In South Africa, the Marketing of Agricultural Products Act (Act 47 of1996) provides for the application of a statutory levy. This gives substance to a levy/royalty within a legal framework and has the following benefits:
- It is a self-regulating system
- All grain of a specific crop is levied at the first point of sale
- All growers pay the same levy
- Farmers and breeders share the risk
- The royalty income is directly linked to the variety’s level of performance
- Should farmer income be low due to drought etc., levies are also lower.
The Marketing of Agricultural Products Act (Act 47 of1996) also provides strict guidelines as to what amount a levy can be, what the maximum rate of the administration can be, and for what period a levy can be imposed.