Fresh produce markets – choose wisely

Last week, I wrote about how a group of visiting UK potato farmers said that we in South Africa needed to preserve our commission markets system.

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With this in mind, I want to turn the spotlight on local farmers. How loyal are they to the system and do they fully appreciate its value?

Our 19 fresh produce markets generate a combined turnover in excess of R10,5 billion annually and handle more than three million tons of fruit and vegetables. In a sector with an annual value of approximately R33 billion, that’s a significant amount. What nobody knows for sure is how much of this goes direct to buyers, most of whom are the major retail groups. I expect it’s probably as big as the markets’ share.

Balance
I’ve always maintained that it’s a farmer’s right to market his fresh produce as he sees fit. The key, I believe, is to have a balanced marketing programme that does not expose a farmer unduly to one channel.There are pros and cons to all marketing options and the wise farmer chooses one that best suits his circumstances. It would be foolish, however, to ignore the commission markets.

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Granted, there are farmers who have unhappy stories about the markets. But there are also those who have had bad experiences supplying directly to buyers. Ultimately, the issue is not about who is unhappy but which option offers the best value for money. A crucial factor to unlocking the value of the commission system is understanding how it works and not expecting unrealistic results. Yet many farmers simply can’t be bothered.

By contrast, a successful professional farmer is in the farming business for the long haul and knows that achieving success on a market requires patience, commitment, consistency and, above all, top quality produce.

Average prices

When these factors are in place, building average prices over a given time is what counts. High prices make one feel good and low prices are a pain, but the prices that count at the end of the day are the average prices received over a given time-span.There is absolutely no doubt that when a farmer understands how the system operates and supplies produce accordingly, he will enjoy good returns.