The purpose of this opinion piece is to educate the public on transformation issues in the fresh produce market system and the approach needed going forward. This year (2022) marks 16 years since the last publication of the Section 7 Committee Report in 2006 by the National Agricultural Marketing Council (NAMC), investigating the affairs of fresh produce market system with special attention to National Fresh Produce Markets (NFPMs). This report deals with five thematic areas: ownership and management, legal framework, commission system, infrastructure and market access and transformation. Each thematic area has its own set of recommendations explained in the report. For instance, under ownership and management the report recommends that “a coordinating mechanism or body should be created to coordinate certain matters related to NFPMs…. This body could be introduced in terms of statutory provisions (such as the Marketing of Agricultural Products Act 1996) and it is proposed that it should be responsible for implementation of the Section 7 Committee recommendations”.
Fresh Produce Market Development Agency and Project Rebirth
In 2008, a Ministerial Interim Committee (MIC) on the restructuring of fresh produce markets in South Africa was established with a primary task to advise the then Minister of Agriculture, Forestry and Fisheries (AFF) on clarifying the programme for implementation of the 2006 NAMC’s Section 7 Committee Report recommendations. The MIC supported the recommendation for the establishment of a coordinating mechanism or body. In fact, the MIC is more explicit in its recommendation stating that the Minister should establish a Fresh Produce Market Development Agency (FPMDA) for the purpose of transforming, coordinating, regulating, marketing, enhancing access and improving the functioning of NFPMs.
Despite this clear recommendation, sometime lapsed with no action and this prompted the fresh produce market agents through the Institute of Market Agents of South Africa (IMASA) and producers through Potatoes South Africa (PSA) to approach the Department of Agriculture, Land Reform and Rural Development (DALRRD) in 2013 for immediate intervention and partnership to address the persistent challenges faced by the NFPMs. This led to the evolution of a new initiative called “Project Rebirth” – which to date has remained without any legal authority and mandate in transforming, coordinating, regulating, marketing, enhancing access and improving the functioning of NFPMs on a national scale.
Agricultural Produce Marketing Agencies Bill 2013 and its withdrawal
The magnitude of the difficulties confronting NFPMs also prompted the Ministry (ALRRD) to draft the Agricultural Produce Marketing Agencies Bill 2013 authorizing the establishment of a National Fresh Produce Market Council (NFPMC). The main objective of the Bill was to provide for the regulation of NFPMs through the creation of a centrally located and legally mandated entity (NFPMC) that would coordinate efforts to develop, manage and transform NFPMs. This Bill would have provided the most complete and appropriate solution to the challenges confronting NFPMs. For example, the Bill would have addressed issues raised in previous investigations such as:
- The Auditor General (AG) in 1995 – in response to complaints lodged by the National Fresh Produce Forum and a number of farmers about the operation of the Johannesburg fresh produce market;
- Ernst and Young (1996) on behalf of the then-known Office for Serious Economic Offences; and
- NAMC Section 7 Committee reports (1998, 2000 and 2006).
Indeed, the Bill would have addressed some of the long-standing issues concerning the fresh produce market system which are currently being addressed in a disjointed manner at various platforms such as Project rebirth and the Council for Black Market Agents (CBMA). However, after consultation with different stakeholders which included amongst others the Agricultural Economics Working Group (AEWG), Project Rebirth Steering Committee and Office of the Chief State Law Adviser (OCSLA), the bill was withdrawn on the grounds of sections 44, 151 and 156 and schedule 5: Part B of the Constitution of the Republic of South Africa (Act No. 108 of 1996) that NFPMs are classified as a local government competence rather than a national government competence and thus, the Minister of ALRRD lacks the legislative authority to enact legislation regulating them in the form of the NFPMC. The draft Agricultural Produce Marketing Agencies Bill 2013 was therefore declared to be unconstitutional. It is therefore not surprising that we have a slow pace and almost an impasse on operational and transformational changes in the fresh produce market system despite enormous macro-economic reforms and several fresh produce marketing investigations that have taken place in South Africa since 1994.
Perhaps the question that arises is: do we, as a country after more than 12 years still need to establish the NFPMC) or FPMDA? Is this type of structure not long overdue?
I believe that it is long overdue based on four justifications. Firstly, no meaningful transformational changes can happen in the fresh produce market system without any legal grounding to support such a mandate. Hence, the need for a centrally located and legally mandated entity. If the Minister of ALRRD is unable to establish this structure, as advised by the Office of the Chief State Law Advisor, the matter must be forwarded to the Minister of Cooperative Governance and Traditional Affairs (COGTA) – the most appropriate department as far as the realm of fresh produce markets is concerned. Put in simple terms, there is no reason to leave this issue unresolved for an extended period of time. Secondly, most local governments in which NFPMs are owned have witnessed a rise in unstable government coalitions let alone the fact that they turn to prioritize housing, water, roads, refuse removal and with very little emphasis on NFPMs. Thus, a separate legal entity with a sole mandate of transforming, coordinating, regulating, marketing, enhancing access and improving the functioning of NFPMs on a national scale is non-negotiable. However, such a structure must report to the DCOGTA at national level. Thirdly, at some point the Competition Commission had to refer to the Competition Tribunal for prosecution a matter about fourteen fresh produce market agents and their association in relation to charges of price fixing and/or fixing trading conditions in contravention of the Competition Act. Perhaps this is a key signal that no one holds them accountable within the industry. This seems to suggest that establishment of NFPMC or FPMDA would be the most appropriate action to deal with these issues. Fourthly, and perhaps most importantly the pressing and challenging issues pertaining to NFPMs are dealt with in an uncoordinated and fragmented manner by different entities through different initiatives.
However, I am also cognisant of the fact that this could be met with some form of resistance because it would mean loss of revenue by municipalities owning fresh produce markets and on the other hand, market agents and some role-players in fresh produce industry might view this with a potential to destabilise so called “well-functioning of markets”. But the country needs to move forward and swallow this bitter cup as a short-term pain for a long-term gain.
Disclaimer: The views and opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of the National Agricultural Marketing Council (NAMC), Mzansi Agriculture Talk or its members.
