‘No justification for vegetable pricing structure in South Africa’

Some South African fresh produce farmers are opting to plough their produce back into the ground rather than sending it to national fresh produce markets due to the low prices encountered there, says vegetable grower Eric Mauwane of Oneo Farms near Tarlton in Gauteng. Mauwane produces sweet peppers, jalapeño peppers, broccoli, cauliflower, red cabbage, green beans, and baby marrows.

Due to the lockdown restrictions to contain the COVID-19 pandemic, the supply chain was losing its “buying power”, and this was affecting farmers across the country because it now cost more to package and send produce to the markets than it did to grow the produce, Mauwane explained.

“I have spoken to a lot of farmers and we have been receiving lower prices for fresh produce from the markets. The retailers are buying our produce at lower prices, but still sell at normal prices. This is not fair to us as producers; some commercial farmers are going to [lodge a complaint with] the Competition Commission.”

“We are unable to pay our labourers [and] cannot afford them for the next planting cycle. Even the assistance from government’s COVID-19 Agricultural Disaster Fund is not enough; R50 000 is [only] enough for 1ha,” he said.

Dr Sifiso Ntombela, chief economist at the National Agricultural Marketing Council, said the low price some farmers were receiving for certain produce was a function of price transmission and reduced aggregate demand at fresh produce markets.

“The higher prices at supermarkets do not necessarily translate to higher prices for the fresh produce market, and [as a result], for farmers. Higher supply and low demand are suppressing the prices. Retailers have centralised distribution systems, and they are able to control supply, which keeps their prices relatively high,” he explained.

Source: farmersweekly.co.za


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