National fresh produce markets play a vital role within SA’s food chain, acting as the anchors for price formulation of fresh produce. Suboptimal and poorly maintained facilities therefore represent a significant risk to the wellbeing of all stakeholders, and especially consumers.
There is growing concern over soaring food prices, worsened by worldwide instability. Renewed commitment to getting these markets back up to standard thus represents a huge opportunity for stakeholders to work together to ensure that consumers get the best quality fresh produce at the lowest possible costs.
Largely owned and managed by municipalities, fresh produce markets play a crucial role within value chains, facilitating the exchange of produce between farmers, large-scale buyers such as retailers and distributors, and informal vendors. Likewise, they represent an important source of revenue for municipalities, who charge fees of about 5% on the turnover generated at these facilities.
Demonstrating their cash-generating potential, some 3.4m tons of fresh vegetables and fruit with a turnover of R17bn were sold at these markets in 2019 alone, translating to potential municipal income of nearly R850m.
But with municipal budgets under financial pressure, many have been unable to reinvest in these assets. This, in turn, has gradually resulted in a decline in the quality of infrastructure at the facilities, including the deterioration of access roads to reach the markets, the cooling facilities at their premises, and their basic hygiene and sanitation standards (including the cleanliness of floors).
Security has also become a source of increasing anxiety given the large volumes of cash transactions that take place at these markets, and their general lack of physical security features or barriers.
These obstacles have substantially increased the cost of product waste for farmers, placing pressure on already low margins, while simultaneously increasing the gap in pricing for consumers. In the potato industry, for example, logistical issues cause product losses in the region of 8% to 12% – or about one of every 10 potatoes produced.
The local potato industry generates about R8bn at the primary level and another R25bn at the secondary level and is responsible for growing the country’s most important and widely consumed vegetable. Yet despite potatoes’ prominence in the economy and on consumers’ plates, the many difficulties and pressures faced by farmers have seen producers reduce acreage by some 2,500 to 3,000 hectares for higher margin crops over the past three years alone.
The challenges are considerable, but not insurmountable if all stakeholders share in meaningful conversations and develop creative solutions.
What is needed is a Codesa for farmers, industry bodies, market management, municipal officials, representatives from the department of agriculture, land reform and rural development, and other prominent stakeholders to engage and reach a mutual understanding of each other’s roles, responsibilities and needs.
As the industry association for the SA potato industry and its various stakeholders, Potatoes South Africa is proud to be taking an important first step in this regard by hosting a series of roundtables for all market participants aimed at charting a better way forward.
The closer the various players within the value chain can engage, and the more information that is shared on trends and issues faced by the government, producers and retailers, the better the quality of the outcomes that will ultimately be obtained for the benefit of all.
• Jacobs is CEO of Potatoes SA
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