The market agent is entrusted with the producer’s products, and the market itself is effectively an extension of the farm gate. Ownership of the products remains with the producer until paid for by the buyer. All sales are conducted on the commission system which ensures that an open and realistic price based on supply and demand is achieved. The market agent is remunerated with an ad valorum commission based on the gross value of the sale. This ensures their commitment to achieving the best price possible on the day.
The fiduciary responsibility is of such importance that a law exists to protect the farmer’s money in the event of any illegal activity by the market agent – Act 12 of 1992 (updated in 2003). The Agricultural Produce Agents Council (APAC) administers the act and provides a means of recourse for the farmer. Act 12 is unique in the world and gives SA farmers an edge which is the envy of their overseas colleagues.
Despite the weight of the act on the market agent’s shoulders, the responsibility to make it work lies with both parties. Imagine sending a consignment of fresh produce worth thousands of rands to somebody at a distant market and then simply ‘leaving it up to the agent’. The thought boggles the mind – yet there are farmers who still conduct their business in such an amateurish way.
Professional farmers and their agents always ensure there’s constant communication between themselves, from before the consignment leaves the farm until after final payment has been received. That’s how good business is conducted. When problems arise – as they inevitably do – they can be resolved. The danger of emotional attacks and bitter disputes, which never resolve issues properly, can be eliminated. In short, SA farmers have an unique, workable and highly valuable system on their hands which, if they allow it to fail, will consign them to a business life of ‘slavery’.
Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.