Changing Governance Structures in South African Agribusiness

Abstract

This article examines the changing governance structures in the South African agri-food sector. Changing legislative and market conditions forced agribusiness managers to rethink their governance structures to ensure the competitiveness of the agri-food sector. They had to adapt to the new structures in a relatively short time. Three case studies of different levels of coordination between firms are presented. The analysis indicates a move away from spot markets to managed coordination structures in response to the deregulation of South African agricultural policy.

Agricultural land valuation methods used by financiers: The case of South Africa

“…Other changes in the sector over the past two decades include i) the South African government launching a three-component Land Reform Programme (LRP) with the aim to distribute 30% of the country's agricultural land from white landowners to black people (Mearns, 2011;Valente, 2009); ii) sharp increases in the prices of key farming inputs, particularly diesel and electricity (Hall, 2012;Marus, 2008); and iii) a lesser amount of government support with the closure of the Agricultural Credit Board (Doyer et al, 2008;Marus, 2008). The results of all these changes are that South African producers are less inclined to remain in the industry as the environment is becoming increasingly difficult.…”

Case Studies of Emerging Farmers and Agribusinesses in South Africa

“…They also benefited from the collective use of these assets as well as collective buying and selling practices in order to create skill advantages and cost reduction practices (Doyer, 2002;Cook and Lliopoulos, 2000). This collective buying and use of assets is not unique to South Africa and owing to overproduction and shrinking profit margins, there is a worldwide trend towards such "new generation" co-operative models linking primary to secondary agriculture with producer members supplying primary product to the processing infrastructure, of which they are the collective owners (Cook, 1995).…”

Case Studies of Emerging Farmers and Agribusinesses in South Africa

“…The empowerment business model Historically, commercial farmers accumulated assets such as those embodied in the SRCC as part of their productive process. They also benefited from the collective use of these assets as well as collective buying and selling practices in order to create skill advantages and cost reduction practices (Doyer, 2002;Cook and Lliopoulos, 2000). This collective buying and use of assets is not unique to South Africa and owing to overproduction and shrinking profit margins, there is a worldwide trend towards such "new generation" co-operative models linking primary to secondary agriculture with producer members supplying primary product to the processing infrastructure, of which they are the collective owners (Cook, 1995).…”