A JOURNEY THROUGH TIME

THE

GRAIN AND OILSEED INDUSTRY

OF SOUTH AFRICA – A JOURNEY THROUGH TIME

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setting prices without taking all the factors determining supply and demand into

account could promote surplus production. The Commission further believed that

the existing problems in the industry had to be solved through trade, and recom-

mended that an advisory council be appointed to advise the Minister of Agriculture

on matters pertaining to the maize industry.

Statutory control introduced

Despite the strong stance that the Commission took against interference in the

free-market system, the Minister of Agriculture in due course maintained that it

would be wise to establish permanent and specialised control boards with greater

powers so that they could play a stabilising role with respect to prices and the

management of supplies. In addition to increasing pressure for control from the

ranks of producers, factors like the desperate financial position of producers, sharp

price fluctuations and the stabilising effect that limited government involvement

had in the marketing of butter, cheese, tobacco and wine apparently influenced

the Minister of Agriculture’s view. In addition, leaders started to accept that South

African producers had the first right to the domestic market and were entitled to

stable, lucrative prices.

It does not seem as if all the co-operatives at the time supported the idea of con-

trolled marketing, and some economists maintained that the financial resources

required in agriculture could be used more profitably by other sectors like the

mining industry. Others believed that agriculture had to be developed in order to

contribute to the long-term sustainability of the South African economy.

The government started subsidising the exporting of grain products from the end

of 1931, and essentially this was the start of grain price control in South Africa.

Various other developments in the maize and wheat industry also pointed to this,

as will become clear later in this chapter.

In spite of the criticism and opposition, and also in emulation of measures introduced

by other countries to neutralise the consequences of the great drought in the

USA, Australia and Africa and the worldwide depression of 1932/1933, Parliament

eventually passed a Marketing Act, Act 26 of 1937, which paved the way for single-

channel marketing. This was an enabling act that made provision for the introduction

of a National Marketing Council and for the creation of schemes to control the produc-

tion and marketing of agricultural products and functioning under the protection of the

Act. It affected virtually all the branches of agriculture in South Africa to a greater or

lesser extent.

The act that established single channel

marketing.

Grading of maize.