The land question in smallholder development in South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 186

who had been excluded from the mainstream of the country's agricultural economy over a
long time. The literature makes clear distinctions between the old regime of controls and
the new marketing policies (Table 9.1).

From the standpoint of modelling an asset or commodity markets, the significance of
deregulation of the agricultural sector rests largely in the new institutions that arise from
such a policy development and influence the length of the marketing channel one way or
the other, and invariably affect marketing as well as other transactions costs. Ruijis (2002)
has examined these outcomes in respect of cereals marketing in West Africa. But a common
theoretical thread can be found within the broad field of institutional economics (North,
1989 and 1991; North and Wallis, 1994; and Eicher, 1999, among others).

The fact that this element is often taken as given provides strong justification to examine
it explicitly at this point. The academic and development literature is replete with the

Table 9.1. Distinctions between the Marketing Act of 1968 and the Marketing of Agricultural Products Act
of 1996 (Van Schalkwyk et al ., 2003).

1968 1996

Interventionist system Market deregulation
Increased productivity Increased marketing efficiency
Reduction of marketing margins Optimum export earnings
Increased consumption and food self-sufficiency Food security at household level
Maximum commercial producers on land More emphasis on small-scale farmers
Economic farming units; minimum farm size Increased sustainability of agriculture
Non-participative and bureaucratic introduction of intervention Participative, transparent and all-inclusive
Stabilizing product prices

Producers must themselves stabilize income

Intervention inclusive of single channel; pools, surplus
removal, fixed prices, quotas; price support; promotion;
general and special levies, registration, records and returns.

Limited to levies; export control; pools; registration;
records and returns

Requested by producers or introduced by Minister Requested by any directly affected group of persons

or firms

Consultation not always necessary although certain quantified
producer support required

Consultation process prescribed by Act inclusive of all
directly affected groups

No political process to approve levies apart from Minister Levies need to be approved by both parliamentary

portfolio committees and the Minister

No maximum period and no interim testing of intervention All statutory measures to be introduced for fixed

period and tested at least every two years