industries in South Africa and <strong>GM</strong> labellingremains unenforced.During this period, acting as a consumerwatchdog, the ACB has submitted severalmaize based food items for <strong>GM</strong>O testing,all of which recorded very high levels of <strong>GM</strong>content. The revelation that several popularbrands of baby food were packed with <strong>GM</strong>maize and soya proved particularly damaging,forcing some of the largest food processorson the market, including Nestle and, after aninitial period of intransigence, Tiger Brands, topledge to go <strong>GM</strong> free. However, the major foodcompanies have so far refused to countenancea <strong>GM</strong> free alternative for maize meal, the staplefood of millions of South Africans, includingfamilies for which branded <strong>GM</strong>-free baby foodsand formulas remain a prohibitively expensiveluxury.With this in mind, the ACB decided to focusin its latest round of <strong>GM</strong> testing exclusivelyon the most popular brands of maize mealin South Africa. The results indicate what wehad long suspected, that the South Africanmaize value chain is completely saturatedwith <strong>GM</strong>, robbing millions of South Africansof the freedom to choose what to eat. In sucha scenario, a labelling system does nothing toalleviate this; it is like the sham election whereeverybody knows the winner before the firstballot is even cast.<strong>Maize</strong> meal brandImpala <strong>Maize</strong> mealAce super maize mealNyala super maize mealWhite Star super maizemealPremier Course Braai PapWoolworths super maizemealIwisa super maize meal<strong>GM</strong> content66% <strong>GM</strong> maize78% <strong>GM</strong> maize87% <strong>GM</strong> maize72% <strong>GM</strong> maize55% <strong>GM</strong> maize79% <strong>GM</strong> maize81% <strong>GM</strong> maizeThis briefing will go on to show how these,and other companies operating the length andbreadth of the maize supply chain, emergedlargely from the mining boom of the latenineteenth century and firmly establishedthemselves under the apartheid government.During and after the transition to democracythey have been unleashed on unsuspectingSouth African consumers as fully-fledgedmodern agri-business companies who continueto dominate the milling sector, have fixedthe price of bread and maize meal, and haveworked in concert with the biotech industry tostifle the <strong>GM</strong> food labelling laws.Last but not least, this model of industrialagriculture is being punted as the meansto deliver millions of Africans from povertyand hunger. This briefiing illustrates that thecurrent system is doing neither, but merelyperpetuating centuries old inequalities thathave wracked the continent.EXECUTIVESUMMARY<strong>Maize</strong>, literally translated as ‘that whichsustains life’ by the Aztecs and Incas, is saidto have first been domesticated some 7,000years ago in central Mexico. It was introducedto Africa some 500 years ago, though itwould take another 200 years to becomefirmly established in southern Africa. Onceestablished in what is now South Africa, maize(the word itself is thought to derive fromthe Portuguese milho) was widely used as avegetable crop to alleviate hunger during thelong cropping seasons for sorghum, which wasthe staple at the time.The status of maize in South Africa wouldchange forever with the discovery ofdiamonds at Kimberly in 1867, and gold on theWitwatersrand in 1886, metamorphasisingmaize into the grain that fed the thousandsof migrant miners who flocked to the mineralfields from all over the sub-continent. Thisnewly urbanising population began toconsume maize as ‘mealie’ flour, rather than inits milky stage porridge, as had been the normup until then. New varieties of maize seed,‘dents’, were imported from America, which,in addition to out-yielding the traditional flintvarieties, produced a soft starch, favouredby the new mechanised techniques beingemployed by the milling industry.<strong>GM</strong> <strong>Maize</strong>: Lessons for Africa 5
Following the Act of Union of 1910, whitecommercial agriculture’s position in SouthAfrica was consolidated through legislation,such as the 1913 Native Land Act, the 1939Co-operative Societies Act and the MieleControl Act of 1935, culminating in the 1937Marketing Act, which ‘became the cornerstoneof commercial agricultural policy’. 2 During thisperiod the three major white maize millers oftoday, Tiger brands, Premier Foods and PioneerFoods, had all firmly established themselves.From the 1960s to the 1980s the commercialseed industry underwent a period of ‘maturity’,consolidating around Pannar, Sensako, Asgrow,Ciba-Geigy, Saffola and Cargill Hybrid Seeds.Beginning in the late 1970s, due to changes inthe financial sector, South African agriculturestarted to undergo profound changes. Pieceby piece, old legislation and state support foragriculture was chipped away until, by themid-1990s, virtually all of the nation’s formeragricultural co-ops were privatised, state pricecontrols had been removed and agriculturalproduce (including maize) was being traded onthe Johannesburg Stock Exchange (JSE).Today, maize is still South Africa’s staple food.With the removal of price support for farmers,the cultivated area has shifted in a generalnorth-easterly direction, towards areas ofhigher agronomic potential, and consolidatedto an average area (over the last decade) ofaround 2.6 million ha. Together with continuedimprovements through conventional breedingand farming techniques, and an increased areaunder irrigation, average maize yields haveimproved up until the present, and ensuredthat maize surpluses are usually produced(though, as will be explained later, increasedproduction is no guarantee of equitable access).The liberalisation of agriculture in South Africahas resulted in an extremely concentratedmaize value chain: two companies (Monsantoand Pioneer Hi-Bred) now control the domesticseed market; maize handling and storage isdominated by three companies (Senwes, NWKand Afgri, all former co-ops); Louis Dreyfusand Cargill, two of the four so-called ‘ABCD’group of international grain traders, dominatethe maize trade on the JSE. The white maizemilling sector, which is the focus of this paper,is dominated by three firms, Tiger Brands,Premier Foods and Pioneer Foods. This highlyconcentrated value chain feeds into an equallyconcentrated food retail sector, with four majorretailers, Shoprite/Checkers, Pick n Pay, Spar,and Woolworths dominating the market.Under the neo-liberal economic paradigm ofthe early 1990s, it was assumed that, withthe liberalisation of the maize marketingchannel, the removal of ‘inefficiencies’would lower margins in the milling industryand lead to lower food costs. However, theopposite was found to happen. In the firstfour to five years after liberalisation milling/retail margins in South Africa rose from20–40%, in stark contrast to the experiencesin neighbouring countries such as Zimbabwe,Zambia, Mozambique and Kenya, who wereundertaking similar policies at the time. Duringthe 2001/02 food price hikes, the Food PriceMonitoring Committee (FPMC) found millersand retailers, having raised their own pricesin response to maize price increases on theSouth African Futures Exchange (SAFEX), hadcontinued to sell at a higher price even afterSAFEX prices dropped.In 2009 an investigation by the CompetitionCommission revealed that, from 1999–2007,members of the so called ‘maize cartel’(including Tiger Brands, Pioneer and Premier)held numerous meetings and telephonicdiscussions in which they agreed to fix theprice of both wheat and white maize productsand to create uniform price lists for wholesale,retail and general trade customers. As a result,Pioneer foods was fined a whopping R1 billion,while Tiger, who appealed for leniency inexchange for co-operation, settled on a fineof R98 million. Statistics from the NationalAgricultural Marketing Council (NAMC) revealthat since 2009 the miller-to-retail marginfor super maize meal has actually increased,though it is difficult to attribute separatefigures for millers and retailers. With the retailfood industry being equally concentrated (andalso subject to a Competition Commissioninvestigation), clearly opportunities aboundfor profit extraction all along the maize valuechain.The maize value chain has been furthercomplicated by the introduction of geneticallymodified (<strong>GM</strong>) maize in South Africa. To date,6 AFRICAN CENTRE FOR BIOSAFETY