An outlook of smallholder market access

What ought to be the national picture of smallholder farmer participation in National Fresh Produce Markets (NFPMs) based on the recommendations of NAMC Section 7 committee report published in 2006? 

This brief analysis aims to provide an answer to this question by applying the target stating that “30% of the volume should be traded through black commission market agents, starting from year 2014”. This volume is assumed to be obtained from smallholder farmers in South Africa. While this assumption can be debated by saying not all the total volume traded by black market agents is obtained from smallholder, such a debate should not act as a deterrent from contributing to the body of knowledge and policy insights on smallholder market access.

Data for 17 NFPMs were obtained from South African Union of Food Markets – an official and most reliable source and it covers a period of three month (May-July 2020). Over the period the total volume traded in national fresh produce market was 723 609 metric tons (MT). If the aforesaid target of 30% is applied to this volume, the results show that smallholder farmers must have traded a total volume of 217 082 MT, generating a total turnover of 1.2 billion. This turnover can be broken down into 32% in May, June (30%) and July (38%). 

The top 5 NFPMs contributing to total turnover of smallholder farmers included Johannesburg at R616 million (51%), Tshwane at R240 million (20%), Durban at R125 million (10%), Springs at R39 million (3%) and East London at R34 million (3%). This finding implies that Gauteng province had to largest contribution of 75% followed by Kwa-Zulu Natal (13%) and Eastern Cape (5%). 

Four agricultural products (Potatoes, Onion, Tomatoes and Bananas) commanded 61% of the total volume traded over the period under review.

Potatoes had the largest contribution at R266 million (22%) followed by Onion at R153 million (13%), tomatoes at R130 million (11%), and Bananas at R87 million (7%). The rest (47%) was attributed to other fruits and vegetables. 

Collectively, these findings have serious policy implications for land reform, food security and strategies for transformation both at farm production and NFPM levels. For instance, to supply the national fresh produce markets, big volumes are crucial especially if a farmer is looking at the aforesaid top four commodities which contribute over 50% of the annual turnover in the national fresh produce market system; but in a country where majority of smallholder farmers have an average farm size of less than 10 hectares such supplies or volumes can be constrained due to lack of access to land. 

Finally, it is highly possible that there is a huge dissonance between “what is vs what ought to be” due to several complaints raised by black market agents who work with smallholder farmers in the national fresh produce market system. 

Lindikaya Myeki is an agricultural economist and writes in his own personal capacity

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