However, Farmer’s Weekly has received reports of delayed payments, as well as failures to pay. And several farmers and agents have voiced their suspicion that the fund, which stood at R37 million in 1992, is running low.The APAC’s own correspondence with the fresh produce agencies seems to add to concerns. In a letter dated 8 September, they informed all agencies the maximum contribution to the fund had been increased to R50 000 – a massive jump from the previous levy of R7 500.
This was following an actuary investigation conducted in May 2010, said the letter. The report, continued the letter, “indicated that urgent steps need to be taken to restore the fidelity fund to a reasonable size, after which it will need to increase to keep pace with inflation.” APAC general manager Lizel Pretorius assured Farmer’s Weekly there “was over R20 million” in the account, but Desmond Wanckel, owner of the Gordon W Hall agency, asked, “if there are millions, then why aren’t my farmers being paid out?”
Wanckel and his staff were suspended from the East London Fresh Produce Market after the APAC found that funds were missing from the agency’s trust account. Wanckel’s clients, who were owed R2,1 million by the agency, were told to refer their complaints to the APAC at the end of March, but to date nothing has been paid out.“The way it works is the farmer grows produce and sends it to a market agent in good faith.
The market agent sells it and takes 7,5% commission. The municipality, who owns the market floorspace, takes 5% in market dues, so the farmer ends up paying 12,5%,” explained Wanckel. The remaining money then gets put into the trust account each agent has to have. The agent takes his commission from the account and the rest gets paid to the farmer. Unfortunately, some of my staff tried to get clever with the trust fund, which is why we’re under investigation,” said Wanckel, adding that agents paid levies to protect farmers from exactly this kind of situation.
Guybon Osler of Lone Tree Farms near Fouriesburg is owed R249 000. He referred the matter to the APAC at the end of March, but has yet to see any money. “The APAC have intimated that they’ve verified our losses, but what’s irritating is that it’s been six months now and we still haven’t been paid out,” he said. “We’ve supported the municipal markets for 30 years precisely because we’ve always been told this sort of thing was covered.”Willie van Zyl, who farms onions and deciduous fruit near Rietfontein, has a similar problem dating back to 2008.
He used a market agency in Pietermaritzburg called Hoffstad, where employees stole from the trust account.“Hoffstad owed us R1,2 million. I got R600 000 back from them myself and then handed the case to the APAC, which is refusing to pay anything back to us, even though all the sales were verified by our chartered accountant as well as by APAC’s own auditors,” he said. “The matter is now heading for a fight, but we don’t understand why there has to be a fight. The fund is there to protect the farmer’s money.”
Pretorius said the APAC has been more proactive in checking up on agency trust accounts over the past two years. This, combined with the effects of the difficult economic climate, has resulted in them paying out more money in that period. “That’s why we’ve had to revisit the cap on the levies,” she explained."What farmers perhaps don’t understand is that we first have to follow time-consuming legal processes before we can pay out.
The time it takes to resolve each complaint varies. I closed an agency in February 2009. It took 15 months to finalise the disciplinary procedures, so the farmer was only paid out in July 2010,” she noted.Van Zyl, meanwhile, is speaking to an attorney about taking the APAC to court. “In the past farmers have just written off these losses, but this is something we need to get to the bottom of now. APAC is sitting on money that isn’t theirs – it’s there to protect the farmers.”
