South Africa’s fresh produce markets, vital to both commercial and small-scale farmers, are facing increasing scrutiny as stakeholders raise concerns about fairness, concentration, and barriers to transformation.
At the recent Transformation Lekgotla, the Competition Commission, government departments, market agents, and industry bodies unpacked challenges ranging from price volatility and municipal inefficiencies to limited opportunities for new-era farmers and black-owned businesses.
Sello Makhubela, acting CEO of the Joburg Market, explained that the enquiry into the fresh produce sector stemmed from concerns about market distortions.
“There are very high levels of concentration in all the major markets in the country. Durban, Cape Town and Johannesburg. About 80%, 90% for the major produce, accounted for by these agents, we then were concerned about this,” he said.
He also noted that capital and other industry players are already being challenged through the courts, with recommendations such as divestitures on the table.
“Engagements are underway on issues related to commission and matters of participation, with the emphasis that achieving true competitiveness depends on ensuring the market itself functions effectively,” he said.
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Dealing with violations & dishonest agents
Brian Zondo, policy analyst for competition policy at the department of trade, industry and competition (DTIC), emphasised that the government has a key role in transformation.
“One of the remedial actions is to look at how the ownership structure of the fresh produce market is actually taking place. The recommendation is that there needs to be some form of independence for these fresh produce institutions from the municipalities. The proceeds, the revenue, that is created from these institutions, actually is driven to try and fund municipal inefficiencies,” Zondo said.
Francois Knowles, registrar of the Agricultural Produce Agents Council (APAC), assured farmers that regulation is tightening. Knowles explained that the system currently involves about 3 000 agents, with strict enforcement of rules and regulations.
He also acknowledged ongoing concerns about unfair pricing practices, emphasising that while irregularities do occur, measures are in place to address them. Dishonest agents face hefty fines and, in severe cases, even imprisonment, underscoring the seriousness with which such violations are treated.
“We know that there’s hanky-panky happening at some stages, and we are the ones to make sure that we point that out and that we take those individuals to task. We issue hefty fines. We even put agents who are dishonest in jail. It’s that serious,” he said.
Barriers for new entrants
Hendrik Eksteen, CEO of Grow Fresh Produce Agents, acknowledged the barriers facing new entrants. “It is extremely difficult to become a market agent because the essence of our business has to do with relationships. The farmer is selling his load of potatoes or cabbage purely on the basis of trust.”
Meanwhile, Dimpho Xaba from the South African Union of Fresh Markets said transformation must prioritise participation. According to him, the primary focus is on expanding participation across the value chain, particularly by integrating historically disadvantaged groups.
“We are creating an inclusive economic space in the market now. We have been spending a lot of time allocating the spaces for SMMEs, and in the pipeline, we are also going to be able to develop an agro-processing hub in the market, where these SMMEs can be provided with a facility which complies with food safety,” Xaba said.
Access to finance remains a challenge, noted Nhlanhla Nyembe, divisional executive for SME and rural and community development at the National Empowerment Fund (NEF).
“I don’t think the problem is that there’s no money, but it’s the market failures that are generally experienced by small businesses even in the agricultural sector.
“Recently, especially with the new minister, the minister has really been proactive, as well as engaging with the National Empowerment Fund to find solutions and to align the organisation with the government priorities to create jobs, to create SMEs, to support women-owned businesses, businesses owned by people with disability and youth,” Nyembe said.
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