Breaking the trust between Producer and Market agent

The other day, a market agent told me about a supposedly ‘loyal’ producer who had decided to bypass him and supply directly to an unnamed buyer in the same town, who had offered him a ‘better deal’.

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This begs the question, what sort of ‘better deal?’ The producer never divulged that part, so we don’t know. But I was reminded of a similar story another market agent told me a few years ago. When the market agent asked him why he no longer supplied the market, the excited producer said a ‘big buyer’ in Johannesburg was taking a full load of apples every week and it was going well.

However, about two months later, the market agent received a call from the producer wanting to know the current price of apples on that market. “Why do you want to know?” asked the agent, as the producer had elected not to supply the market any more.

The sheepish voice on the other end admitted the last payment – more than R150 000 in those days – hadn’t gone through and he felt he should return to supplying the market. My own reaction was a rather heartless, “He deserved it!” In both cases the producer didn’t care about his relationship with the market agent. When expediency presented itself in the guise of a ‘better deal’ they were quick to ditch their respective market agents. This also showed a lack of understanding of what fresh produce marketing entails.

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For one thing, they didn’t appreciate the fact that, as I’ve pointed out time and time again, there’s a law in place to protect the financial interests of a producer when they make use of the services of a market agent. In the second anecdote, for example, had it been the market agent who couldn’t pay, the producer would not have lost out. Apart from normal commercial law, what kind of recourse do producers have when dealing with ‘big buyers’?

Serious damage
The financial losses incurred by the producer are bad enough, but what really does serious damage is the breaking of the trust relationship between farmer and market agent. When this happens, repairs at a later stage are tenuous and time-consuming – as is the case when we break the trust in any relationship, be it marriage, friendship or business.

Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.