Johannesburg Fresh Produce Market CEO Kgosientso Ramokgopa runs the largest fresh-produce market in Africa, in the province that contributes 47% to the national GDP. He told Cornelia du Plooy about the market’s links to other African countries and its support for informal traders and small rural farmers.
What is the role of the Johannesburg Fresh Produce Market (JFPM) in the African market? The aim of the African chapter at the recent World Economic Forum was to better understand the economic landscape of the continent and to investigate how to ensure economic growth and fight poverty, joblessness and disease. One session focused on the “green revolution”, that believes the best way to fight poverty is to ensure people can grow their own crops. Another view is that we should move our emphasis from subsistence farmers to those who can produce a surplus.
That surplus must reach the market, so the suppliers can enjoy an income that allows them to participate more in the economy. In the past two months we have received five African trade missions (from Kenya, Tanzania, Ghana, the Central African Republic and the Democratic Republic of the Congo) interested in how we do business. We agreed to assist them with technology and to give them the benefit of our experience. Kenya needs produce, which presents export opportunities. L arge sections of the market have long been underutilised. What is happening now? We have completely revamped Hall 5 and 6 (fruit) and Hall 7 and 8 (potatoes) to better accommodate informal trade, but sections of both are earmarked for entrepreneurs. During the past financial year informal traders registered 65% of our R2,39 billion turnover.
That sounds impressive, but the problem is the informal traders do not view themselves as a unit and so they do not realise their own buying power. In fact, they own the market. One of the things we are doing together with our Skills Education Training Authorities (SETA) is to help the underground market. We have given the informal traders the space they asked for. Where they used to trade under the auspices of the Mandela People’s Market, they will soon have access to the market’s trade floors, namely the fruit and potato halls. Our trading floors can be a bit intimidating, so the less sophisticated consumer prefers to buy from informal traders. At present the Mandela People’s Market allows a group of traders to deposit their money into one buying card, which their representative uses to buy their goods for the day in bulk. Individual traders can then offer customers smaller quantities in a more informal environment. We want to encourage an already flourishing entrepreneurial spirit by mainstreaming the informal trade at JFPM. Of the 11 market agents at JFPM, four are black. Three of these black agents have agreed to consolidate with one of the market’s bigger agents, RSA. This consolidation also means a 20% share for female black entrepreneurs, who will be responsible for the newly allocated space.
Tenders for this have already gone out. A breakaway group of market agents plans to set up their own market near Nasrec. What is your opinion of this? I do not know the market agents who are alleged to be part of the “breakaway” to Nasrec. Whether or not this group will constitute direct competition to the JFPM is hard to say. I can only comment once I am familiar with the business model. T here have been rumours of possible financial mismanagement of funds under former management. What is the true state of affairs? The auditor general’s report for the financial year 2005/06 found the JFPM was not fully compliant with the new accounting standards required by the national treasury; there was no finding on financial mismanagement. JFPM is working on this compliance and other related matters. I welcome any evidence of financial mismanagement at JFPM by anyone, including the period prior to my arrival (the end of 2006). Once I receive such evidence I will act decisively. What challenges does the JFPM face? Post-deregulation, farmers are no longer required to supply the JFPM.
Big retailers go to the farmgate and use their market dominance to get the best prices, which are lower than those on the open market. So we have to develop a strategy that overcomes this and makes the market attractive to the whole consumer spectrum. The biofuel industry also presents challenges. Farmers are businesspeople and if they can make more money per hectare going the biofuel route, there is no sense in us campaigning for them to grow fresh produce. We must make it more profitable for farmers to supply us than to grow biofuel crops. Our major stumbling block is that most farmers don’t have access to the market, but as the end-produce destination we are ideally located in Gauteng, which contributes 47% to the national GDP. We are planning to provide transport at central pick-up points in the rural areas to help these farmers get their produce to market. |fw