Unlocking sales opportunities in fresh produce markets is more accessible than you might imagine. Successfully selling your crops in these markets requires navigating a series of steps to ensure a profitable and rewarding transaction.
Fresh produce markets offer fair trading opportunities for both large-scale, commercial producers and smallholder farmers who cultivate smaller quantities of produce. According to Craig Pillay, food safety and quality manager at Joburg Fresh Produce Market, gaining access to these markets costs next to nothing.
Did you know that in South Africa there are more than 15 fresh produce markets throughout the country?
The four largest markets of fresh produce in South Africa are Durban, Johannesburg, Cape Town and Pretoria. The four medium markets include Bloemfontein, East London, Pietermaritzburg and Port Elizabeth, and the six smaller markets are Kimberley, Klerksdorp, Springs, Kariega, Vereeniging and Welkom.
Johannesburg’s market is the biggest national fresh produce market with 45% of the market share of all the national fresh produce markets.
Benefits of supplying fresh produce markets
Selling at fresh produce markets is not only a means of generating income but also an opportunity for farmers to connect with their communities, receive direct feedback, and participate in a transparent and fair market environment.
Pillay points out that national fresh produce markets play a fascinating role as platforms where the prices of fresh produce are determined through negotiations between a willing buyer and the farmer who is the seller.
“A market is a place where supply and demand meet, a value for a product is established so that a sale can be made. Markets play a role in ensuring food security, which is food availability, accessibility, and affordability as prices are negotiated,” Pillay says.
Read this article for more reasons on why to sell into fresh produce markets.
Tips for access
Accessing fresh produce markets doesn’t have to be the most challenging task for farmers.
Firstly, you need to register as a producer or supplier on the sales processing system. Once that is done, you will be issued either a producer ID or supplier ID. “This buying card is used by the buyer to transact the sale at any of the 14 market agents at Joburg market,” Pillay explains.
For farmers, after the registration process, they can deliver their product to a selected market agent within 24 hours. A consignment note with all the product details product, type, quantity, weights as well as producer ID needs to be completed.
“All the sales are recorded in a computerised sales system. After the close of business for the day, the agent confirms the price and quantity sold for the day,” Pillay shares.
How you make your money
After sales are made, the market deducts a 5% commission and pays the remaining amount to the market agent. The market agent then deducts their commission, typically between 5% to 7.5%, before providing the final sales balance to the farmer.
“So in summary, a farmer will pay a total of 12.5%. For every R100 of sale, a farmer pays R12.50, of which R5 will go to the market. R7.50 goes to the farmer, as an example.
“And then if the product is not sold, all unsold produce goes back to cold storage or remains on the sales floor for the next day’s sales,” Pillay explains.
Market agents aim to sell all of the farmer’s produce, but as items age and their shelf life decreases, a salesman may lower the price. The shelf life of fresh produce varies depending on the specific commodity.
“A discarding or destruction process is followed with stock count. Photos are taken showing the state of the produce that has to be discarded. We also issue quality reports upon request, which is the summary of the sales process and what happens to the product.
“At Joburg Market, wastage or discarded produced is less than 1%,” Pillay says.
Food quality is important
Selling on a fresh produce market requires an understanding of the basic economics of supply and demand. Additional factors influencing the price of fresh produce include the level of adherence to grading and packing requirements outlined in the Agricultural Product Standards Act.
“Your appearance, quality, blemishes, wind marks, insect damage, fruit maturity, ripeness, sugar levels, colour, and also sizing impact your products. Grading standards are the main requirements,” Pillay says.
Food safety is paramount when selling fresh produce. Products must meet standards for human consumption, ensuring they are free from pesticide residues, microbiological contaminants, and other pollutants that may be introduced during production.
Adhering to these safety requirements helps maintain the quality and integrity of the produce for consumers, Pillay adds.
ALSO READ: Why fresh produce markets are being probed
Packaging requirements
Packaging requirements for fresh produce are crucial, and they involve using suitable containers such as boxes, bags, pockets, plastics, or crates.
Additionally:
- Products must have minimum labelling information for traceability.
- Labelling should include the name and address, along with other details that help buyers make informed decisions.
- Information such as class, variety, and count should be indicated.
- The weight of the product should be specified on the packaging.
- Packaging should consider transport requirements, ensuring the product is protected against elements like wind, dust, and rain during transportation to the market.
- Clear information about the offloading process should be provided.
Adhering to these packaging requirements not only ensures the safety and quality of the produce but also facilitates transparency and traceability in the supply chain.
Identifying market agents
Producers have the flexibility to approach any agent to sell their products in the market. There’s no specific selection process, making it advisable to engage in conversations with various agents to determine the best fit for your needs.
In markets like Joburg, Pillay says smaller agents may specialise in specific products, such as vegetables or certain fruits, while larger agents handle a broader variety.
“It is key that you identify a market agent, who has knowledge and experience in the product that that you want to bring to the market,” he explains.
What agents need from the producer:
- Provide them with your contact details;
- all your business details;
- identity number; and
- banking details.
Fresh produce markets play a pivotal role in establishing varying prices based on product offerings, supporting farmers in terms of market access. These markets serve as champions for the large-scale and affordable distribution of fresh produce daily.
“The national fresh produce market is a huge supporter of the informal sector entrepreneurs who buy produce from the market and they sell on the streets or at the taxi and bus ranks and outside areas where the community congregates hospitals and schools national,” he says.
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