There was an unusual protest march to the JSE in the heart of Sandton, Johannesburg, on Thursday, 13 August, and it was not the typical one calling for the overthrow of âWhite Monopoly Capitalâ or some such thing.

Organised by industry group Grain SA, the protest was aimed at drawing attention to the JSEâs agricultural trading platforms, which the organisation says chow producer profits while inflating the prices consumers pay by adding unfair transportation costs to transactions.

The technical terminology in this tussle evokes a âsingle reference pointâ versus âmultiple reference pointsâ and it boils down to this: the âreference pointâ is milling operations in Randfontein, and the estimated cost of transportation to Randfontein is deducted from the price farmers are paid for their product regardless of their location.

The catalyst was a recent decision by the JSE regarding the âsoybean reference pointâ, but the industryâs concerns extend to maize, wheat and other commodities. Grain SA wants to maintain the multiple reference points â or milling/processing locations on the map â that were used for two years in a pilot project for soybeans.

âTo have a single-point reference is not realistic because all the grain does not come to one place and go back out to the consumers again,â Grain SA CEO Tobias Doyer told Daily Maverick as the roughly two dozen marchers gathered while a handful of bored metro cops â all such protest marches require official permission â looked on.

âSo to be fair to farmers and consumers and to give them a better deal we need to take these costs out of the supply chain, we need multiple reference points.â

Grain SA Chairperson Richard Krige said that the âsystem is skewed and itâs unfair to the two ends of the spectrum, and thatâs the producer and the consumer. For 20 years itâs been a thorn in the side of farmers.â

The soybean multiple reference two-year trial was supposed to be evaluated, and Grain SA had hoped it would be adopted more widely.

âThe idea would then be to look at rolling it out to the other commodities. Unfortunately, the JSE decided without enough due diligence... to revert back to the single reference point. But itâs taking money out of the pockets of farmers and costing the consumer at the end of the day,â Krige said.

âFor example, 60% of the wheat produced in the Western Cape is being milled and consumed there. But farmers have to forfeit R800 a tonne in transport differential costs to Randfontein in Gauteng.â

Grain SA has launched a court interdict against the JSEâs decision, and Tobias handed a petition and memorandum outside the bourse to JSE CEO Valdene Reddy.

âWe are here to engage, we are here to listen. No decision is taken lightly, and we are happy to engage,â she said.

Pointedly, Reddy did not take questions from the media, but the JSE did issue a brief statement.

âThis decision followed an extensive review of the model and careful consideration of the JSEâs obligations as a licensed exchange. The review concluded that a single reference point methodology provides the most appropriate framework to support a transparent, efficient and robust derivatives market,â the statement said.

The JSE, which among other things is supposed to foster transparency in financial markets, missed an opportunity to present the reasons behind its decision in a more transparent manner.

The issue speaks more widely to the way that futures and derivative markets for agricultural commodities are structured, and this ultimately effects your grocery bill.

Everyone needs to make money along the way â from the farmer to the retailer â and such markets are structured for contracts between sellers and buyers at an agreed price and date for delivery.

But some of the costs along this chain are â in the view of grain farmers in this case â unfairly imposed or needless.

This dispute is also bubbling against the backdrop of surging fuel and fertiliser prices in the wake of the Iran War and as a strengthening El Niño threatens to unleash drought during the summer grain-growing season.

The farmers on Thursday were not toyi-toying or hurling bricks at the JSE or burning tyres in the street, but they are pissed off.

And itâs probably a smart strategy to evoke the consumer and food security. The placards waved on Thursday proclaimed: âFood Security, Fair Marketsâ and âHidden Costs Hurtâ.

Itâs all food for thought and worthy of public debate and scrutiny. BM