Ringing the changes in South African agribusiness

The "joint cautionary announcement" that Senwes and NWK Holdings are negotiating a merger is significant news indeed.

In the last century, agricultural co-operatives established commercial agriculture in South Africa. The changes introduced in 1994 went beyond the political, moving the economy away from a protected environment to being one of the freest in the world (no subsidies here!) This has seen the number of commercial farmers drastically reduced over the years until, it is estimated, we now have around 30 000 left.

Agricultural co-operatives changed and in almost all cases converted to being companies. Moving away from the farmer-owned model that existed previously, the stronger ones absorbed the smaller ones leaving a handful of role players of national (and international) significance. The proposed merger of two of these changes the agribusiness landscape in the country.

The history of agribusiness is traced in the agribusiness chapter in The Agri Handbook.

Subsequent to 1994, the co-operative model is held up as a tool to establish -- this time -- black small scale farmers  and other businesses. Read about this the chapter on co-operatives.

Co-operatives help people to help themselves

There is little appreciation for the importance, significance and potential of the co-operatives model in South Africa, Dr Rob Davies told an audience in Durban over the weekend. Addressing the International Cooperatives Day event, the Minister of Trade & Industry spoke again of additional measures in the pipeline to boost this vehicle (co-operatives) as a way to empower people.

Co-operative support institutions being developed are:

• the Cooperatives Development Agency, to provide financial and non-financial support
• the Cooperatives Academy to provide education and training and 
• the Cooperatives Tribunal to help co-operatives to resolve internal conflicts.

Co-operatives made the world of difference to South African commercial agriculture in the previous century. Co-operatives help people to help themselves, and we should welcome every effort to strengthen this business model. 

Co-operatives is one of the nearly 180 chapters in The Agri Handbook.