PRICE DISTORTIONS IN THE SOUTH AFRICAN MAIZE ECONOMY: A COMPARATIVE POLITICAL ANALYSIS

P. D. Wright and W. L. Nieuwoudt

Agrekon, 1993, vol. 32, issue 2

Abstract: The effects of government intervention in the South African Maize Industry are evaluated using a partial equilibrium framework. Large monetary transfers have resulted from government policy with a bias towards more powerful producer interest groups. Transfers significantly exceed the welfare gains to producers. However, the per capita gain for producers is greater than the per capita loss for consumers creating an incentive for producers to continue lobbying for the current South African maize policy. Intervention results from market failure followed by political failure where interest groups manipulate government for their own benefit. As long as vested interests remain, policy reform seems remote. A new political dispensation may shift vested interests towards consumers away from producers. Policy reform is discussed along with conditions to facilitate this process of reform.

Keywords: Crop Production/Industries; Demand and Price Analysis; Political Economy (search for similar items in EconPapers)
Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:267569

DOI: 10.22004/ag.econ.267569

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