Vegetable farmers have been dealt a body blow by the anti-foreigner protests, which have driven scores of fresh produce buyers away from Gauteng’s municipal markets, shutting up shop and ostensibly returning to their countries of origin since June.
“The protest action has caused a stark imbalance to the existing market ecosystem,” maintains an agent at a market agency based at the Johannesburg municipal market. “The results stretch much further than simply fewer buyers visiting the market. It touches on the distribution of fresh produce, marketing of different grades, the competition amongst buyers and eventually the financial sustainability of producers and market agents.”
In fact, he says, he is starting to hear from farmers forced to sell their farms purely as a result of the disruption to market sales caused by xenophobic attacks on foreigners of African descent. He has written to his farmers, advising them to prioritise quality, to grade consistently, to improve the presentation of their wares and to communicate with their market representation before dispatch. “More slow-moving stock can mean more carryover and weaker returns.”
© Carolize Jansen | FreshPlaza.com
“Shopkeepers are afraid of keeping stock so they don’t have so much to lose”
Buyers from Mozambique, Zimbabwe, Eswatini, Lesotho, Botswana and other African countries have for years occupied a central position at the fresh produce market, supplying informal street stalls whose influence stretches into the poorest neighbourhoods of Gauteng and beyond, taking vast amounts of vegetables and fruit across the country’s borders.
“In our experience foreign traders made up a particularly large proportion of the active buyer pool on our trading floor,” says a market agent who cites the sensitive political environment at the municipal market when requesting to share his experiences anonymously.
He remarks that the economic contribution of foreign buyers to the South African economy is woefully underestimated. Their distribution networks support food security and create further opportunities downstream. “In fact, foreign buyers occupy an essential role in the distribution of fresh produce, especially of second- and third-class products, smaller sizes and products not necessarily conforming to the requirements of formal trading channels.”
Foreign traders who still visit the market are doing so with great caution, he says. “For fear of further protest action and of a disruption of their businesses, they are procuring distinctly lower volumes, and they’re being very selective about it. The risk of sitting with large amounts of unsold perishable stock is just too large. So we’re not only experiencing a big drop in the number of buyers, but also a significant decrease in the sales volumes amongst the buyers who are left.”
At the Pretoria municipal market, the result is the same. Says an agent of the remaining buyers visiting the market: “The guys are afraid of keeping stock. They’re not buying so much anymore, so they don’t have so much to lose.”
© Carolize Jansen | FreshPlaza.com
Changed buyer profile emphasises quality, packaging, targeted marketing
With the reduction in foreign buyers, we’re not only left with a significantly smaller group of buyers, but it’s also led to a change in the requirements of the remaining buyers. Increasingly, there’s a preference for better quality, homogeneous products, professional packaging, and longer shelf life.”
The resulting loss in purchasing power has influenced the dynamics of demand, supply, and price formation at the market. “Where the strong competition between buyers before created an opportunity to negotiate stronger prices on behalf of producers, that intensity of demand is now often entirely absent. And it’s not only limited to the demand for second- and third-grade product, but it filters through to first-class product when stock movement slows down, and pressure on prices increases.”
The agent observes that the confluence of these factors has rendered it exceptionally challenging to market lower grade and smaller sizes, and the effect lands disproportionately on inexperienced and less-resourced farmers.
The municipal fresh produce market remains a crucial link in the chain between farmers and consumers, but the industry will have to adjust to a changed buyer profile with greater emphasis on product quality, packaging, shelf life, as well as targeted marketing, the agent suggests.
Carolize Jansen
www.freshplaza.com
