A Review of the Maize Situation in the Union of South Africa¶

Literature › Works

W. J. Lamont (1931). A Review of the Maize Situation in the Union of South Africa. Department of Agriculture Bulletin No. 101, Economic Series No. 15. Government Printer, Pretoria.


Type	report
Scope	Economics and economic history of apartheid
Method	policy analysis
Period studied	1922–1931
Regions	Union of South Africa, Transvaal, Orange Free State, Natal, Cape, Argentina, United States, Danubian States
Themes	agriculture land, business and state, comparative theory, methods data sources
Citation key	`lamont1931`

Argument¶

Lamont, Chief of the Division of Economics and Markets, surveys the Union's maize position during the early Depression price collapse. He argues that the Union is a marginal exporter in a world market of rising supply and falling European demand, so that overseas prices leave exporting uneconomic. He reviews voluntary co-operative marketing and judges it sound but still handling only a small share of the crop. Drawing on Neethling's Free State farm survey, he argues that farm incomes depend on yield per morgen and on better integration of maize with livestock. He opposes export bounties, price fixing, stabilization and compulsory co-operative pooling, citing the failure of such schemes abroad (notably the US Federal Farm Board) and the burden they would place on Union consumers.

Evidence and method¶

Union production, export and price series for 1924-1931 (including monthly Grade 2 prices); International Institute of Agriculture (Rome) world production and trade figures for 1922-1929; production, surplus and export tables for the US, Argentina and the Danubian States; co-operative society membership, turnover, pool prices and balance-sheet data; Neethling's 1927-28 survey of 109 farms in the north-eastern Orange Free State (Bulletin No. 81); press and Federal Farm Board reports on US stabilization.

Place in the debates¶

Compulsory co-operative pooling, price fixing and stabilization of maize vs free or voluntary marketing (see Agricultural policy, productivity, farm size and land reform). Opposes compulsory control, price fixing, export subsidy and stabilization as unsound and likely to stimulate overproduction. Accepts voluntary co-operatives as legitimate and beneficial.
Who should bear the cost of a payable maize price (consumer cross-subsidy of exports) (see Agricultural policy, productivity, farm size and land reform). Argues that making Union consumers cover export losses would act as a tax on all maize users and would restrict domestic use, including for livestock feeding.
Maize monoculture vs mixed farming on the highveld (see Agricultural policy, productivity, farm size and land reform). Argues for adjusting maize output to the farm's other enterprises, namely cattle, sheep, pigs and poultry, rather than expanding the one-crop system.

Findings¶

Maize production was highly concentrated in the Transvaal-Free State 'maize triangle' on white-owned farms. (p. 3)

The Transvaal and Orange Free State provinces together produce on an average 82.3 per cent. of the total maize annually grown in the Union on European farms.
At depressed 1931 world prices, exporting maize was barely viable for the Union. (p. 4)

At present ruling priees the Union can hardly afford, and is not likely, to export maize unless forced to do so.
European importers had expanded their own production, shrinking demand for overseas maize. (p. 6)

Eurovean countries have meanwhile developed their own primary industries to such an extent that they are finding great difficulty in
Argentine yields far exceeded Union yields, so Argentina was a low-cost competitor for export markets. (p. 12)

Argentina's average yields approximates 19 bags per morgen.
Eighteen co-operative maize selling societies existed, but they handled only a small share of the Transvaal and Free State crop. (p. 11)

There are at the present moment 18 co-operative maize selling organizations registered in the Union
Lamont sees competition among farmers as self-defeating and is sympathetic to voluntary co-operative marketing. (p. 14)

It is, moreover, a suicidal policy for farmers to compete against each other when such competition will inevitably lead to reduced prices.
The Neethling farm survey covered 109 large farms of the north-eastern Free State. (p. 14)

The number of farms surveyed was 109, comprising in all 95,979 morgen of farm land
Farms were capital-intensive, with land the dominant component of the average capital outlay. (p. 16)

The average capital outlay per farm as shown above was £10,494, distributed as follows:-
Farm profitability turned on yield per morgen rather than on costs of production. (p. 17)

but the farmer's income is very seriously affected by the yield per morgen
Past price-control and stabilization schemes abroad followed a common pattern of initial price gains and then collapse. (p. 18)

In the early stages there has heen an appreciable improvement in prices
Such schemes have almost always failed because production outran demand at the supported price. (p. 20)

they have almost without exception failed because of their inability to prevent production at the stabilized price

Evidence ledger¶

Sources used¶

Source	Kind	Period	How used
Union maize production, export and retained-for-consumption statistics 1924-25 to 1929-30 (Table I)	official statistical series	1924-25 to 1929-30	Shows that Union maize consumption is stationary at about 12 million bags while exports swing widely, so surplus must go overseas.
Provincial and district shares of maize production (10-year averages, European farms)	official statistical series	10-year average, unspecified years	Establishes the concentration of maize production in the 'maize triangle' and the districts served by elevators.
Argentine production, area, yield and export series (Table V)	international trade or finance data	1923-1930	Used to compare Argentine and Union yields and net returns per morgen.
Department of Agriculture Bulletin No. 81, An Economic Investigation of Farms in the Maize Districts of the Orange Free State (J. C. Neethling), farm survey of 109 farms	author survey or fieldwork	1927-28 crop year	Source of farm organization, capital, receipts, costs and yield-profit relationships in the chapter on the economics of maize production.
Act No. 38 of 1925, Section 17 (compulsory single-channel sale of maize)	legislation gazette	1925	Legal basis for the proposed compulsory co-operative marketing discussed in Chapters II and IV.

Inference¶

Quantification: Descriptive tables.

Descriptive and policy-argument bulletin: it uses time-series tables of Union production, exports and prices, cross-country comparisons of maize producers and exporters, a one-year farm survey, and hypothetical arithmetic scenarios. Historical analogy with foreign price-stabilization schemes (US Federal Farm Board, rubber, coffee and others) supports the conclusion against compulsory control.

Key claims¶

Claim	Basis	Strength
Maize production is concentrated in the Transvaal and Orange Free State 'maize triangle', which supplies the great majority of the commercial crop on European farms. (p. 3)	10-year average district production percentages from Department of Agriculture statistics (European farms only).	Systematic data
Argentina, as the main export-oriented grower, with higher yields and lower costs, can undercut Union producers, and its net return per morgen is far above the Union's. (p. 12)	Table V Argentine yields, with a constructed calculation of net returns per morgen; the author admits exact cost data are unavailable.	Partial data
Maize farm profitability depends heavily on yield per morgen, and the most successful farms rely more on maize while livestock enterprises are less efficient earners. (p. 19)	Neethling's 1927-28 survey of 109 OFS farms, grouped by size and yield.	Partial data

The author's caveats¶

The author notes that the farm survey covered one year only (1927-28, when prices were much higher than in 1931) and that a fuller report is in preparation. He also says exact production costs for Argentina and the Union are unavailable, and that market prices are averages of weekly highest quotations, not weighted averages, so comparison with co-operative pool prices understates the latter.

Gaps in the evidence¶

The argument against compulsory control rests on analogy and hypothetical arithmetic rather than cost or elasticity data. It would need multi-year farm cost data across regions (including native-grown maize and non-triangle areas), demand elasticities for domestic and feed use, and systematic evidence on the Federal Farm Board and other schemes. Some of this existed in the Department's own farm records and trade statistics; Neethling's fuller multi-year report was forthcoming, and archival and cost-of-production data survive today.

Replicability: Data poorly documented.