Too much regulation?

Some pundits maintain that our fresh produce markets are over-regulated. I confess that I cannot make up my mind on the issue.

- Advertisement -

Take Act 12 of 1992 as an example. A market agent represents a farmer on the market floor and the act is there to protect the fiduciary interests of that farmer. This is normal practice in business around the world where one party acts on behalf of another. But for some strange reason, it does not apply to farming anywhere – except in South Africa!

The protection that Act 12 affords a farmer in this country is unique and the envy of farmers everywhere. Look into the act in more detail and you’ll find that the clauses seem to cover almost every ‘loophole’ that might exist.

Legal jargon
Despite the obvious advantages of Act 12, a few decisions handed down after disciplinary hearings have left some of us aghast. The discussion afterwards is always the same: “But the act says…, so how did he get off so lightly?” Market agents might not be legal eagles, but they work cheek by jowl and have a pretty good idea when another agent is up to no good. The evidence, as far as they are concerned, is there for all to see.

- Advertisement -

“Yes, but in this case…” the lawyers reply, and start explaining some subtle legal point. By the time they’re finished, most market agents are lost in a sea of jargon, so they just sigh and go back to selling potatoes, muttering about the markets being over-regulated. Some even threaten to leave the market and continue trading on the ‘outside’, where regulations are seemingly not so severe.

Enjoy the protection
These market agents have a point, because those who do trade outside the markets enjoy more freedom from regulations. Act 12 applies only to registered market agents. This creates an uneven playing field, of course, and it’s the price we pay for operating in a free market. In principle, anyone can do his own thing – within the law. The problem is there’s a lot more ‘law’ for registered market agents than for the others.

But there’s the upside: a farmer supplying a registered market agent enjoys the protection of Act 12 which he will not get outside of the market.