But even when consumer prices are higher than producer prices, the difference does not cover marketing costs. Obviously, the simplest but not best way of eliminating all marketing costs would be to eliminate all marketing services. Under the present organization of society this would result in eliminating society itself. If we are to live, an irreducible minimum of marketing services must be rendered by someone.
But responsibility for performing these services might be shifted to farmers and / o r consumers. This would eliminate marketing margins but not marketing costs, which would be greater than before because of increased hand labor and other expenses associated with small-volume operations. It must be apparent almost at once that under our present civilization marketing is just as necessary as farm production.
It is, in fact, a part of production itself. For no commodity really is "produced" until it is in a form which can be used, at a place where and at a time when it is needed, and in the possession of those who will consume it. Wheat in the fields of a Free State farmer, milk in the cooler of Dairy Bell might as well never have been "produced" at all unless there is a marketing system to complete the process of production by getting the commodity into the hands of consumers wherever they may be located, in a usable form and at an appropriate time.
It would be hopeless to attempt to determine which is the most essential step in this whole chain. All are equally essential. At the subsistence level, however, marketing is not essential for the agricultural sector to survive. Commercial farming, in contrast, is responsive to demand and is characterized by the division of labor and by specialization. Such farms depend on markets not only to sell their products but also to provide the inputs necessary to produce a marketable surplus.
The welfare of South African farmers is indirectly yet intimately tied to the efficiency of South African distribution and processing system. If the surplus resulting from increased production cannot be marketed, neither the farmer nor the country will benefit.