Small millers' and bakers' perceptions of the limitations of agro-processing development in the wheat-milling and baking industries in rural areas of South Africa

摘要

According to the Food Price Monitoring Committee (FPMC) (2003), milling and bakingindustries are highly concentrated, and most of the major millers are vertically integrated withbakeries. The Committee found that the baking industry is also characterised by a high level ofmarket power, with six baking groups being responsible for 80 per cent of South Africa’s breadproduction. Hence, this study aimed to identify the factors that restrict the development of agroprocessingin the small wheat-milling and baking industries in the rural areas of South Africa.Data was collected by means of a structured questionnaire and by conducting 15 interviewswith various small wheat-milling and baking firms in the supply chain as well as with majorroleplayers.The study found that the small wheat-milling and baking industries have relatively high barriersto entry, including the ability to acquire the required capital to start operations; to establish amarket; to acquire knowledge of the wheat-milling and baking industries; to uphold a wellmaintained infrastructure; to acquire marketing-management knowledge; and to have thenecessary cash flow. The only barrier to exit deemed to prevail in the wheat-milling and bakingindustries is the ability to sell machinery at book value. The study also found that small-scalewheat millers and bakers felt exposed to wheat price volatility, as they had neither the cash flownor the knowledge to counteract these price risks by way of risk-mitigating strategies availablethrough derivative markets.The study therefore concluded that large-scale wheat millers and bakers have a competitiveadvantage over their smaller counterparts, in that they have the economies of scale, necessaryskills, knowledge and cash flow to overcome obstacles in a short period. Moreover, smallerwheat millers and bakers can take several months to recover from setbacks, which sometimesprove to be detrimental. The study further made some recommendations concerning these factors, in order to facilitate small-scale wheat millers’ and bakers’ development and expansionof production.