Address Delivered in Senate by Derek Hanekom, Minister of Agriculture and Land Affairs, on Occasion of the Second Reading Debate of the Marketing and Agricultural Products Bill
5 September 1996
President, Honourable Senators, Ladies and gentlemen
The Marketing of Agricultural Products Bill has been through quite a remarkable process. My predecessor, Dr Van Niekerk, initiated a number of investigations into the 1968 Marketing Act. It is notable that the Kassier Report, tabled at the end of 1992, was critical of both the Act itself and the schemes it provided for.
This report was followed almost immediately by the initiation of the Agricultural Marketing Policy Evaluation Committee (AMPEC) which drew on the views of the various interested bodies, such as the control boards. Consequently, the two reports produced by AMPEC were perhaps unsurprisingly, somewhat less critical of the 1968 Act.
The findings of the AMPEC formed the basis for the Marketing of Agricultural Products Bill, which initially looked remarkably similar to the 1968 Marketing Act. The draft bill drew considerable criticism, but progressed largely unchallenged to Parliament.
However, upon reaching Parliament it was challenged by the African National Congress document proposing an altogether different approach, based on a not inconsiderable amount of work done by the ANC members of the Senate and National Assembly Portfolio committees.
At the time, this particular document was slammed by various people as the dawn of the dawn of a Soviet style agricultural sector, with the centralised bureaucracy. Suffice it is to say that had those very people taken the trouble to read the ANC proposals, the original bill as tabled and the 1968 marketing Act, they would have realised how ironic their outbursts actually were.
The South African state has intervened extensively in agricultural pricing and marketing in the past. This exercise of statutory controls and the allocation of subsidies have favoured powerful interest groups such as certain larger commercial farmers, agricultural processors and the agricultural bureaucracy. The need of low-income consumers and small farmers especially in the bantustans - have been neglected, whilst employment in the agricultural sectors has declined. It is clear that the high levels of protection to producers, uniform pricing and the lack of competition in marketing has had a significant economic cost.
President, these were some of the issues that informed the debate and the processes of consultation around the draft bill. This, in the end, produced the Bill that we are debating today.
The Marketing of Agricultural Products Bill provides a very limited amount of intervention in agricultural markets. There is provision for a measure of export control and for levies to fund public goods, but only for so long as such interventions can be justified in terms of some quite demanding objectives.
The Bill provides for an open and transparent process of consultation, as well as for the oversight of any interventions that do occur in terms of this legislation. These processes - including interactions with the Department of Trade and Industry on trade and tariff matters - will operate through the National Agricultural Marketing Council, which itself will be appointed in an open and transparent manner. The Council will consist of expertise rather than vested interests, although there are plenty of opportunities for directly affected groups, including labour to have an input into the variety of processes provided for.
Honourable Senators, for too long the statutory marginalisation of marketing opportunities for small farmers was allowed to exist. This legislation would finally end this untenable situation. I must emphasise that the days of single channel marketing, of segmented (and discriminatory) markets, fixed prices and control board domination are over.
The Marketing of Agricultural Products Bill also provides for measures to ensure that individuals or organisations do not simply walk off with the very considerable asset bases that have been built up through levies by the control boards over many years. Such assets should not be dissipated, but should be maintained to provide an income flow that can be used to the benefit of all parties concerned with a particular commodity. This should include disadvantaged farmers who have been marginalised under the previous government under the previous arrangements.
President, to summarise one can say that this Bill is as much about managing the tradition to deregulated agricultural markets, as it is about providing for future market intervention.
In conclusion, I should emphasise that I am not suggesting that we should simply sit back and ignore the concentrations in various markets (for example, storage and the exportation of certain commodities) that have been built up over decades of control. It is important that we take steps to ensure a level domestic playing field. I look forward to taking initiatives through the legislation at my disposal and, in co-operation with the Minister of Trade and Industry, to ensure that there are no unreasonable concentrations of power in the marketing chain between the producer and consumer. I intend to ensure that the sector operates efficiently to the benefit of all.
President, honourable Senators - I would like to congratulate the members of the portfolio committees for the extensive work done on the legislation and, in particular, Ms Janet Love for her role in tightening up and improving the Bill. I commend the Marketing of Agricultural Products Bill to the Senate.
Thank you.