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CHAPTER 2
BY 1976 THERE WERE 23
MARKETING BOARDS,
WHICH CONTROLLED
MORE THAN 90%
OF SOUTH AFRICA’S
AGRICULTURAL OUTPUTS,
INCLUDING THE RED-
MEAT INDUSTRY. THE
MARKETING ACT WAS
AT ONE STAGE CALLED
THE MAGNA CARTA OF
AGRICULTURE IN
SOUTH AFRICA.
The main objectives of this Act, as well as of the act that later replaced it, were to
promote steadiness in the price of agricultural products, increase productivity in
the farming industry and improve the effectiveness of the marketing, processing
and distribution of agricultural products.
Different control boards were introduced for the different agricultural products.
The individual control boards developed schemes for the products under their
control and submitted these to the National Marketing Council. The National
Marketing Council then considered the scheme, or proposals for amending existing
schemes, and submitted recommendations to the Minister of Agriculture, who
made the final decisions in this regard.
The first Marketing Act was replaced by a new Marketing Act (Act 59 of 1968) in
1968, and it mainly represented a consolidation of various amendments made to
the 1937 Act in the course of time. The 1968 Act remained in effect until it was
revoked on 1 January 1997 by the Marketing of Agricultural Products Act, Act 47
of 1996. This was the end of controlled marketing and the beginning of the
free-market system for agricultural products.
Role and functions of control boards
The control boards operated price schemes that varied from single-channel fixed-
price schemes and single-channel pooled schemes to surplus-removal schemes.
The majority of the members of the marketing councils were producers, but they also
included representatives of other interest groups like consumers and processors.
In the opinion of the government, the main aims of the Marketing Act were
to establish a more streamlined and orderly agricultural environment, thus
promoting greater stability in the prices of agricultural products and reducing
the gap between the producer price and the consumer price by way of ration-
alisation. The intention was to increase the productivity of the agricultural
industry and the effectiveness of the associated industries through marketing
schemes that were developed according to the specific needs of the different
products. In this dispensation the functions of price fixing and price risk man-
agement were carried out by a panel of experts who used the information and
powers at their disposal to fix prices with a view to promoting the objective of
ensuring greater stability in agriculture.
However, producers complained from the start that prices were not fixed high
enough to ensure the survival of the poorer producers, and that only large
producers who were able to increase their production benefited from them.
Using their political influence, the producers managed to acquire greater control
of the marketing system than envisaged by the officials who had supported
the establishment of control boards. In contrast, economists and opponents of
controlled marketing felt that producer prices were generally set much higher
than market value, which led to ineffectiveness and unproductive practices.
Despite the resistance and criticism, control boards for the agricultural industry in
South Africa continued to exist for some 60 years.
THE CONTROL BOARDS IN THE GRAIN INDUSTRY
The first control boards that functioned under the Act were the Maize Board and
the Wheat Board. The role and functions of the control boards were essentially
the same for the different products placed under their control. The main role
was probably the setting of and control over prices. However, the Boards did not
set the prices themselves. They submitted proposals to the National Marketing
Council, which then made a recommendation to the Minister of Agriculture.
The National Marketing Council was composed of civil servants, and according
to the report of the Kassier Committee they were not always neutral. This would
mean that prices could not always be justified in economic terms. In the end, the
Minister decided on the prices, which on various occasions led to great dissatis-
faction among maize producers in particular, as the Minister refused to accept the
producer prices as proposed by the Maize Board.