Why markets remain important

The late Peter Venter captured the essence of fresh-produce markets when he said, “When a country needs to import most of its fresh produce, then it doesn’t require markets to establish prices, as these will have been done by the importers and wholesalers who bought the fresh produce across the borders.

Conversely, when a country is self-sufficient in fresh produce, then markets are required to establish the prices.”He hit the nail on the head because markets are the only viable and transparent way to establish prices for fruit and vegetables. This can’t be left to the supermarkets or wholesalers buying directly from farmers, because they don’t want to divulge their buying prices, the quantity or quality purchased, the prices they will charge and their profit margins.

I don’t have a problem with this, because it’s their confidential business information. I don’t have a problem with direct buying or wholesaling, except when it’s at the expense of price establishment. My problem centres around farmers and consumers. How do they know they’re being paid, or paying, equitable prices?

This is why I listen in awe to those who profess to have the interests of our farmers, markets and consumers at heart when they propagate wholesale markets over commission markets. Either they don’t get it, or they have another agenda. Unfortunately, some of them hold powerful positions where they can influence others. Many see the commission system on our markets as corrupt – or they see the market agents as corrupt – and point to this as a reason for wholesaling. But who says wholesale can’t also be corrupt?

The commission system isn’t corrupt, however. It’s in fact very sound when used properly. There are those who abuse it and give it a bad name, but what about those who apply it properly to everyone’s benefit? We never hear about those market agents, and they are the majority, by far! Ask any successful farmer or market agent why the commission system works for them. If they get it right, why can’t others?

One must understand the system and put in the effort to make it work. And when used properly, the commission system is the only one that will protect our small-scale farmers. Left to the mercy of skilled buyers from the supermarkets, they stand little chance. I’ve never heard a politician or bureaucrat agree with that. Yet, if they know anything about fresh-produce markets and marketing, they’ll know I’m right. 

E-mail Mike Cordes at [email protected]