This report describes the deregulation of statutory marketing boards in Israel, South Africa and Argentina.

In Israel the Citrus Marketing Board was deregulated in 1991. In South Africa all the boards were abolished by January 1998 following legislation enacted in 1996. In Argentina the Wheat Board was abolished in 1991.

The deregulation in all three countries followed both sectoral and economy wide problems.

In Israel the citrus industry had been in decline for more than a decade before the reforms. In South Africa the whole agriculture sector was severely distorted by regulation prior to the reform and in Argentina there also had been a decade of decline. In both Israel and Argentina the reforms can be seen as being part of a larger economic reform programme. In South Africa the reforms can be seen as part of the post-apartheid reforms

In Israel the reforms have enhanced the performance of the citrus industry.

The reforms in Israel have resulted in a greater percentage of citrus production exported, the decline of low value industrial usage, more direct marketing to retailers, more precise pooling of fruit and greater efficiency in transport and logistics. Most industry participants believe the current arrangements are better than the previous arrangements.

Despite the benefits of the reforms in Israel the Israeli experience is not a good model for other countries.

The major problem with the Israeli reforms is that the underlying marketing legislation has not been changed. This leaves potential for policy regression. Further, the current arrangements mean there is a lack of transparency in the operations of the Citrus Marketing Board which creates grower and investor uncertainty.

In South Africa the reforms have initiated a surge of entreprenurial activity which is expected to reinvigorate South African agriculture.

The reforms in South Africa have generated substantial activity by incumbent firms seeking to maintain market share whilst new firms have emerged seeking to obtain market share. Both the new firms and the existing firms argue that reform has improved performance by incumbents. The new firms are diverse and are pursuing a wide range of investment options.

The reforms in South Africa have in many ways been a text book model of carefully considered action.

The reforms in South Africa made transparent the rationale for the policy. Government provided the framework and allowed individual sectors to choose their own course of action within the policy framework. A timeline for deregulation was put in place and a National Agricultural Marketing Council (representing interested parties defined in the legislation) was established to facilitate the transition.

In Argentina the reforms have revitalised the wheat industry

Since the reforms in Argentina there has been substantial investment in infrastructure and as a result transport costs have declined significantly. Wheat production has expanded in the face of the decreased costs, greater market opportunities and the now stable macroeconomic conditions.

These three cases all show benefits from the reform though the magnitude of the benefits is hard to estimate due to changes in other policies and changes in market conditions

The reforms have shown that in all three countries the removal of single desk selling arrangements did not harm the agricultural export industries. In all cases benefits were achieved but the benefits were partly due to improved economic policy independent of the decisions pertaining to boards. It is arguable that some of the gains could have been made without the abolition of boards.

The three cases all show the importance of governments being clear and consistent about their policy goals.

In Israel the government was decisive but the initial changes were a surprise. Further, some other interventions and the lack of transparency in the legislation governing the board hinders the achievement of efficient citrus marketing. In South Africa the government’s clear direction, realistic implementation timeline, and supportive National Agricultural Marketing Council has facilitated success. In Argentina the marketing reforms were helped by the economy wide reform process.