The National Agricultural Marketing Council (NAMC) has warned that smallholder farmers were struggling to make their mark in a market largely dominated by the major cities of Johannesburg, Cape Town, Tshwane, and Durban.
The NAMC recently released its Smallholder Access Estimates (SMEAs) for the second quarter of this year, revealing fluctuations in revenue and volume for fruits and vegetables from June to August 2024 that underscore both the challenges and opportunities faced by these farmers.
The data shows a notable increase in total revenue, rising from R526.5 million in June to R650.6m in August, indicating heightened market activity.
However, more than 84% of this revenue is concentrated in four key markets, highlighting the need for greater access for smallholder farmers who often lack the necessary resources to thrive in such concentrated environments.
The SMEAs disclosed that the average revenue for vegetables reached R336m, with the standout performers being potatoes, onions, and tomatoes, which collectively accounted for nearly 80% of total revenue.
In terms of volume, the figures averaged 579 000 tons, with potatoes leading the way at a substantial 44.13%. Although these statistics may seem promising, the reality for smallholder farmers was much more complicated.
According to the NAMC report, these four markets represented 84.42% of total SMAEs, raising concerns for farmers who grow less common vegetables.
In the fruit market from June to August, the average revenue was R173m, with bananas and apples holding 28.18% and 17.71% of the SMAE, respectively. The top five fruits, namely bananas, apples, grapes, oranges, and avocados., accounted for 63.94% of market share.
The Johannesburg market was leading the market share for fruit at 44.78%.
In terms of volume, bananas and apples contributed 34.25% and 18.44%, respectively, totalling 192 000 tons. The trends indicate significant concentration, underscoring the need for strategies to improve access and diversify offerings for smallholder farmers.
The recently released Competition Commission’s Fresh Produce Market Inquiry Provisional Report suggested that small, medium and micro enterprises account for less than 1% of proceeds in the National Fresh Produce Markets (NFPMs).
A case conducted among 16 farmers showed equal gender representation and an average age of 53. Market access indicators showed varied perceptions, with those experiencing closer proximity to markets reporting higher satisfaction levels.
However, challenges, such as transportation difficulties, lack of storage facilities, and unfavourable market prices, hindered their performance. Farmers strongly needed support in areas such as advanced farming equipment, reliable transport, and improved storage solutions to enhance their market access and competitiveness.
The market access indicators reflected varied farmers' perceptions regarding the new market to which they have been linked. Farmers who experienced increased distance to the market faced challenges with accessibility and reported mixed levels of satisfaction.
For some, the increased distance created significant obstacles, leading to frustration and difficulty reaching the market regularly. However, despite these challenges, satisfaction levels ranged from neutral to very satisfied, especially among farmers who saw improved sales, prices, and overall income.
Farmers were said to encounter a range of challenges when engaging with a new market. The most frequently cited issue, reported by ten farmers, was the difficulty transporting their produce.
This transportation problem directly impacted the timeliness and quality of their goods, leading to delays and often compromising the condition of the produce by the time it reached the market. The delays and compromised condition of the produce significantly affected the farmers’ overall market performance. Without reliable transport, they struggled to maintain consistency and competitiveness.
Another common challenge was the market's lack of proper storage facilities, as noted by six farmers. The absence of these facilities meant that farmers had little control over preserving the freshness and quality of their produce, especially for items that require temperature control.
Additionally, unfavourable market prices were reported with equal frequency, further constraining farmers profitability. The inability to store produce properly and low market prices often resulted in reduced income, limiting their ability to invest in future production cycles.
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