South Africa’s municipal fresh produce markets connect those who grow our food with those who eat it, says Dr Justy…
South Africa’s commission and formal fresh produce market systems offer models for all to learn from.
But while we’ve advanced in many areas, there remain elements of our fresh produce supply chain that don’t work. This is my take on the situation, starting with the commission system.
Commission-based markets are open to producers who supply more than a million tons of fresh produce to the market every year. All the stock remains their property until sold by market agents, who manage their sale for a commission of 5% to 7,5%.
The markets also receive a commission (usually 5%) for providing and managing the infrastructure that makes the exchange of goods possible.
One of the benefits of this system is that farmers don’t have to set foot on the markets to sell their produce; they pay specialists to manage sales for them. This improves efficiency, strengthens skills and keeps competition strong. But it isn’t enough on its own.
SA’s fresh markets form a single integrated node in a much larger fresh-produce value chain. So they’re often affected by variables that impact the flow of produce, including receiving, selling and dispatching it.
Some of the common issues include:
Fresh produce markets may be affected by supply issues that reduce volumes, such as:
SA’s markets used to form the primary channel for fresh produce distribution, but these dynamics have changed since deregulation 20 years ago.
Today, markets tend to lack the strategic direction needed to respond to the competing forces of other marketing channels – something stakeholders are working aggressively to address.
The ability of local and national councils to set and pursue strategic value chain objectives is limited. Symptoms of this can be found in the lack of infrastructure maintenance and investment, non-enforcement of regulations (food safety, health and safety), lack of engagement with major stakeholders, and so forth.
South Africa and Africa will look quite different in 10 years. Key areas of change will include:
Addressing these issues
In a country rife with inefficiencies, ineffectual leadership and a growing shortage of skills, there’s much room for improvement. To respond effectively to the foregoing challenges, I believe stakeholders must come together to improve four key areas:
It’s clear that a wide range of issues exists with the potential to exert a massive effect on all stakeholders.
For SA’s fresh produce markets to realise their potential, and to share their good lessons with the rest of the world, there’s work to be done.
Dr Justy Range is the Business Development Manager at Freshmark Systems, a subsidiary of MICROmega Holdings Ltd.
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