The land question in smallholder development in South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 185

• Realization by the practitioners themselves, including farming and industry leaders, that
the control system was not sustainable.
• Dissatisfaction with the operations of the marketing boards which were expressed in a
number of legal challenges.
• Despite food self-sufficiency being achieved, the agricultural sector was performing very
poorly in terms of its contribution to national wealth (GDP) and employment growth.
• Rising domestic food prices in the 1960s which pointed to the need for market
liberalization.
The marketing control structure was also seen as mechanisms for the reinforcement of the
marginalization of the black farming population, providing high level of state support to
the cooperative sector, promoting a monopolistic paradigm, and using statutory support
to encourage the inflation of land prices (Bayley, 2000). There was also a feeling that the
government used marketing controls as a vehicle for rent seeking (Bayley, 2000).
The first hint towards liberalizing the agricultural market was the enactment of the 1968
Marketing Act (Bayley, 2000). But critics claim that the associated reforms had very little
teeth and could be easily reversed. Critics also had various problems with the management
of these early reform measures which were tagged ad hoc (Bayley, 2000). In the opinion of
several commentators (Van Schalkwyk et al. , 2003), much of the amendments made to the
earlier control Acts were merely intended to close existing loopholes in the control apparatus
and tighten government's grip even more. Producer prices of farm products began increasing
quite uncontrollably largely because input costs were also going up quite fast. According to
FAO data, rate of price increases in South Africa far exceeded what was observed in many
other developing countries of comparable levels of development (Van Schalkwyk et al. ,
2003). In the face of the deteriorating price situation, researchers (Van Schalkwyk et al.
(2003), warned of an impending financial disaster in the agricultural sector. By the mid-
1980s, the doom-day was already upon agriculture, as several farmers began to experience
far-reaching financial setbacks and insolvencies (Van Schalkwyk et al. , 2003).
The deregulation of the agricultural market came only with the establishment of pluralistic
democracy in the country. In the 1996, The Marketing of Agricultural Products Act of 1996
was passed. The purpose of the new Marketing Act relates to its four central objectives:
1. increasing market access for all South African producers who use the marketing system;
2. enhancing marketing efficiency for agricultural produce;
3. ensuring that export earnings arising from the agricultural sector are optimized; and
4. providing a basis for making agriculture more viable.
There was a clear departure from the excessive controls of the past and the a clear
commitment to use agriculture as a vehicle for broad-based development of the country and
alleviating poverty for the generality of the population, especially the black South Africans