3 / 37
ႅ
CHAPTER 2
Bag stacking.
For about 25 years after the establishment of co-operatives gained momentum,
producers’ grain was marketed mainly by the co-operatives. In the historical
records of some of the co-operatives of that time one reads of problems because
of droughts, failed crops, unstable prices, problems caused by the importing of
grain products and the sale of grain outside the co-operatives, and other practical
problems that the grain industry experienced.
The government hoped that the co-operative movement would contribute to the
stabilising of the grain market through the organised marketing of its members’
products. However, for various reasons – some of which reappeared again a few
decades later in the freemarket – this did not happen. Producers received production
credit from the co-operatives, for example, but then did not deliver the crop to the
co-operatives to repay the debt.
In normal times the system did work relatively well, but during the Great Depression
of the early 1930s it came under serious pressure. Prices dropped, and in the case
of maize co-operatives they were forced to purchase more maize themselves – so
much so that co-operatives were handling roughly 60% of the maize that was
marketed in 1933. In times of surplus this led to an increase in the domestic price
of maize, as surpluses had to be exported at a loss and the domestic price had to
help support the export losses.
These and other problems probably led to the establishment of the
Centraal
Agentschap
(Central Agency) with a view to, among other things, reducing
competition among the co-operatives, particularly with respect to themarketing of
grain. Not much information is available on that organisation, but it was probably
a type of central co-operative and was liquidated in 1935, which indicates that it
was not very successful in solving the problems at that time.
Even before the
Centraal Agentschap
was liquidated, certain of the co-operatives
decided to request theestablishment of a statutory single-channelmarketing system
for grain. On the basis of this request a Commission of Inquiry into Co-operation
and Agricultural Credit was appointed in 1934 with Dr PR Viljoen, the Secretary of
Agriculture, as Chairperson. The aim of the Commission was, among other things,
to determine the role of co-operatives in the marketing of agricultural products.
The Commission took a strong stand against the establishment of any form of
statutory single-channel marketing, as this would inevitably lead to setting prices
at higher levels than market factors would justify. The Commission maintained that
Graph 3: Farms in South Africa, 1910 and 2007
150 000
100 000
50 000
0
R/ha
1910
2007
Number of farms
Total hectares (thousand)
Graph 1: 1910 – Agriculture’s contribution
to total GDP for South Africa
Graph 2: 1910 – Percentage contribution to
agriculture GDP in South Africa
Other
Livestock
Agriculture
Agronomy
Horticulture
81%
55%
9%
19%
36%
An old threshing machine.