Phylloxera and the development of rural financial networks in the Cape Colony

How did white farmers in the Cape respond to the outbreak of phylloxera in 1886? This article uses shareholder records from the archives of the Cape Limited Liability Companies to show how wine farmers used joint-stock companies as cooperative societies to deal with the ravages of the phylloxera outbreak. The study argues that limited government support motivated farmers to find creative ways to cope with the crisis. This is based on an analysis of investor preferences in the Cape capital market between 1893 and 1902. Farmers, unlike other groups who were diverse in their interests, showed a strong inclination to invest in agricultural joint-stock companies. A striking feature about these companies was that they seemed less profit-oriented. Instead, they focused on providing services that resuscitated the wine industry or helped farmers transition to other agricultural sectors like the fruit industry. In the absence of legislation that enabled the formation of cooperative societies, farmers used the Cape Company Act of 1892 to pool financial resources to overcome their capital constraints in their fight against phylloxera. These cooperative societies in the form of joint-stock companies played an important role in the development of South Africa’s agricultural industry.