Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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2. Agricultural tariff policy - On both international and local markets, South African
farmers have to compete not only with farmers in other countries, but in many cases
with those farmers backed by market-distorting interventions their Governments use
to protect their agricultural sectors. The Department of Agriculture, Forestry and
Fisheries shall work with the Department of Trade and Industry (DTI) to design
agriculturally defined guidelines on the use of anti-dumping, safeguards and
countervailing duties. Such systems will not be burdensome, but predictable and able
to respond swiftly to problems that arise.
3. Agricultural market access facilitation - While an enabling trade-policy
environment is a critical element of an export-led growth strategy, the increased level
of competition in the global economy demands that Governments design measures to
improve the competitive edge of their own producers. The Government will, in
consultation with the private sector, therefore use non-trade-distorting mechanisms to
assist in providing an environment conducive to export growth.
4. Agricultural market information - The Government recognizes that there may be
incomplete markets in areas where smallholder farmers are located. This results from,
among other things, unequal access to market information. The Government will
ensure that appropriate institutional arrangements and systems are established and
maintained for collecting, analyzing and disseminating agricultural market
information to smallholder farmers. The focus will be on information enabling
smallholder farmers to make better decisions regarding what to produce, when to
harvest and sell and where to sell.
5. Agricultural market infrastructure and agro-logistics - Transaction costs are often
high for smallholder farmers in most rural areas of South Africa where there are no
feeder roads. The Government will therefore develop a transport infrastructure that
will permit low-cost and reliable movement of freight. Additionally, the Department of
Agriculture, Forestry and Fisheries shall lobby the existing transport infrastructure
set-up to accommodate the needs of the agricultural sector. The Government shall
facilitate the development of alternative institutions that will break down barriers to
participation. It may also reduce transaction costs through the provision of infra-
structure, information, training and research.
6. Commodity groups and agricultural market cooperatives - Since deregulation,
many agricultural industries, especially commercial farmers, organized themselves
into successful commodity associations. The core task of these commodity
organizations is to inform, train and empower producers, and make market
information available. In some cases, this information is expensive and can only be
afforded by certain agricultural participants. The Government shall support the
formation of fully representative commodity associations among these smallholder
farmers and support their future integration with the existing commodity associations
for the future. The Government will also promote and encourage group market
systems or collective actions by smallholder farmers to aggregate their produce and
increase their bargaining power in negotiations with transporters.
7. Agricultural market skills and capacity building -The Department will implement
an agricultural market skills and capacity building program in partnership with the