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Challenges for fresh produce growers and retailers in southern Africa

Choppies, a Botswanan multinational grocery and general merchandise retailer, operating mainly in Botswana, Zimbabwe, Zambia and Kenya, and with plans to start soon in Tanzania, was represented at the latest edition of PMA Fresh Connections, Southern Africa, by its CEO, Mr Ram Ottapathu, who gave a presentation addressing “The challenges of fresh produce in Africa” as a whole.

The biggest challenge he identified is the fact that in most of the countries where they operate, the local production is very minimal."Botswana, for example, is a 11-12 billion pula (1 pula = approx. 0.08 Euro) market, as far as the retail is concerned, and the biggest producer of fresh produce has a total turnover of only 20 million -so you can see how fragmented the farming community is.” There are thus plenty of imports all of which are subject to numerous barriers, quotas and restrictions.

In Botswana, Choppies has a 6,000 square metre refrigerated facility for packing and distribution, which is the largest in the country, but growers face the challenge of having to get the produce to the nearest point, where it can consolidate, so distances can create great difficulties. “There is no cluster farming and you don’t see cooperatives. There is also no contract farming; the only ones there are have been innovated by us, as we started offering sustainable contracts to the farmers. But this aim to consolidate comes at a cost for the retailer, as there are no other programmes for growers on which to rely."

Mr Ottapathu explained that if this move makes it possible to achieve a better consolidation, institutions like PMA can then help them to look at export opportunities.

“These are also countries with high unemployment, and the opportunities to excel in farming can alleviate a lot of problems on the ground, such as social issues. The biggest challenge, has to do with market intelligence. In fresh produce, we need to look at the weekly production and distribution; at how much you can sell to the retailer community per week of each product,” explains Mr Ottapathu. “Botswana can produce about 30% of the potatoes needed by the country, as well as about 40% of the tomatoes and maybe about 70% of the cabbages; the rest is all imported.”

He assures us that, if there was a forum where information could be shared between different organisations, they could add a lot of value within the country, to the community and the region and the case is the same in Zimbabwe or Zambia.

“We need to have market intelligence, help in funding, retailers and distribution centres to help create a proper cycle; a proper ecosystem for fresh produce.”

To ensure the sustainable development of the region, Mr Ottapathu claims, “We can’t stand as islands; it is important for a balanced development of the regions around us; technology needs to be used for border clearance, like electronic data interchange and other modern communication methods in order to clear the bottlenecks.”

He also claims that there needs to be studies to find out what the market can take and share those statistics with the relevant organisations.

"All in all, it is worth keeping in mind that sustainable contracts can be given to farmers in the region, and we, as retailers, have to look at how we can diversify from one region to another. All retailers operating in the region have to look at the local farming community, as without that, we won’t be able to sustain our growth and development. We need to make sure that the communities around us are developing along with us,” concludes the CEO of Choppies.

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