The effects of price deregulation on maize marketing margins in South Africa

Profit efficiency of small- and medium-scale maize milling enterprises in South Africa

“…Here, reports by the Food Price Monitoring Committee (FPMC, 2003) showed that the maize milling/retail margins in the formal market have been rising in the years since market reform. This finding was also supported by a study carried out by Traub and Jayne (2004), which reported that the maize market reform has not reduced the processing and retailing margins in the maize meal supply chain. These high margins suggest that the small and medium scale maize millers (established and new) have been unable to create the desired competition in the South African maize milling industry.…”

“…According to Traub and Jayne (2004), previous studies (Mukumbu, 1994;Jayne et al, 1995;Rubey, 1995;Jayne & Jones, 1997) on the impact of maize market reform in southern and eastern Africa established that market reforms led to lower maize milling and retailing margins 2 in real terms. One of the reasons given for this reduction in these parts of Africa was that market reform opened the maize marketing system to better competition from the smallscale millers and retailers who were formerly excluded from the markets.…”

“…These high margins suggest that the small and medium scale maize millers (established and new) have been unable to create the desired competition in the South African maize milling industry. Since South Africa's economy is only moderately developed, one would expect maize milling and retailing margins to decline after deregulation of prices to levels close to, if not lower than, those of neighbouring countries, assuming there are sufficient competitive pressures (Traub & Jayne, 2004). If marketing margins have not fallen after deregulation of the maize market, this may indicate non-competitive behaviour at the stages of maize milling and retailing (Traub & Jayne, 2006).…”

Analysis of Technical Efficiency of Small Holder Maize Growing Farmers of Horo Guduru Wollega Zone, Ethiopia: A Stochastic Frontier Approach

“…This fuels the hope that closing the maize yield gap could help improve agricultural productivity and lift millions more out of poverty across SSA. The main outstanding issues that constrain maize productivity growth include (Hanjra and Culas, 2011): poor infrastructure such as roads, bridges and transport fleet and low market participation under high transactions costs (Alene et al, 2008); inadequate storage facilities (Gitonga et al, 2013), marketing policies and institutions (Dadi et al, 1992), price regulation (Traub and Jayne, 2008), market liberalization (Pinckney, 1993;Jayne and Argwings-Kodhek, 1997), and inter-regional trade issues (Myers, 2013); poor access to microcredit; past low national funding and priority given to the agriculture sector; inadequate research support for new drought-tolerant maize varieties (Byerlee and Heisey, 1996) and for integrating the crop sector with livestock; high input prices, low input use (Sheahan et al, 2013) and low maize productivity and returns (Jayne et al, 2006); challenges of public-private interventions in maize seed industry to promote growth (Langyintuo et al, 2010), poor adoption of improved maize varieties (Feleke and Zegeye, 2006;Langyintuo and Mungoma, 2008); macroeconomic instability and high inflation etc. For instance, augmenting investments in maize-vegetable crop rotations at the expense of irrigation schemes focussed singularly on maize can boost returns to investments in irrigation and reduce government's financing burdens for maize.…”

A Review of Supply Chain Prices Analyses with Emphasis on Perishable Markets

“…Traub and Jayne [27] investigated how price (de)regulation influenced the size of the marketing margins of maize ion South Africa. They found that deregulation leads to an increase in marketing margins of 20%: the authors admit their results are not supported by the literature and may prove to be disruptive of existing evidence.…”