultivation in the Western Cape was unproductive and recommended that
adjustments be made. The argument was that the poor yields that were initially
obtained on large sections of poorer fields were balanced by low land prices and
adequate availability of cheap labour, but that the situation changed as the avail-
ability of labour dropped and the productivity of the poorer soils in particular
decreased because of a lack of crop rotation.
The main changes that were proposed were the establishment of a larger animal
husbandry component and more counselling and guidance to producers. Accord-
ing to the reports it was impossible for South African wheat producers to compete
against the leaders among the world’s wheat-producing countries like Canada,
Australia and Argentina without the protection of import levies and preferential
tariffs for rail transport.
However, despite expansions and developments, local wheat production was still
unable to meet the local demand, and until 1920 about 50% of the country’s wheat
consumption was imported. Import tariffs on wheat were relatively low, as was
the price of the imported wheat, which had a negative effect on local production.
Voices started to be raised for the introduction of greater protection for South
African wheat producers and millers.
The import levy on wheat was temporarily suspended from February 1920 until June
1921 because of crop failure in South Africa and high prevailing international prices.
Together with this, the preferential rail transport tariff for South African wheat was
abolished, which exposed the South African wheat producers even more to interna-
tional competition and led to agitation for higher protective levies.
Between 1921 and 1926 a dumping levy was introduced on Australian wheat,
which was replaced by a tariff increase in 1926. South African wheat prices were
consequently maintained at levels that made local wheat cultivation profitable.
In 1930 and 1931 global prices of wheat dropped further, while South African pric-
es dropped to below import parity at the beginning of the season. This led to an
increase in the import levy and the introduction of a permit system for importing
Wheat was threshed this way in the olden
days.
A wheat cutter at work.