Judge Andrew Reddy of South Africa’s North West High Court on Tuesday handed down judgment wholly in favour of the application of the Institute of Market Agents of South Africa (IMASA) to be put in charge of the funds generated by the Klerksdorp municipal market.
Since 2018, IMASA contends, the Matlosana Municipality has sporadically refrained from releasing the proceeds of sales on the Klerksdorp market to the agents who represent farmers and are legally obliged to pay them within five days. At one point, says Gjalt Hooghiemstra, president of IMASA, who has driven their campaign along with vice-president Theresa Fredericks, the Matlosana municipality owed market agents R7 million (€363,000).
This puts market agents at odds with the law and opens them to disbarment by the Agricultural Produce Agents’ Council, without which they may not operate as a market agent. It has eroded confidence among farmers in the Klerksdorp market, the only fresh produce market in the entire province.
© Subtropico Monies generated by the Klerksdorp market will now be disbursed by IMASA, not the Matlosana Municipality (source: Facebook | Subtropico)
Markets key to municipalities’ income
The Klerksdorp market is the eighth biggest in the country with a turnover of R44 million (€2.28 million) during March this year. An annual turnover of between R450 million (€23.3 million) and R500 million (€26 million) provides the Matlosana municipality with approximately R25 million (€1.3 million) in commission fees, excluding coldroom fees and tax.
The crux of the matter is that a municipal market’s bank account is a closed account whose proceeds are held on behalf of its rightful owners, the farms that had sent the produce to market. The municipality receives cash monies that buyers have already paid to purchase the farmers’ produce. Ownership of the fruit and vegetables never transfers to the market agents representing them, nor should it find its way to the municipality, except for the 5% commission for utilities and buildings, as well as the service of collecting money from buyers and transferring it to agents.
Moreover, the income from municipal fresh produce markets is substantially higher than what councils would be generating from merely renting out facilities.
“A restoration of the legal order”
A 2021 court order sought by IMASA to comply with the law and a money judgment for almost R1.2 million (€62,200) owed then were ignored. “The Municipality continued to treat its obligations with indifference,” notes Judge Reddy, failing to provide bank statements or then providing “laborious and nonsensical” documents.
In August last year, agents were again not paid for four consecutive days. An urgent interdict was unsuccessfully sought. The municipality would blame ABSA bank for delays in the transfer of funds (despite its smooth flow at markets elsewhere in the country) and contested the urgency of the matter.
Over the years, IMASA had addressed various ministers (who are respondents in the case) about the Matlosana municipality’s neglect of care towards its market. The market agents’ organisation had requested a meeting with the municipality in the presence of the South African Local Government Association (SALGA), but no response was forthcoming, forcing IMASA to institute legal proceedings in November.
In the latest judgment, Justice Reddy calls the Matlosana municipality “a recalcitrant organ of state that has already demonstrated a disposition to ignore court orders”.
The Matlosana municipality no longer holds the strings of the Klerksdorp municipal market purse: as requested, IMASA is now appointed signatory to the funds because, the judge sets out, “no lesser remedy has proven effective over four years of non-compliance”. Justice Reddy added that the court could not stand by and let the harm continue. “The relief [transferring signatory rights to IMASA] is not a substitution for the Municipality’s authority,” the judge answered to the objection put by the defendant, “it is a restoration of the legal order.”
© Subtropico
“IMASA’s interventions protect credibility of market system”
The ministers of agriculture, public works and infrastructure, trade and industry, cooperative governance and local government are among those included as respondents, along with the municipality and the North West provincial government, to force a solution to a problem plaguing this market for years.
IMASA’s president, Hooghiemstra, is COO at Subtropico market agency, while IMASA vice-president Fredericks is the founder and managing director of DW Fresh market agency. “IMASA is a small team,” he says of the voluntary organisation that represents the country’s market agents. “We kept this entire matter and the amount owed by the municipality quiet because we didn’t want to scare off farmers from sending to municipal markets, but we want them to know: we fought this to protect your money.”
IMASA scored another legal victory recently, suing the Tshwane municipality for damages caused by prolonged power failure. “The markets are extremely important, and they will become even more so in the future: the more expensive life becomes, the more important they will be. Farmers will have to send to their closest markets.”
Municipal failures can severely disrupt food security as well as farmer sustainability, he observes, creating an environment in which he maintains that IMASA’s interventions have become increasingly important to preserve the stability and credibility of South Africa’s fresh produce market system.
For more information:
Gjalt Hooghiemstra
IMASA
Tel: +27 83 600 9613
Email: [email protected]
Carolize Jansen
www.freshplaza.com
