Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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of liquidation and rescue proposals were submitted to the Land and Agriculture Minister.505
Ncera Farms Ltd recorded an accumulated deficit of US$1.70 million (R22 million) in the 2004-
05 financial year, and almost US$1.85 million (R24 million) in the subsequent financial year.506
It has been claimed the Government looks to de-register Ncera Farms Ltd. The then
Department of Agriculture financed the shortfalls.
5.5.4 Conclusions and Lessons Learned
South Africa has one of the world’s most competitive agri-food sectors. The main factors
contributing to its competitiveness are:
 Trade liberalization;
 Liberalization of agricultural markets;
 Land reform;
 Highly-developed physical infrastructure;
 Good business and investment climate;
 Access to finance;
 Quality of Government health, safety, and market development policies, regulations,
and standards, and the institutions responsible for their development and
implementation; and
 Quality and strength of private sector institutions and associations in the agri-food
sector and their influence on public policies and their provision of assistance to
farmers.
Liberalization of South Africa’s agriculture sector was accomplished deliberately and in the
context of a strong policy and institutional framework, including both public and private sector
institutions, without which liberalization would almost certainly have failed.
Liberalization of agricultural markets in South Africa, together with trade liberalization, has for
the most part been good for South Africa. Agri-food imports in 2016 amounted to US$7.01
billion, nearly 9% less than in 2012, despite a severe drought, which caused a spike in South
Africa’s imports of cereals, oilseeds, vegetable oils, and several other commodities in 2016. In
2016, South Africa had an agri-food trade surplus of US$2.51 billion, compared to just US$1.70
billion in 2012, a rise of 48%.507
Liberalization has, however, led to “a new paradigm for agricultural development,”508 in which
large-scale private investors, backed by a variety of financial instruments and institutions, has
come to dominate many agri-food subsectors through increasing vertical integration and
consolidation. “Through partnerships and contractual agreements, these actors can extend
505 News24 (2005), Flagship farm in trouble, available a
[Accessed July 2017].
506 BusinessLive (2016), Government is to deregister state-owned farm Ncera, available at
Accessed July 2017].
507 ITC Trade Map (2017), ITC Trade Map, available a and Market Access Map
[Accessed May 2017].
508 Ducastel, A. & Anseeuw, W. (2011), Le « production grabbing » et la transnationalisation de l’agriculture (sud-) africaine.
Transcontinentales, No10/11, pp. 2-5.