Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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The 2010 Agriculture Policy
In 2010 the Department of Agriculture, Forestry, and Fisheries issued a new policy document,
whose purpose it was to help make South African agriculture more globally competitive.
It enshrined liberal principles of non-intervention in markets except to correct market failures
or imbalances.
The underlying principles for the policy were:
1. Government intervention in agricultural market should be limited to the correction of
market imperfections and socially unacceptable effects.
2. Government intervention in agricultural market should prioritize targeted non-
market mechanisms over correction of socially unacceptable conditions.
3. Government intervention in agricultural market should allow for export market
arrangements which enhance the welfare of the nation as a whole.
These principles informed a set of policy objectives, which in turn led to a set of policy
interventions and mechanisms.
The policy objectives were to:
1. Promote competitiveness in agricultural markets;
2. Create a strong linkage between primary producers and markets;
3. Foster participation and success of smallholder farmers in the agricultural economy;
4. Promote market in value-added agricultural products;
5. Provide a common understanding and directives within Government and its
institutions and the agriculture industry of agricultural market policy and the
application and implementation of policy instruments;
6. Provide strategic policy direction that can form part of Government’s plans of action
and that can be reviewed and monitored to measure progress;
7. Provide broad direction on how agricultural market can contribute to the growth
objectives of the Government.
The policy interventions and instruments that followed from these objectives were:
1. Competition and pricing policy - With deregulation of market arrangements for
most, there was a danger that the potential benefits of deregulation could be
counteracted by market concentrations that were nurtured by the former control
board system. In ordinary circumstances, ordinary duties shall be applied, which are
limited by negotiated agreements and obligations enshrined in the WTO. The tariff
equivalents set through the process of complying with the WTO commitments
represent the maximum level of tariff that can be levied, and these are bound against
an increase. WTO rules also require that the bound tariff levels must be reduced by
specified percentages over the periods indicated in the agreements. As a matter of
policy, ordinary duties will be constantly reviewed in collaboration with the private
sector to ensure that tariff levels applied are consistent with the stated policy
objectives of making agriculture efficient and competitive.